<PAGE>
                                                                   EXHIBIT 10.25

                                SECOND AMENDMENT
                                       TO
                      AMENDED AND RESTATED CREDIT AGREEMENT

         THIS SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"Second Amendment") is made and entered into as of May 11, 2005, by and among
the financial institutions identified on the signature pages hereof (such
financial institutions, together with their respective successors and assigns,
are referred to hereinafter each individually as a "Lender" and collectively as
the "Lenders"), WELLS FARGO FOOTHILL, INC., a California corporation, as
administrative agent and collateral agent for the Lenders (in such capacities,
together with any successor administrative agent and collateral agent, the
"Agent"), SILVER POINT FINANCE, LLC, as the co-agent, syndication agent,
documentation agent (in such capacities, together with any successor co-agent,
syndication agent, and documentation agent, the "Co-Agent"), arranger and book
runner, SALTON, INC., a Delaware corporation (the "Parent"), each of the
Parent's Subsidiaries identified on the signature pages hereof as Borrowers
(collectively with the Parent, the "Borrowers") and each of the Parent's
Subsidiaries identified on the signature pages hereof as Guarantors
(collectively, the "Guarantors" and, together with the Borrowers, the "Borrower
Parties").


                                   WITNESSETH:

         WHEREAS, the Lenders, the Agent, the Co-Agent, and the Borrower Parties
are parties to that certain Amended and Restated Credit Agreement, dated as of
May 9, 2003 and amended and restated as of June 15, 2004 (as amended as of
August 30, 2004, and as it may be further amended, modified, supplemented or
amended and restated from time to time, the "Credit Agreement"); and

         WHEREAS, the Borrower Parties, the Lenders, the Agent and the Co-Agent
wish to amend the Credit Agreement as herein provided;

         NOW, THEREFORE, in consideration of the agreements and provisions
herein contained, the parties hereto do hereby agree as follows:

SECTION 1. DEFINITIONS. Any capitalized terms used but not otherwise defined
herein shall have the meanings ascribed to such terms in the Credit Agreement.

SECTION 2. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is hereby
amended, effective as of the date this Second Amendment becomes effective in
accordance with Section 6 hereof, as follows:

         2.01 AMENDMENT TO SECTION 3.1 OF THE CREDIT AGREEMENT. Section 3.1 of
the Credit Agreement is hereby amended by inserting the following subsection:

<PAGE>

                  "(c) Mandatory Prepayments. Notwithstanding anything to the
contrary contained herein, upon (i) any issuance of Debt or shares of Stock by
any Foreign Subsidiary (other than Debt permitted to be issued pursuant to
Section 7.13) or (ii) any sale or other disposition of assets by any Foreign
Subsidiary (other than any sale or disposition permitted pursuant to Section
7.9), Borrowers shall prepay the outstanding principal amount of the Loans in an
amount equal to 100% of the Net Cash Proceeds received in connection therewith
up to an aggregate amount equal to $11,000,000 and, to the extent that the
aggregate amount of any such Net Cash Proceeds exceeds $11,000,000, Borrowers
shall prepay the outstanding principal amount of the Loans in an amount equal to
50% of such Net Cash Proceeds received in connection therewith in excess of
$11,000,000; provided, that, (x) concurrently with each such application to the
outstanding Loans, Agent and Co-Agent shall establish and maintain a
corresponding reserve against the Maximum Amount and the Borrowing Base in an
amount equal to the amount of such prepayment (but in no event to exceed an
aggregate amount of $41,000,000), and (y) such reserve against the Maximum
Amount and the Borrowing Base shall be released only at the sole discretion of
the Agent and Co-Agent. Each prepayment pursuant to this Section 3.1(c) shall be
applied first, ratably to the outstanding principal amount of the Revolving
Loans, until paid in full, and second, to the outstanding principal amount of
the Term Loan."

         2.02 AMENDMENT TO SECTION 3.2 OF THE CREDIT AGREEMENT. Section 3.2 of
the Credit Agreement is hereby amended by deleting "Applicable Prepayment
Premium" in the seventh line thereof and inserting "Make-Whole Amount" in lieu
thereof.

         2.03 AMENDMENT TO SECTION 5.2 OF THE CREDIT AGREEMENT. Section 5.2 of
the Credit Agreement is hereby amended by inserting the following subsections at
the end thereof:

                  "(o) Promptly, and in any event no later than May 30th of each
Fiscal Year, a revised business plan for the Borrower Parties for the following
Fiscal Year and for each Fiscal Year during the term of this Agreement.

                  (p) Daily, notice of all claims, offsets, or disputes asserted
in writing by Account Debtors with respect to the Borrower Parties' Accounts to
the extent such claims, offsets, or disputes exceed $100,000.

                  (q) Weekly, Inventory system/perpetual reports specifying the
cost of the Borrower Parties' Inventory, by category, with additional detail
showing additions to and deletions therefrom (delivered electronically in an
acceptable format, if Borrowers have implemented electronic reporting).

                  (r) Monthly, in any event no later than the tenth (10th) day
of each month, (i) a detailed calculation of those Accounts that are not
eligible for the Borrowing Base, if Borrowers have not implemented electronic
reporting, (ii) a detailed calculation of Inventory categories that are not
eligible for the Borrowing Base, if Borrowers have not implemented electronic
reporting, (iii) a detailed report regarding the Borrower Parties' cash and cash
equivalents, and (iv) a monthly Account roll-forward, in a format acceptable to
Agent and Co-Agent in their sole discretion, tied to the beginning and ending
account receivable balances of the Borrower Parties' general ledgers.


                                       2
<PAGE>

                  (s) Monthly, in any event no later than the thirtieth (30th)
day of each month, a reconciliation of Accounts, trade accounts payable, and
Inventory of the Borrower Parties' general ledger accounts to their monthly
financial statements including any book reserves related to each category.

                  (t) Quarterly, a report regarding the Borrower Parties'
accrued, but unpaid, ad valorem taxes.

                  (u) Annually, a detailed list of the Borrower Parties'
customers, with address and contact information."

         2.04 AMENDMENT TO SECTION 7.9 OF THE CREDIT AGREEMENT. Section 7.9 of
the Credit Agreement is hereby amended by replacing the first reference therein
to "Borrower Party" with "Loan Party".

         2.05 AMENDMENT TO SECTION 7.12 OF THE CREDIT AGREEMENT. Section 7.12 of
the Credit Agreement is hereby amended by deleting "No Borrower Party" and
inserting "No Loan Party" in lieu thereof.

         2.06 AMENDMENT TO SECTION 7.13 OF THE CREDIT AGREEMENT. Section 7.13 of
the Credit Agreement is hereby amended by deleting it in its entirety and
inserting the following in lieu thereof:

                  "7.13 Debt. No Loan Party shall incur or maintain any Debt,
other than: (a) the Obligations (including Debt incurred pursuant to any Hedge
Agreements so long as that the aggregate outstanding notional amount of all
Hedge Agreements shall not at any time exceed an amount equal to fifty-five
percent (55%) of the Commitments (it being understood that, for purposes of this
clause (a), in calculating the aggregate outstanding notional amount of Hedge
Agreements, the notional amount of Hedge Agreements providing for swaps of
floating interest rates for fixed interest rates shall be netted against the
notional amount of Hedge Agreements providing for swaps of fixed interest rates
for floating interest rates of similar tenors); (b) Debt described on Schedule
6.9; (c) Capital Leases of Equipment and purchase money secured Debt incurred to
purchase Equipment (or any renewals or refinancing of such Debt on terms not
materially less favorable to the Loan Parties) provided that (i) Liens securing
the same attach only to the applicable Equipment acquired by the incurrence of
such Debt, and (ii) the aggregate amount of such Debt (including Capital Leases)
outstanding does not exceed $3,000,000 at any time; (d) Debt evidencing a
refunding, renewal or extension of the Debt described on Schedule 6.9; provided
that (i) the principal amount thereof is not increased, (ii) the Liens, if any,
securing such refunded, renewed or extended Debt do not attach to any assets in
addition to those assets, if any, securing the Debt to be refunded, renewed or
extended, (iii) no Person that is not an obligor or guarantor of such Debt as of
the Closing Date shall become an obligor or guarantor thereof, and (iv) the
terms of such refunding, renewal or extension are not materially less favorable
to the Loan Parties, the Agent, the Co-Agent or the Lenders than the original
Debt; (e) the Senior Notes and any refinancings, refundings, renewals or
extensions thereof; provided that any such refinancing, refundings, renewals or
extensions do not increase the aggregate principal amount outstanding thereunder
by more than $25,000,000 and do not shorten the maturity of any principal amount
thereof, (f) the Intercompany Account so long as such Debt is subject to the


                                       3
<PAGE>
Subordination Agreement and, provided that, from and after May 11, 2005, (i) no
Borrower Party shall make any Investment in a Foreign Subsidiary and (ii) no
Foreign Subsidiary shall make any Investment in another Foreign Subsidiary, (g)
Debt in respect of swap agreements entered into for non-speculative purposes
related to hedging interest rates, currency values and commodities; (h) Debt
arising by reason of Guaranties by the Loan Parties permitted by Section
7.12(b); (i) Debt assumed or acquired in connection with any Permitted
Acquisition which Debt is outstanding on the date of such Permitted Acquisition
and does not, individually or in the aggregate with respect to one or more
Permitted Acquisitions, exceed $1,000,000; and (j) Seller Subordinated Debt. The
Parent shall not enter into any amendment or modification of the documents
evidencing the Debt permitted under clauses (e), (f) or (g) above that is in any
manner adverse to the Parent, any Subsidiary, the Agent or any Lender."

         2.07 AMENDMENT TO SECTION 7.15 OF THE CREDIT AGREEMENT. Section 7.15 of
the Credit Agreement is hereby amended by replacing the reference to "Borrower
Party" in the first sentence thereof with "Loan Party".

         2.08 AMENDMENT TO SECTION 7.18 OF THE CREDIT AGREEMENT. Section 7.18 of
the Credit Agreement is hereby amended by deleting "No Borrower Party" and
inserting "No Loan Party" in lieu thereof.

         2.09 AMENDMENT TO SECTION 7.19 OF THE CREDIT AGREEMENT. Section 7.19 of
the Credit Agreement is hereby amended by deleting "No Borrower Party" and
inserting "No Loan Party" in lieu thereof.

         2.10 AMENDMENT TO SECTION 7.20 OF THE CREDIT AGREEMENT. Section 7.20 of
the Credit Agreement is hereby amended by deleting it in its entirety and
inserting the following in lieu thereof:

                  "7.20 No New Subsidiaries. No Loan Party shall, directly or
indirectly, organize, create, acquire or permit to exist any Subsidiary after
May 11, 2005."

         2.11 AMENDMENT TO SECTION 7.24 OF THE CREDIT AGREEMENT. Section 7.24 of
the Credit Agreement is hereby amended by deleting it in its entirety and
inserting the following in lieu thereof:

                  "7.24 Fixed Charge Coverage Ratio. No Borrower Party shall
permit the Consolidated Fixed Charge Coverage Ratio, calculated on a
consolidated basis with respect to the Parent and its Subsidiaries, as of the
end of each fiscal month for the twelve-month period then ending, to be less
than the amount set forth below for the applicable period set forth below:


<Table>
<Caption>
     Applicable Ratio                      Applicable Period
     ----------------                      -----------------
<S>                        <C>
0.35 to 1.00               For the 12-month period ending March 31, 2005

0.39 to 1.00               For the 12-month period ending April 30, 2005

0.38 to 1.00               For the 12-month period ending May 31, 2005

0.47 to 1.00               For the 12-month period ending June 30, 2005

0.48 to 1.00               For the 12-month period ending July 31, 2005

0.46 to 1.00               For the 12-month period ending August 31, 2005
</Table>


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<PAGE>

<Table>
<Caption>
     Applicable Ratio                         Applicable Period
     ----------------                         -----------------
<S>                           <C>
0.40 to 1.00                  For the 12-month period ending September 30, 2005

0.33 to 1.00                  For the 12-month period ending October 30, 2005

0.29 to 1.00                  For the 12-month period ending November 30, 2005

0.40 to 1.00                  For the 12-month period ending December 31, 2005

1.00 to 1.00, unless          For each 12-month period ending on the last day of
otherwise agreed to in        each month thereafter
writing by the Co-Agent
and the Borrowers
</Table>


         2.12 AMENDMENT TO ARTICLE 7 OF THE CREDIT AGREEMENT. Article 7 of the
Credit Agreement is hereby amended by inserting the following Section 7.31 in
proper numerical order:

                  "7.31 Foreign Subsidiary Distributions. Upon (a) any issuance
of Debt or shares of Stock by any Foreign Subsidiary or (b) any sale or other
disposition of assets by any Foreign Subsidiary which would, in either case,
require a prepayment pursuant to Section 3.1(c), such Foreign Subsidiary shall
cause an amount equal to the amount that is required to be used to make the
prepayments required pursuant to Section 3.1(c) (such amount, the "Required
Amount") to be distributed to its immediate parent entity and such immediate
parent entity shall cause such Required Amount to be distributed to its
immediate parent entity and such distributions shall continue until such
Required Amount is ultimately distributed to Parent for use by Parent to make
the prepayments required pursuant to Section 3.1(c)."

         2.13 AMENDMENT TO ARTICLE 7 OF THE CREDIT AGREEMENT. Article 7 of the
Credit Agreement is hereby amended by inserting the following Section 7.32 in
proper numerical order:

                  "7.32 Additional Stock Pledges. To the extent permitted under
applicable law, each Loan Party hereby agrees to unconditionally pledge,
transfer, convey, grant and assign to Agent the Stock of any of its Subsidiaries
if Co-Agent requests in writing. In addition, in connection therewith, to the
extent permitted under applicable law, the applicable Loan Party shall deliver
the certificates representing all of the outstanding shares of each of the
applicable Subsidiaries owned by it, together with undated stock powers covering
each such certificate, duly executed in blank."

         2.14 AMENDMENT TO SECTION 13.7 OF THE CREDIT AGREEMENT. Section 13.7 of
the Credit Agreement is hereby amended by inserting the following at the end of
the current paragraph:

                  "In addition, at any time, the Co-Agent may, at its option and
in its sole discretion, engage a financial consultant, and the Borrowers agree
to pay, on demand, all costs and expenses incurred by Co-Agent with respect to
such engagement."

         2.15 AMENDMENTS TO ANNEX A: CREDIT AGREEMENT DEFINITIONS.

                  (a) The definition of "Applicable Prepayment Premium" is
hereby amended by deleting it in its entirety.

                  (b) Clause (a)(D) of the definition of "Borrowing Base" is
hereby amended by deleting it in its entirety and inserting the following in
lieu thereof:

                  "(D) the sum of

                           (I) the lesser of

                                    (i) the sum of


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<PAGE>

                                             (x) ten percent (10%) of the Net
Amount of Eligible Accounts, plus,

                                             (y) the sum of (I) twenty-four
percent (24%) of the value of the Eligible Landed Inventory, plus (II)
twenty-nine percent (29%) of the book value of Eligible In-Transit Inventory
valued at the lower of cost (determined on a first-in, first-out basis) or
market; and

                                    (ii) $30,000,000, plus

                           (II) $11,000,000,"

                  (c) The following definition of "Collections" is hereby
inserted in Annex A of the Credit Agreement in proper alphabetical order:

                  ""Collections" means all cash, checks, notes, instruments, and
other items of payment (including insurance proceeds, proceeds of cash sales,
rental proceeds, and tax refunds)."

                  (d) The definition of "Consolidated EBITDA" is hereby amended
by inserting the following at the end of the current definition ", and
impairment losses incurred in connection with a restructuring of the U.S.
operations in an aggregate amount not to exceed the applicable amount set forth
in Schedule E-4 for each applicable period."

                  (e) The definition of "EBITDA" is hereby amended by inserting
the following at the end of the current definition ", and impairment losses
incurred in connection with a restructuring of the U.S. operations in an
aggregate amount not to exceed the applicable amount set forth in Schedule E-4
for each applicable period."

                  (f) The following definition of "Loan Parties" is hereby
inserted in Annex A of the Credit Agreement in proper alphabetical order:

                  ""Loan Parties" means, collectively, the Borrower Parties and
the Foreign Subsidiaries (other than Amalgamated Appliance Holding Limited)."

                  (g) The following definition of "Make-Whole Amount" is hereby
inserted in Annex A of the Credit Agreement in proper alphabetical order:

                  ""Make-Whole Amount" means, as of any date of determination,
an amount equal to (a) during the period of time from and after the date of the
execution and delivery of this Agreement up to June 15, 2006, 5.00% times the
Maximum Amount; and (b) during the period of time from and including June 15,
2006 up to the Stated Termination Date, 4.00% times the Maximum Amount."

                  (h) The following definition of "Net Cash Proceeds" is hereby
inserted in Annex A of the Credit Agreement in proper alphabetical order:


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<PAGE>

                  ""Net Cash Proceeds" means, (a) with respect to the sale or
issuance by any Person or any of its Subsidiaries of any shares of its Stock,
the aggregate amount of cash received (directly or indirectly) from time to time
(whether as initial consideration or through the payment or disposition of
deferred consideration) by or on behalf of such Person or such Subsidiary in
connection therewith, after deducting therefrom only (i) reasonable costs and
expenses related thereto incurred by such Person or such Subsidiary in
connection therewith (including, without limitation, legal, accounting and
investment banking fees, and underwriting discounts and commissions), (ii)
transfer taxes paid by such Person or such Subsidiary in connection therewith
and (iii) net income taxes to be paid in connection therewith (after taking into
account any tax credits or deductions and any tax sharing arrangements), and (b)
with respect to any sale or disposition by any Person or any Subsidiary thereof
of property or assets, the amount of Collections received (directly or
indirectly) from time to time (whether as initial consideration or through the
payment of deferred consideration) by or on behalf of such Person or such
Subsidiary, in connection therewith after deducting therefrom only (i) the
amount of any Debt secured by any Permitted Lien on any asset (other than (A)
Debt owing to Agent, Co-Agent or any Lender under this Agreement or the other
Loan Documents and (B) Debt assumed by the purchaser of such asset) which is
required to be, and is, repaid in connection with such disposition, (ii)
reasonable expenses related thereto incurred by such Person or such Subsidiary
in connection therewith, and (iii) taxes paid or payable to any taxing
authorities by such Person or such Subsidiary in connection therewith, in each
case to the extent, but only to the extent, that the amounts so deducted are, at
the time of receipt of such cash, actually paid or payable to a Person that is
not an Affiliate and are properly attributable to such transaction; in the case
of each of clauses (a) and (b), to the extent, but only to the extent, that the
amounts so deducted are (x) actually paid to a Person that, except in the case
of reasonable out-of-pocket expenses, is not an Affiliate of such Person or any
of its Subsidiaries and (y) properly attributable to such transaction or to the
asset that is the subject thereof, as the case may be."

                  (i) The definition of "Reserves" is hereby amended by (i)
deleting "and" prior to clause (k) in the last sentence thereof and inserting a
comma in lieu thereof and (ii) inserting the following at the end of the last
sentence: "and (l) reserves implemented pursuant to Section 3.1(c) of this
Agreement."

         2.16 SCHEDULE 7.22. Schedule 7.22 of the Credit Agreement is hereby
amended by deleting it in its entirety and inserting the Schedule 7.22 attached
hereto in lieu thereof.

SECTION 3. REPRESENTATIONS AND WARRANTIES. In order to induce the Agent, the
Co-Agent and the Lenders to enter into this Second Amendment, the Borrower
Parties hereby represent and warrant that:

         3.01 NO DEFAULT. At and as of the date of this Second Amendment and
after giving effect to this Second Amendment, no Default or Event of Default
exists.

         3.02 REPRESENTATIONS AND WARRANTIES TRUE AND CORRECT. At and as of the
date of this Second Amendment and both prior to and after giving effect to this
Second Amendment, each of the representations and warranties contained in the
Credit Agreement and other Loan Documents is true and correct in all material
respects.


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<PAGE>

         3.03 CORPORATE POWER, ETC. The Borrower Parties (a) have all requisite
corporate power and authority to execute and deliver this Second Amendment and
to consummate the transactions contemplated hereby and (b) have taken all
action, corporate or otherwise, necessary to authorize the execution and
delivery of this Second Amendment and the consummation of the transactions
contemplated hereby.

         3.04 NO CONFLICT. Neither the execution and delivery of this Second
Amendment nor consummation of the transactions contemplated hereby will (a)
conflict with or result in any breach or violation of any provision of the
certificate of incorporation, certificate of formation or by-laws of the
Borrower Parties, (b) result in any breach or violation of, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in the creation of a Lien upon any of the
properties or assets of the Borrower Parties under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, deed of trust, license,
lease agreement or other instrument or obligation to which the Borrower Parties
are parties or to which any of their properties or assets are subject, (c)
except as may be required pursuant to the pledges and guarantees contemplated by
Sections 7.01, 7.02, 7.03, 8.01, 8.02 and 8.03 of this Second Amendment, require
any consent, approval, authorization or permit of, or filing with or
notification to, any third party or any Governmental Authority, or (d) violate
any order, writ, injunction, decree, judgment, ruling, law, statute, rule or
regulation of any Governmental Authority.

         3.05 BINDING EFFECT. This Second Amendment has been duly executed and
delivered by the Borrower Parties and constitutes the legal, valid and binding
obligation of the Borrower Parties, enforceable against the Borrower Parties in
accordance with its terms, except as such enforceability may be limited by (a)
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws, now or hereafter in effect, relating to or affecting the enforcement of
creditors' rights generally, and (b) the application of general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).

SECTION 4. ACKNOWLEDGMENT REGARDING SLOW MOVING INVENTORY. The Borrower Parties
hereby acknowledge, agree and confirm that, from and after the Increased
Liquidity Effective Date, pursuant to clause (f) of the definition of Eligible
Landed Inventory, slow moving or stale inventory shall not be included in
Eligible Landed Inventory unless Agent, Co-Agent and Required Lenders otherwise
elect in their sole discretion.

SECTION 5. FISCAL 2006 PLAN. Borrowers hereby covenant and agree to deliver to
Co-Agent (with a copy to be delivered concurrently to Agent), on or prior to May
31, 2005, the projections of the Parent's and the Subsidiaries' financial
condition, results of operations, and cash flows, for the twelve month period
ending on June 30, 2007, in form and substance acceptable to Co-Agent.

SECTION 6. CONDITIONS. This Second Amendment (other than the amendments
contemplated by Section 2.15(b) hereof) shall be effective as of May 11, 2005
(the "Effective Date") upon the fulfillment by the Borrower Parties, in a manner
satisfactory to the Co-Agent and the Required Lenders, of all of the following
conditions precedent set forth in this Section 6:


                                       8
<PAGE>

         6.01 EXECUTION OF THE SECOND AMENDMENT. Each of the parties hereto
shall have executed an original counterpart of this Second Amendment and shall
have delivered (including by way of telefacsimile or electronic mail) the same
to the Co-Agent.

         6.02 DELIVERY OF OTHER DOCUMENTS. The Co-Agent shall have received all
such other instruments, documents and agreements as the Co-Agent may reasonably
request, in form and substance reasonably satisfactory to the Co-Agent.

         6.03 REPRESENTATIONS AND WARRANTIES. As of the Effective Date, the
representations and warranties set forth in Section 3 hereof shall be true and
correct.

SECTION 7. CONDITIONS TO INCREASED LIQUIDITY. The amendments contemplated by
Section 2.15(b) of this Second Amendment shall be effective upon the fulfillment
by the Borrower Parties, in a manner satisfactory to the Co-Agent and the
Required Lenders, of all of the following conditions precedent set forth in this
Section 7 (the "Increased Liquidity Effective Date") (it being understood and
agreed that until the Increased Liquidity Effective Date, Agent and Co-Agent
shall include slow moving and stale inventory in Eligible Landed Inventory in
the same manner as has been done immediately prior to the Effective Date):

         7.01 DELIVERY OF STOCK CERTIFICATES AND STOCK POWERS. Pifco Overseas
Ltd. shall have delivered to the Agent the certificates representing all of the
outstanding shares of Amalgamated Appliance Holding Limited owned by it,
together with undated stock powers covering each such certificate, duly executed
in blank.

         7.02 EXECUTION OF THE PIFCO GUARANTY. Pifco Overseas Ltd. shall have
executed and delivered to Agent a guaranty, in form and substance satisfactory
to the Co-Agent.

         7.03 EXECUTION OF THE PIFCO PLEDGE AGREEMENT. Pifco Overseas Ltd. shall
have executed and delivered to Agent a pledge agreement, in form and substance
satisfactory to the Co-Agent.

         7.04 EXECUTION OF THE PIFCO BLOCKED ACCOUNT AGREEMENTS. Pifco Overseas
Ltd. shall have executed and delivered to Agent a Blocked Account Agreement, in
form and substance satisfactory to the Co-Agent.

         7.05 OPINIONS OF BORROWER PARTIES' COUNSEL. Agent shall have received
opinions of Borrower Parties' U.S. and foreign counsels relating to the
transactions contemplated hereby, each in form and substance satisfactory to
Co-Agent.

         7.06 DELIVERY OF SCHEDULE 6.9. The Borrower Parties shall have
delivered to the Agent a revised Schedule 6.9 of the Credit Agreement, in form
and substance satisfactory to Co-Agent.

SECTION 8. COVENANTS RELATING TO FOREIGN PLEDGES AND GUARANTIES. The obligation
of the Lenders (or any member thereof) to continue to make Advances (or
otherwise extend credit hereunder) is subject to the fulfillment, on or before
the date applicable thereto, of each of the


                                       9
<PAGE>


conditions subsequent set forth below (the failure by the Borrower Parties to so
perform or cause to be performed constituting an Event of Default):

         8.01 DELIVERY OF STOCK CERTIFICATES AND STOCK POWERS. On or prior to
May 20, 2005, Pifco Overseas Ltd. shall deliver to the Agent the certificates
representing all of the outstanding shares of Amalgamated Appliance Holding
Limited owned by it, together with undated stock powers covering each such
certificate, duly executed in blank.

         8.02 EXECUTION OF THE PIFCO GUARANTY. On or prior to May 20, 2005,
Pifco Overseas Ltd. shall have executed and delivered to Agent a guaranty, in
form and substance satisfactory to the Co-Agent.

         8.03 EXECUTION OF THE PIFCO PLEDGE AGREEMENT. On or prior to May 20,
2005, Pifco Overseas Ltd. shall have executed and delivered to Agent a pledge
agreement, in form and substance satisfactory to the Co-Agent.

         8.04 EXECUTION OF THE PIFCO BLOCKED ACCOUNT AGREEMENTS. On or prior to
May 20, 2005, Pifco Overseas Ltd. shall have executed and delivered to Agent a
Blocked Account Agreement, in form and substance satisfactory to the Co-Agent.

         8.05 OPINIONS OF BORROWER PARTIES' COUNSEL. On or prior to May 20,
2005, Agent shall have received opinions of Borrower Parties' U.S. and foreign
counsels relating to the transactions contemplated hereby, each in form and
substance satisfactory to Co-Agent.

         8.06 DELIVERY OF SCHEDULE 6.9. On or prior to May 20, 2005, the
Borrower Parties shall have delivered to the Agent a revised Schedule 6.9 of
the Credit Agreement, in form and substance satisfactory to Co-Agent.

         8.07 DELIVERY OF STOCK CERTIFICATES AND STOCK POWERS. On or prior to
June 10, 2005, to the extent permitted under applicable law, Parent and its
Subsidiaries shall deliver to Agent the certificates representing all of the
outstanding shares of each of the Foreign Subsidiaries listed in Annex A owned
by it, together with undated stock powers covering each such certificate, duly
executed in blank.

         8.08 EXECUTION OF THE FOREIGN PLEDGE AGREEMENTS. On or prior to June
10, 2005, to the extent permitted under applicable law, each of the Foreign
Subsidiaries listed in Annex B shall have executed and delivered to Agent a
pledge agreement, each in form and substance satisfactory to Co-Agent.

         8.09 DELIVERY OF THE INTERCOMPANY NOTE. On or prior to June 10, 2005,
Parent shall deliver to Agent the intercompany note executed in 2001 between
Parent and Salton UK in an initial aggregate principal amount of approximately
Pound Sterling35.7M, together with an undated allonge covering such note, duly
executed in blank.

         8.10 OPINIONS OF FOREIGN BORROWER PARTIES' COUNSEL. On or prior to June
10, 2005, Agent shall have received opinions of Borrower Parties' foreign
counsels with respect to the deliveries contemplated by Sections 8.07, 8.08 and
8.09, each in form and substance satisfactory to Co-Agent.


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<PAGE>

SECTION 9. MISCELLANEOUS.

         9.01 CONTINUING EFFECT. Except as specifically provided herein, the
Credit Agreement and the other Loan Documents shall remain in full force and
effect in accordance with their respective terms and are hereby ratified and
confirmed in all respects.

         9.02 NO WAIVER; RESERVATION OF RIGHTS. This Second Amendment is limited
as specified and the execution, delivery and effectiveness of this Second
Amendment shall not operate as a modification, acceptance or waiver of any
provision of the Credit Agreement, or any other Loan Document, except as
specifically set forth herein. Notwithstanding anything contained in this Second
Amendment to the contrary, Agent, Co-Agent and the Lenders expressly reserve the
right to exercise any and all of their rights and remedies under the Credit
Agreement, any other Loan Document and applicable law in respect of any Default
or Event of Default.

         9.03 REFERENCES.

                  (a) From and after the Effective Date, (i) the Credit
Agreement, the other Loan Documents and all agreements, instruments and
documents executed and delivered in connection with any of the foregoing shall
each be deemed amended hereby to the extent necessary, if any, to give effect to
the provisions of this Second Amendment and (ii) all of the terms and provisions
of this Second Amendment are hereby incorporated by reference into the Credit
Agreement, as applicable, as if such terms and provisions were set forth in full
therein, as applicable.

                  (b) From and after the Effective Date, (i) all references in
the Credit Agreement to "this Agreement", "hereto", "hereof", "hereunder" or
words of like import referring to the Credit Agreement shall mean the Credit
Agreement as amended hereby and (ii) all references in the Credit Agreement, the
other Loan Documents or any other agreement, instrument or document executed and
delivered in connection therewith to "Credit Agreement", "thereto", "thereof",
"thereunder" or words of like import referring to the Credit Agreement shall
mean the Credit Agreement as amended hereby.

         9.04 GOVERNING LAW. THIS SECOND AMENDMENT, AND ALL MATTERS ARISING OUT
OF OR RELATING TO THE SUBJECT MATTER HEREOF, SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

         9.05 SEVERABILITY. The provisions of this Second Amendment are
severable, and if any clause or provision shall be held invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction and shall not in any manner affect such clause or provision in
any other jurisdiction, or any other clause or provision in this Second
Amendment in any jurisdiction.

         9.06 COUNTERPARTS. This Second Amendment may be executed in any number
of counterparts and by facsimile, each of which counterparts when executed and
delivered shall be an original, but all of which shall together constitute one
and the same instrument. Delivery of an executed counterpart of this Second
Amendment by telefacsimile or electronic mail shall be

                                       11
<PAGE>

equally effective as delivery of a manually executed counterpart. A complete set
of counterparts shall be lodged with the Borrower Parties, the Agent, the
Co-Agent and each Lender.

         9.07 HEADINGS. Section headings in this Second Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Second Amendment for any other purpose.

         9.08 BINDING EFFECT; ASSIGNMENT. This Second Amendment shall be binding
upon and inure to the benefit of the Borrower Parties, the Agent, the Co-Agent
and the Lenders and their respective successors and assigns; provided, however,
that the rights and obligations of the Borrower Parties under this Second
Amendment shall not be assigned or delegated without the prior written consent
of the Agent, the Co-Agent and the Lenders.

         9.09 EXPENSES. The Borrowers agree to pay the Agent and Co-Agent upon
demand, for all reasonable expenses, including reasonable fees of attorneys and
paralegals for the Agent, the Co-Agent and the Lenders (who may be employees of
the Agent, Co-Agent or the Lenders), incurred by the Agent, the Co-Agent and the
Lenders in connection with the preparation, negotiation and execution of this
Second Amendment and any document required to be furnished herewith.

         9.10 INTEGRATION. This Second Amendment, together with the other Loan
Documents, incorporates all negotiations of the parties hereto with respect to
the subject matter hereof and is the final expression and agreement of the
parties hereto with respect to the subject matter hereof.


                            [Signature pages follow]


                                       12
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be executed by their respective officers thereunto duly authorized,
as of the date first above written.


                                  BORROWERS:

                                  SALTON, INC., a Delaware corporation

                                  By:
                                      -----------------------------------------
                                  Title:
                                         --------------------------------------


                                  TOASTMASTER INC., a Missouri
                                  corporation

                                  By:
                                      -----------------------------------------
                                  Title:
                                         --------------------------------------


                                  SALTON TOASTMASTER LOGISTICS
                                  LLC, a Delaware limited liability company

                                  By:
                                      -----------------------------------------
                                  Title:
                                         --------------------------------------

                                  GUARANTORS:

                                  HOME CREATIONS DIRECT, LTD.,
                                  a Delaware corporation

                                  By:
                                      -----------------------------------------
                                  Title:
                                         --------------------------------------


                                  SONEX INTERNATIONAL
                                  CORPORATION, a Delaware corporation

                                  By:
                                      -----------------------------------------
                                  Title:
                                         --------------------------------------


                      [Signature Page for Second Amendment]

<PAGE>


                                  ICEBOX, LLC, an Illinois limited
                                  liability company

                                  By:
                                      -----------------------------------------
                                  Title:
                                         --------------------------------------


                                  FAMILY PRODUCTS INC., a Delaware
                                  corporation

                                  By:
                                      -----------------------------------------
                                  Title:
                                         --------------------------------------


                                  SALTON HOLDINGS, INC., a Delaware
                                  corporation

                                  By:
                                      -----------------------------------------
                                  Title:
                                         --------------------------------------


                                  AGENT AND CO-AGENT:

                                  WELLS FARGO FOOTHILL, INC.
                                  as the Administrative Agent and the Collateral
                                  Agent

                                  By:
                                      -----------------------------------------
                                  Its:
                                       ----------------------------------------


                                  SILVER POINT FINANCE, LLC, as the
                                  Co-Agent, the Documentation Agent, and the
                                  Syndication Agent

                                  By:
                                      -----------------------------------------
                                  Its:
                                       ----------------------------------------


                      [Signature Page for Second Amendment]

<PAGE>

                                  LENDERS:

                                  TRS THEBE LLC, as a Lender

                                  By:
                                      -----------------------------------------
                                  Its:
                                       ----------------------------------------


                                  SEA PINES FUNDING LLC, as a Lender

                                  By:
                                      -----------------------------------------
                                  Its:
                                       ----------------------------------------


                                  SPIRET IV LOAN TRUST 2003-A, as a Lender

                                  By: WILMINGTON TRUST COMPANY,
                                  not in its individual capacity but solely as
                                  trustee

                                  By:
                                      -----------------------------------------
                                  Its:
                                       ----------------------------------------


                                  SPCP GROUP LLC, as a Lender

                                  By:
                                      -----------------------------------------
                                  Its:
                                       ----------------------------------------


                                  FIELD POINT I, LTD., as a Lender


                                  By:
                                      -----------------------------------------
                                  Its:
                                       ----------------------------------------

                      [Signature Page for Second Amendment]


<PAGE>

                                  FIELD POINT II, LTD.,  as a Lender

                                  By:
                                      -----------------------------------------
                                  Its:
                                       ----------------------------------------


                                  WELLS FARGO FOOTHILL, INC.,
                                  as a Lender

                                  By:
                                      -----------------------------------------
                                  Title:
                                         --------------------------------------


                      [Signature Page for Second Amendment]

<PAGE>


                                     ANNEX A


                 Salton Hong Kong Ltd.

                 Salton Australia Pty., Ltd.

                 Salton UK



<PAGE>

                                     ANNEX B


                            Salton International CV

                            Salton UK Holdings Ltd.

                            Salton Nominees Ltd.