Exhibit 10.22
THIS WARRANT AND THE SHARES ISSUABLE UPON ITS EXERCISE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
SECURITIES LAWS OF ANY STATE IN RELIANCE UPON EXEMPTIONS PROVIDED UNDER THE
SECURITIES ACT. ACCORDINGLY, THIS WARRANT MAY NOT BE SOLD, TRANSFERRED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY TO THE
EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED. IN ADDITION, THIS WARRANT MAY NOT
BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED EXCEPT AS PROVIDED HEREIN. THE
SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT ARE SUBJECT TO REPURCHASE BY THE
COMPANY ON THE TERMS AND SUBJECT TO THE CONDITIONS SET FORTH HEREIN.
SHARPER IMAGE CORPORATION
WARRANT TO PURCHASE COMMON STOCK
Dated February 13, 1997
SHARPER IMAGE CORPORATION (the "Company") certifies that, for
valuable consideration, receipt of which is hereby acknowledged, the Holder is
entitled to purchase from the Company a number of shares of the Company's Common
Stock set forth in Section 1(h) hereof (the "Shares") at the purchase price set
forth in Section 1(e) hereof.
This Warrant and the Common Stock issuable upon exercise hereof
are subject to the terms and conditions hereinafter set forth:
1. Definitions. As used in this Warrant, the following terms
shall have the following meanings:
(a) "Common Stock" - Common Stock, par value $.01 per
share, of the Company;
(b) "Company" - Sharper Image Corporation, a Delaware
corporation;
(c) "Effective Date" - February 13, 1997;
(d) "Holder" - The CIT Group/Business Credit, Inc. or any
transferee thereof;
1.
(e) "Purchase Price" - $3.50 per share, subject to
adjustments pursuant to Section 3 hereof;
(f) "Subscription Form" - the form attached to this Warrant
as Exhibit "A";
(g) "Warrant" - this Warrant and any warrants delivered in
substitution or exchange therefor as provided herein;
(h) "Shares" - up to 50,000 Shares, subject to adjustments
pursuant to Section 3 hereof; and
(i) "Expiration Date" - five (5) years from the Effective
Date.
2. Exercise.
(a) Time of Exercise. This Warrant may be exercised in whole
but not in part (and not as to a fractional share) at the office of the Company,
at any time, commencing on the Effective Date; provided, however, that this
Warrant shall expire and be null and void if not exercised in the manner herein
provided by 5:00 p.m., Pacific Standard Time, on the Expiration Date.
(b) Manner of Exercise. This Warrant is exercisable at the
Purchase Price, payable in cash or by certified check, payable to the order of
the Company, subject to adjustment as provided in Section 3 hereof. Upon
surrender of this Warrant with the annexed Subscription Form duly executed,
together with payment of the Purchase Price for the Shares purchased (and any
applicable transfer taxes) at the Company's principal executive offices, the
Holder shall be entitled to receive a certificate or certificates for the Shares
so purchased.
(c) Delivery of Stock Certificates. As soon as practicable,
but not exceeding 30 days, after exercise of this Warrant, the Company, at its
expense, shall cause to be issued in the name of the Holder (or upon payment by
the Holder of any applicable transfer taxes, the Holder's assigns) a certificate
or certificates for the number of fully paid and non-assessable Shares to which
the Holder shall be entitled upon such exercise, together with such other stock
or securities or property or combination thereof to which the Holder shall be
entitled upon such exercise, determined in accordance with Section 3 hereof.
(d) Record Date of Transfer of Shares. Irrespective of the
date of issuance and delivery of certificates for any stock or securities
issuable upon the exercise of this Warrant, each person (including a corporation
or partnership) in whose name any such certificate is to be issued shall for
all purposes be deemed to have become the holder of record of the stock or other
securities represented thereby immediately prior to the close of business on the
date on which (i) a duly executed Subscription Form containing notice of
exercise of this Warrant, (ii) payment of the Purchase Price, and (iii) the
opinion or certificate required by Section 4(a)(ii) of this Warrant is received
by the Company.
2.
3. Adjustments. Except as otherwise provided in this Section 3,
after each adjustment of the Purchase Price pursuant to this Section 3, the
number of shares of Common Stock purchasable upon exercise of this Warrant shall
be the number derived by dividing such adjusted Purchase Price into the
Purchase Price in effect immediately prior to such adjustment. The Purchase
Price shall be subject to adjustment as follows:
(a) In the event, prior to the expiration of this Warrant by
exercise or by its terms, the Company shall issue any shares of its Common Stock
as a share dividend on its outstanding shares of Common Stock or shall subdivide
the number of outstanding shares of Common Stock into a greater number of
shares, then, in either of such events, the Purchase Price per share of Common
Stock purchasable pursuant to this Warrant in effect at the time of such action
shall be decreased proportionately and the number of shares purchasable pursuant
to this Warrant shall be increased proportionately. Conversely, in the event the
Company shall reduce the number of shares of its outstanding Common Stock by
combining such shares into a smaller number of shares, then, in such event, the
Purchase Price per share purchasable pursuant to this Warrant in effect at the
time of such action shall be increased proportionately and the number of shares
of Common Stock at that time purchasable pursuant to this Warrant shall be
decreased proportionately. Any dividend paid or distributed on the Common Stock
in shares of any other class of capital stock of the Company or securities
convertible into shares of Common Stock shall be treated as a dividend paid in
Common Stock to the extent that shares of Common Stock are issuable on the
conversion thereof.
(b) In the event, prior to the expiration of this Warrant by
exercise or by its terms, the Company merges or consolidates with or into
another person or entity in which the Company is not the surviving corporation
or entity or sells all or substantially all of its property, or dissolves,
liquidates or winds up its affairs, prompt, proportionate, equitable, lawful and
adequate provision shall be made as part of the terms of any such merger,
consolidation, sale, dissolution, liquidation or winding up such that the Holder
of this Warrant may thereafter receive, on exercise thereof, in lieu of each
share of Common Stock of the Company which the Holder would have been entitled
to receive, the same kind and amount of any shares, securities, or assets as may
be issuable, distributable or payable on any such merger, consolidation, sale,
dissolution, liquidation or winding up with respect to each share of Common
Stock of the Company; provided, however, that, in the event of any such merger,
consolidation, sale, dissolution, liquidation or winding up, the right to
exercise this Warrant shall terminate on a date fixed by the Company, such date
to be not earlier than 5:00 p.m., Pacific Standard Time, on the 30th day next
succeeding the date on which notice of such termination of the right to exercise
this Warrant has been given by mail to the Holder thereof at such address as may
appear on the books of the Company.
(c) Notwithstanding the provisions of this Section 3, no
adjustment of the Purchase Price shall be made whereby such Purchase Price is
adjusted in an amount less than $.001 or until the aggregate of such adjustments
shall equal or exceed $.001.
(d) In the event, prior to the expiration of this Warrant by
exercise or by its terms, the Company shall determine to take a record of the
Holders of its Common
3.
Stock for the purpose of determining the shareholders entitled to receive any
share dividend or other right which will cause any change or adjustment in the
number, amount, price or nature of the shares of Common Stock or other
securities or assets deliverable on exercise of this Warrant pursuant to the
foregoing provisions, the Company shall give to the registered Holder of this
Warrant at the address as may appear on the books of the Company at least 15
days' prior written notice to the effect that the Company intends to take such a
record. Such notice shall specify (i) the date as of which such record is to be
taken, (ii) the purpose for which such record is to be taken, (iii) and the
number, amount, price and nature of the Shares or other shares, securities or
assets which will be deliverable on exercise of this Warrant after the action
for which such record will be taken has been completed. Without limiting the
obligation of the Company to provide notice to the registered Holder of this
Warrant of any corporate action hereunder, the failure of the Company to give
notice shall not invalidate such corporate action of the Company.
(e) Before taking any action which would cause an adjustment
reducing the Purchase Price below the then par value of the shares of Common
Stock issuable upon exercise of this Warrant, the Company will take any
corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable shares of such Common Stock at such adjusted Purchase Price.
(f) Upon any adjustment of the Purchase Price required to be
made pursuant to this Section 3, the Company, within 30 days thereafter, shall
cause to be mailed to the registered Holder of this Warrant written notice of
such adjustment setting forth the Purchase Price in effect after such adjustment
and the number of Shares or other shares, securities or property issuable upon
exercise of this Warrant, and setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
4. Restriction on Transfer.
(a) The Holder, by its acceptance hereof, represents,
warrants, covenants and agrees that:
(i) the Holder has knowledge of the business and
affairs of the Company;
(ii) this Warrant and the Shares issuable upon the
exercise of this Warrant are being acquired for investment and not with a view
to the distribution thereof and that, absent an effective registration statement
under the Securities Act of 1933, as amended (the "Securities Act"), covering
the disposition of the Shares issued or issuable upon exercise of this Warrant,
such Shares will not be sold, transferred, assigned, hypothecated or otherwise
disposed of without first providing the Company with an opinion of counsel
(which may be counsel for the Company) or other evidence, reasonably acceptable
to the Company, to the effect that such sale, transfer, assignment,
hypothecation or other disposal will be exempt from the registration and
prospectus delivery requirements
4.
of the Securities Act and the registration or qualification requirements of any
applicable state or foreign securities laws; and
(iii) the Holder consents to the making of a
notation in the Company's books or giving to any transfer agent of this Warrant
or the Shares an order to implement such restrictions on transferability
described in subparagraph (ii) above.
(b) This Warrant (and any successor or replacement warrant)
shall bear the certificate shown on the front page hereof and the Shares
issuable upon the exercise of this Warrant shall bear the following legend or a
legend of similar import; provided, however, that such legend shall be removed
or not placed upon this Warrant or the certificate or other instrument
representing the Shares, as the case may be, if such legend is no longer
necessary to ensure compliance with the Securities Act:
"THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY
STATE IN RELIANCE UPON THE EXEMPTION UNDER THE SECURITIES ACT AND
EXEMPTIONS FROM REGISTRATION AVAILABLE UNDER THE APPLICABLE SECURITIES
LAWS OF ANY STATE. ACCORDINGLY, SUCH SHARES MAY BE OFFERED AND SOLD
ONLY IF REGISTERED AND QUALIFIED PURSUANT TO RELEVANT PROVISIONS OF
FEDERAL AND STATE SECURITIES LAWS OR IF AN EXEMPTION FROM SUCH
REGISTRATION OR QUALIFICATION IS APPLICABLE."
(c) This Warrant (and any successor or replacement Warrant)
may not be sold, transferred, assigned or hypothecated except to a wholly owned
subsidiary of the Holder or to a parent corporation owning a majority of the
outstanding securities of the Holder or to any successor of the Holder in
connection with a merger, sale or consolidation of the Holder in which the
Holder is not the surviving entity.
5. Payment of Taxes. All Shares issued upon the exercise of this
Warrant shall be validly issued, fully paid and non-assessable and the Company
shall pay all taxes and other governmental charges (other than income tax) that
may be imposed in respect of the issue or delivery thereof. The Company shall
not be required, however, to pay any tax or other charge imposed in connection
with any transfer involved in the issue of any certificate for Shares in any
name other than that of the Holder surrendered in connection with the purchase
of such Shares, and in such case the Company shall not be required to issue or
deliver any stock certificate until such tax or other charge has been paid or it
has been established to the Company's satisfaction that no tax or other charge
is due.
6. Repurchase Right.
(a) Notwithstanding anything herein to the contrary, in the
event the Holder of this Warrant provides notice of the exercise of this Warrant
to the Company with respect to any of the Shares, then, in such event, the
Company shall have the right (the
5.
"Repurchase Right"), at its election, by delivery to the Holder of this Warrant
of written notice of the exercise of the Repurchase Right within thirty (30)
days following the receipt by the Company of the Repurchase Notice (the
"Repurchase Notice"), to repurchase all (but not less than all) of the Shares
issued or to be issued in connection with the exercise of this Warrant from the
Holder or Holders thereof at a purchase price per share of Shares equal to the
Current Market Price (as defined below) per share of Common Stock (the
"Repurchase Price") determined as of the close of business on the date on which
such Shares are to be repurchased as specified by the Company in the Repurchase
Notice (which date shall be not less than five (5) nor more than ten (10) days
from the date of the Repurchase Notice (the "Repurchase Date"). The Repurchase
Price of the Shares to be repurchased by the Company hereunder shall be payable
by the Company to the holder or holders of such Shares in immediately available
funds on the Repurchase Date specified in the Repurchase Notice.
(b) The "Current Market Price" per share of Common Stock
shall be determined as follows:
(i) if there then exists an active public trading market
for the Company's Common Stock, the Current Market Price shall be the
average of the daily market prices of the Common Stock over a period of 20
consecutive trading days prior to the day on which Current Market Price is
being determined. The market price for each such trading day shall be the
average of the closing prices on such day of the Common Stock on all
domestic exchanges on which the Common Stock is then listed, or, if there
shall have been no sales on any such exchange on such day, the average of
the highest bid and lowest asked prices on all such exchanges at the end of
the such day, or, if the Common Stock shall not be so listed, the average
of the representative bid and asked prices at the end of such trading day
as reported by NASDAQ.
(ii) if there then does not exist an active public trading
market or the Common Stock shall not be listed on any domestic exchange or
quoted on NASDAQ, the Current Market Price shall be the Fair Market Value
(as defined below) of the Common Stock based upon the Fair Market Value of
100% of the Company if the Company were sold as a going concern and without
regard to any discount for lack of liquidity or as to whether the Company
is then a public or a private company, or on the basis that the relevant
shares of Common Stock do not constitute a majority or controlling interest
in the Company and assuming the exercise or conversion of all or warrants,
options, convertible securities or other rights to subscribe for or
purchase any shares of Common Stock or convertible securities, all as
determined by an independent financial expert (the "Expert"), which such
Expert shall be mutually agreed upon by the parties. If the parties are
unable to agree on an Expert, then each party shall nominate a nationally
recognized independent investment firm, which such nominees shall mutually
appoint an Expert in their sole discretion. "Fair Market Value" shall mean
the value obtainable upon a sale in an arm's length transaction to an
unaffiliated third party under usual and normal circumstances, with neither
the buyer nor the seller under any compulsion to
6.
act, with equity to both. The determination of the Fair Market Value by the
Expert shall be final, binding, and conclusive on the Company and the
Holder of this Warrant. All costs and expenses of the Expert shall be borne
by the Company.
7. Registration Rights.
(a) Right to Join in Registration. If, at any time prior to
two years after the Expiration Date, the Company proposes to file a Registration
Statement under the Securities Act (other than on Form S-4 or Form S-8, or
similar or replacement forms) seeking registration of any securities of the
Company for sale for cash to the public either for its own account or for the
account of any holder of securities of the Company, the Company shall promptly
notify, in writing, the Holder of its intention to file such Registration
Statement and in addition to, and independent of, the rights afforded by
subsection (b), will afford the Holder the opportunity to request inclusion in
such Registration Statement of all of the Shares issuable upon exercise of this
Warrant. If the Holder desires to join in such Registration Statement, it shall,
within twenty (20) days after the receipt of such notice by the Company, notify
the Company, in writing, of the number of Shares it desires to include in any
such Registration Statement. The Company shall cause to be registered under the
Securities Act all of the Shares that the Holder has requested to be registered
except as provided below.
If the Holder requests inclusion of any Shares in such
Registration Statement and if such public offering is to be underwritten, the
Company will request the underwriters of the offering to purchase and sell such
Shares. The right of the Holder to registration pursuant to this subsection
shall be conditioned upon the Holder's participation in such underwriting and
the inclusion of Shares in the underwriting unless otherwise agreed to by the
Company. If the managing underwriter determines that marketing factors require a
limitation or complete exclusion of the number of shares to be underwritten, the
Company shall so advise the Holder and the other persons distributing their
securities through such underwriting, and (i) Common Stock held (or issuable
upon conversion or exercise of securities held) by any person who does not have
contractual rights of registration shall first be excluded; and (ii) if such
exclusion is not sufficient, Common Stock held (or issuable upon exercise of
securities held) by any person other than the Holder and Shares held by the
Holder shall be excluded to the extent required to permit the number of Shares
held by the Holder and shares of Common Stock held by such other persons that
may be included in the registration and underwriting to be allocated among the
Holder and such other persons in proportion, as nearly as practicable, to the
number of Shares held by the Holder and shares of Common Stock held (or issuable
upon conversion or exercise of securities held) by such other persons at the
time of filing the Registration Statement.
(b) Form S-3 Registration. In case the Company shall
receive, at any time prior to two years after the Expiration Date, from the
Holder a written request that the Company effect a registration of Shares on a
Form S-3 Registration Statement and any related qualification or compliance
with respect to all or a part of the Shares, the Company will:
7.
(i) as soon as practicable, effect such registration
and all such qualifications and compliances as may be so requested and as
would permit or facilitate the sale and distribution of all of such
Holder's Shares as are specified in such request; provided, however, that
the Company shall not be obligated to effect any such registration,
qualification or compliance pursuant to this Section: (i) if Form S-3 is
not available for such offering by the Holder; (ii) if the Company shall
furnish to the Holder a certificate signed by the President of the Company
stating that, in the good faith judgment of the Board of Directors of the
Company, it would be detrimental to the Company and its shareholders for
such Form S-3 registration to be effective at such time, in which event the
Company shall have the right to defer the filing of the Form S-3
Registration Statement for a period of not more than 120 days after
receipt of the request of the Holder under this Section; provided, however,
that the Company shall not utilize this right more than once in any twelve
month period; or (iii) if the Company has, within the twelve (12) month
period preceding the date of such request, already effected one
registration on a Form S-3 Registration Statement for the Holder pursuant
to this Section.
(ii) Subject to the foregoing, the Company shall
file a Form S-3 Registration Statement covering the Shares and other
securities so requested to be registered as soon as practicable after
receipt of the request of the Holder.
(iii) If the Company is unable to effect a
registration pursuant to subsection (i) of this Section 7(b), the Company
shall be obligated, upon 120 days' prior written notice to the Company by
the Holder of this Warrant, to repurchase this Warrant (the "Put Option")
at a purchase price per share of Common Stock issuable upon exercise of the
Warrant equal to the then existing Current Market Price, as determined in
accordance with Section 6(b)(i) and (ii) hereof. Notwithstanding the
foregoing, the Holder of this Warrant shall be entitled to a determination
of the then existing Current Market Price (the "Put Option Price") prior
to an election to exercise its Put Option; provided, however, that the
Holder shall only be entitled to a determination of the Put Option Price
under this Section 7 once during the Term of this Warrant. Nothing herein
shall obligate the Holder of this Warrant to exercise its Put Option.
(c) Indemnification. In the event any Shares are included in
a registration statement under this Section:
(i) To the extent permitted by law, the Company will
indemnify and hold harmless the Holder, any underwriter (as defined in the
Securities Act) for the Holder and each person, if any, who controls the
Holder or underwriter within the meaning of the Securities Act or the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), against
any losses, claims, damages, or liabilities (joint or several) to which
they may become subject under the Securities Act or the Exchange Act or
other federal or state law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon
any of the following statements, omissions or violations (collectively a
"Violation"): (i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, (ii) the omission
8.
or alleged omission to state therein a material fact required to be stated
therein, or necessary to make the statements therein not misleading, or
(iii) any violation or alleged violation by the Company of the Securities
Act, the Exchange Act, any state securities law or any rule or regulation
promulgated under the Securities Act or the Exchange Act or any state
securities law; and the Company will pay to the Holder, underwriter or
controlling person any legal or other expenses reasonably incurred by one
law firm retained by them (or such additional law firms retained by the
Holder if such Holder reasonably believes there exists a conflict of
interest among them) in connection with investigating or defending any such
loss, claim, damage, liability, or action; provided, however, that the
indemnity agreement contained in this subsection shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability, or action
if such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld), nor shall the Company be
liable in any such case for any such loss, claim, damage, liability, or
action to the extent that it arises out of or is based upon a Violation
which occurs in reliance upon and in conformity with written information
furnished expressly for use in connection with such registration by any
such Holder, underwriter or controlling person.
(ii) To the extent permitted by law, the Holder will
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each person, if any,
who controls the Company within the meaning of the Securities Act, any
underwriter, any other investor selling securities in such registration
statement and any controlling person of any such underwriter or other
investor, against any losses, claims, damages, or liabilities (joint or
several) to which any of the foregoing persons may become subject under the
Securities Act or the Exchange Act or other federal or state law, insofar
as such losses, claims, damages, or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by the Holder
expressly for use in connection with such registration; and the Holder will
pay, as incurred, any legal or other expenses reasonably incurred by any
person intended to be indemnified pursuant to this subsection, in
connection with investigating or defending any such loss, claims, damage,
liability, or action; provided, however, that the indemnity agreement
contained in this subsection shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability or action if such settlement is
effected without the consent of the Holder, which consent shall not be
unreasonably withheld; provided, further, however, that in no event shall
any indemnity under this subsection exceed the net proceeds from the
offering received by the Holder.
(iii) Promptly after receipt by an indemnified party
under this Section of notice of the commencement of any action (including
any governmental action), such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying party, provide a
written notice of the commencement thereof to the indemnifying party and
the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that any
indemnified party (together with all other indemnified parties which may be
represented without conflict by one counsel) shall have the right to
9.
retain one separate counsel, with the fees and expenses to be paid by the
indemnifying party, if representation of such indemnified party would be
inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, if prejudicial
to its ability to defend such action, shall relieve such indemnifying party of
any liability to the indemnified party under this Section, but the omission so
to deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Section.
(iv) The obligations of the Company and the Holder
under this Section shall survive the completion of any offering of Shares in a
registration statement under this Section, and otherwise.
(d) Expenses. The Company shall bear all expenses incurred
in connection with all registrations of the Shares effected pursuant to Section
7(a) hereof and in connection with one registration effected pursuant to Section
7(b) hereof, in each case excluding any underwriting discounts or commissions.
8. Reservation of Common Stock. The Company shall at all times
reserve and keep available out of its authorized but unissued shares of Common
Stock, solely for the purpose of issuance upon the exercise of this Warrant,
such number of shares of Common Stock as shall be issuable up on the exercise
hereof. The Company covenants and agrees that, upon exercise of this Warrant and
payment of the Purchase Price thereof pursuant to Section 2(b) hereof, all
Shares of Common Stock issuable upon such exercise shall be duly and validly
issued, fully paid and non-assessable.
9. Rights; Notices. Nothing contained in this Warrant shall be
construed as conferring upon the Holder hereof the right to vote or to consent
or to receive notice as a shareholder in respect of any meetings of shareholders
for the election of directors or any other matter or as having any right
whatsoever as a shareholder of the Company. All notices, requests, consents and
other communications hereunder shall be in writing and shall be deemed to have
been duly made when delivered or mailed by registered or certified mail, postage
prepaid, return receipt requested:
(a) if to the Holder, to the address of such Holder as shown
on the books of the Company; or
(b) if to the Company, to its principal executive office.
10. Replacement of Warrant. Upon receipt of evidence reasonably
satisfactory to the Company of the ownership of and the loss, theft, destruction
or mutilation of this Warrant and (in case of loss, theft or destruction) upon
delivery of an indemnity agreement in an amount reasonably satisfactory to the
Company, or (in the case of mutilation) upon surrender and cancellation of the
mutilated Warrant, the Company will execute and deliver, in lieu thereof, a new
Warrant of like tenor.
10.
11. Successors. All the covenants, agreements, representations
and warranties contained in this Warrant shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, distributees, successors and assigns.
12. Change; Waiver. Neither this Warrant nor any term hereof may
be changed, waived, discharged or terminated orally but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
13. Headings. The section headings in this Warrant are inserted
for purposes of convenience only and shall have no substantive effect.
11.
14. Law Governing. This Warrant shall for all purposes be
construed and enforced in accordance with, and governed by, the internal laws of
the State of California, without giving effect to principles of conflict of
laws.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed by its duly authorized officer and this Warrant to be dated as of the
date first above written.
SHARPER IMAGE CORPORATION
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: President, Chief Administrative Officer
By: /s/ Xxxxx X. Xxx
----------------------------------------------
Name: Xxxxx X. Xxx
Title: Sr. V.P., Chief Financial Officer
ACCEPTED AND AGREED:
CIT GROUP/BUSINESS CREDIT, INC.
/s/ Xxxxxx Xxxxxx
--------------------------------
Name: Xxxxxx Xxxxxx
Title: Assistant Vice President
12.
EXHIBIT A
SUBSCRIPTION FORM
(To be Executed by the Registered Holder
if it Desires to Exercise this Warrant)
To Sharper Image Corporation:
The undersigned hereby irrevocably elects to exercise the right
to purchase ____________ of the Shares covered by this Warrant according to the
conditions hereof and herewith makes payment of the Purchase Price in full in
accordance with Section 2(b) of the Warrant.
The undersigned requests that certificates for such Shares be
issued in the name of:
PLEASE INSERT SOCIAL SECURITY
OR TAX IDENTIFICATION NUMBER:
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(Please print name and address)
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Dated: Signature:
---------------- ---------------------------------------
NOTICE: The above signature must correspond with the name as written
within the Warrant in every particular, without alteration or
enlargement or any change whatsoever, and if the certificate
representing the Shares is to be registered in a name other than
that in which the Warrant is registered, the signature of the
Holder hereof must be guaranteed.
Signature Guaranteed:
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SIGNATURE MUST BE GUARANTEED BY A COMMERCIAL BANK OR MEMBER FIRM OF ONE OF THE
FOLLOWING STOCK EXCHANGES: NEW YORK STOCK EXCHANGE, PACIFIC COAST STOCK
EXCHANGE, AMERICAN STOCK EXCHANGE, OR MIDWEST STOCK EXCHANGE.
