Exhibit
      10.1

     

    Salton,
      Inc.

    3633
      Flamingo Road

    Miami,
      FL
      33027

     

    July
      13,
      2008

    Spectrum
      Brands, Inc.

    Six
      Concourse Parkway, Suite 3300

    Atlanta,
      Georgia 30328

     

    Ladies
      and Gentlemen:

     

    Reference
      is hereby made to that certain Purchase Agreement, dated as of May 20, 2008
      (as
      amended or modified from time to time in accordance with its terms, the
“Purchase
      Agreement”),
      by
      and among Spectrum Brands, Inc., a Wisconsin corporation (“Spectrum”),
      Salton, Inc., a Delaware corporation (“Salton”),
      and
      Applica Pet Products LLC, a Delaware limited liability company (“Pet
      LLC”
and,
      together with Salton, the “Purchaser”).
      Capitalized terms used herein but not defined herein shall have the meanings
      ascribed to them in the Purchase Agreement.

     

    Pursuant
      to Section 8.01(a)(i) of the Purchase Agreement, Spectrum, Salton and Pet LLC
      hereby mutually agree, subject to and conditioned upon, in the case of the
      Purchaser, the receipt of the Reimbursement (as defined below), to terminate
      the
      Purchase Agreement. In consideration of the foregoing, and notwithstanding
      anything to the contrary contained in the Purchase Agreement, as a reimbursement
      of expenses, Spectrum hereby agrees to pay to the Purchaser promptly, and in
      any
      event within two business days, $3,000,000 in immediately available funds (the
      “Reimbursement”)
      to the
      account specified by Purchaser. 

     

    The
      Purchaser and Spectrum agree to consult with each other before issuing, and
      give
      each other the opportunity to review and comment upon, any press release or
      other public statements with respect to the termination contemplated by this
      letter agreement.

     

    This
      letter agreement shall be binding upon and inure to the benefit of the parties
      hereto and their respective successors and assigns. This letter agreement may
      be
      executed in one or more counterparts, all of which shall be considered one
      and
      the same agreement, and shall become effective when one or more such
      counterparts have been signed by each of the parties and delivered to the other
      parties. Delivery of an executed counterpart of a signature page of this letter
      agreement by facsimile or other electronic imaging means shall be effective
      as
      delivery of a manually executed counterpart of this letter
      agreement.

     

    This
      letter agreement shall be governed by, and construed in accordance with, the
      Laws of the State of New York, regardless of the Laws that might otherwise
      govern under applicable principles of conflicts of Laws thereof.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    


     

    [Remainder
      of Page Intentionally Left Blank]

     

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    SALTON,
      INC.

     

     

    By: 
      /s/
      Lisa
      R. Carstarphen

      
        

      

    

    Name:    
      Lisa R. Carstarphen

    Title:      
      Vice President, General Counsel and Corporate Secretary

     

     

    APPLICA
      PET PRODUCTS LLC

     

     

    By: 
      /s/
      Lisa
      R. Carstarphen

      
        

      

    

    Name:    
      Lisa R. Carstarphen

    Title:      
      Vice President, General Counsel and Corporate Secretary

     

     

    SPECTRUM
      BRANDS, INC.

     

     

    By: 
      /s/
      Kent
      J. Hussey

      
        

      

    

    Name:   
       Kent J. Hussey

    Title:      
      CEO