SIXTH AMENDMENT TO FINANCING AGREEMENT
This SIXTH AMENDMENT TO FINANCING AGREEMENT (this "Amendment"), dated
as of July 18,2000, 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) Clause (c) of the definition of "Line of Credit" set forth
in Section 1 of the Financing Agreement is hereby amended and restated in its
entirety to read as follows:
"(c) July 18 - December 31, 2000 $31,000,000"
(b) For the period commencing July 18, 2000 and ending
September 30, 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 "$14,500,000".
(c) For the period commencing July 18, 2000 and ending
September 30, 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
"$26,000,000".
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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"):
(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).
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(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 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.
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(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.
(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: /s/ Jeffrey P. Forgan
-----------------------------------
Name: Jeffrey P. Forgan
---------------------------------
Title: SVP, CFO
---------------------------------
By: /s/ Tracy Y. Wan
-----------------------------------
Name: Tracy Y. Wan
---------------------------------
Title: President, COO
--------------------------------
THE CIT GROUP/BUSINESS CREDIT, INC., a
New York Corporation
By: /s/ Adrian Avalos
------------------------------------
Name: Adrian Avalos
---------------------------------
Title: VP
---------------------------------
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