SEVENTH AMENDMENT TO FINANCING AGREEMENT
This SEVENTH AMENDMENT TO FINANCING AGREEMENT (this "Amendment"),
dated as of September 29, 2000, is entered into by and among SHARPER IMAGE
CORPORATION, a Delaware corporation (the "Borrower") and THE CIT GROUP/BUSINESS
CREDIT, INC., a New York corporation ("CITBC"), and amends that certain
Financing Agreement, dated September 21, 1994 (as the same is in effect
immediately prior to the effectiveness of this Amendment, the "Existing
Financing Agreement" and as the same may be amended, supplemented or modified
and in effect from time to time, the "Financing Agreement"), by and between the
Borrower and CITBC. Capitalized terms used and not otherwise defined in this
Amendment shall have the same meanings in this Amendment as set forth in the
Financing Agreement.
RECITAL
The Borrower has requested that CITBC amend various provisions of the
Existing Financing Agreement, and CITBC is willing to agree to so amend the
Existing Financing Agreement on the terms and subject to the conditions set
forth below.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
and agreements set forth below and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties agree as
follows:
SECTION 1. Amendments. On the terms of this Amendment and subject to
the satisfaction of the conditions precedent set forth below in Section 2, CITBC
and the Borrower hereby agree as follows:
(a) For the period commencing October 1, 2000 and ending December
31, 2000, the limit on the aggregate amount of Eligible Ordered Inventory
computed pursuant to clauses (a) and (b) of Section 3, Paragraph 1 of the
Financing Agreement set forth in the proviso to such paragraph shall hereby be
temporarily increased from "$6,500,000" to "$15,000,000".
(b) For the period commencing October 1,2000 and ending December
31, 2000, the limit on documentary Letters of Credit set forth in clause (i) of
the first sentence of Section 4, Paragraph 1 of the Financing Agreement shall
hereby be temporarily increased from "$15,000,000" to "$23,000,000".
SECTION 2. Conditions to Effectiveness. The amendments set forth in
Section 1 of this Amendment shall become effective only upon the satisfaction of
all of the following conditions precedent (the date of satisfaction of all such
conditions being referred to as the "Amendment Effective Date"):
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(a) On or before the Amendment Effective Date, CITBC shall have
received this Amendment, duly executed and delivered by the Borrower.
(b) On or before the Amendment Effective Date, all corporate and
other proceedings taken or to be taken in connection with the transactions
contemplated by this Amendment, and all documents incidental thereto, shall be
reasonably satisfactory in form and substance to CITBC and its counsel, and
CITBC and such counsel shall have received all such counterpart originals or
certified copies of such documents as they may reasonably request.
(c) On or before the Amendment Effective Date, CITBC shall have
received a legal documentation fee of $1,500, which fee shall be fully earned as
of the date hereof.
(d) Each of the representations and warranties set forth in this
Amendment shall be true and correct as of the Amendment Effective Date.
SECTION 3. Representations and Warranties. In order to induce CITBC to
enter into this Amendment and to amend the Existing Financing Agreement in the
manner provided in this Amendment, the Borrower represents and warrants to CITBC
as of the Amendment Effective Date as follows:
(a) Power and Authority. The Borrower has all requisite corporate
power and authority to enter into this Amendment and to carry out the
transactions contemplated by, and perform its obligations under, the Existing
Financing Agreement as amended by this Amendment (hereafter referred to as the
"Amended Financing Agreement").
(b) Authorization of Agreements. The execution and delivery of
this Amendment by the Borrower and the performance of the Amended Financing
Agreement by the Borrower have been duly authorized by all necessary action, and
this Amendment has been duly executed and delivered by the Borrower.
(c) Enforceability. The Amended Financing Agreement constitutes
the legal, valid and binding obligation of the Borrower enforceable against the
Borrower in accordance with its terms, except as may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors rights
in general. The enforceability of the obligations of the Borrower hereunder is
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(d) No Conflict. The execution and delivery by the Borrower of
this Amendment and the performance by the Borrower of the Amended Financing
Agreement do not and will not (i) contravene, in any material respect, any
provision of any law, regulation, decree, ruling, judgment or order that is
applicable to the Borrower or its properties or other assets, (ii) result in a
breach of or constitute a default under the charter, bylaws or other
organizational documents of the Borrower, or any material agreement, indenture,
lease or instrument binding
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upon the Borrower or its properties or other assets or (iii) result in the
creation or imposition of any liens on its properties other than as permitted
under the Financing Agreement.
(e) Governmental Consents. No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
the Borrower of this Amendment.
(f) Representations and Warranties in the Financing Agreement.
The Borrower confirms that as of the Amendment Effective Date the
representations and warranties contained in Section 6 of the Financing Agreement
are (before and after giving effect to this Amendment) true and correct in all
material respects (except to the extent any such representation and warranty is
expressly stated to have been made as of a specific date, in which case it shall
be true and correct as of such specific date) and that no Default or Event of
Default has occurred and is continuing.
SECTION 4. Miscellaneous.
(a) Reference to and Effect on the Existing Financing Agreement.
(i) Except as specifically amended by this Amendment and the
documents executed and delivered in connection herewith, the Existing Financing
Agreement shall remain in full force and effect and is hereby ratified and
confirmed.
(ii) The execution and delivery of this Amendment and
performance of the Amended Financing Agreement shall not, except as expressly
provided herein, constitute a waiver of any provision of, or operate as a waiver
of any right, power or remedy of CITBC under, the Existing Financing Agreement
or any agreement or document executed in connection therewith.
(iii) Upon the conditions precedent set forth herein being
satisfied, this Amendment shall be construed as one with the Existing Financing
Agreement, and the Existing Financing Agreement shall, where the context
requires, be read and construed throughout so as to incorporate this Amendment.
(b) Fees and Expenses. The Borrower acknowledges that all costs,
fees and expenses incurred in connection with this Amendment will be paid in
accordance with Section 7, Paragraph 4 of the Existing Financing Agreement.
(c) Headings. Section and subsection headings in this Amendment
are included for convenience of reference only and shall not constitute a part
of this Amendment for any other purpose or be given any substantive effect.
(d) Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
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(e) Governing Law. This Amendment shall be governed by and
construed according to the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment
as of the date first above written.
SHARPER IMAGE CORPORATION, a Delaware
corporation
By: Tracy Y. Wan
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Name: Tracy Y. Wan
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Title: President, C.O.O
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By: Jeffrey P. Forgan
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Name: Jeffrey P. Forgan
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Title: Senior C.F.O
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THE CIT GROUP/BUSINESS CREDIT, INC., a
New York corporation
By: Adrian Avalos
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Name: Adrian Avalos
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Title: V.P.
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