IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA

MIAMI DIVISION

CASE NO.: 05-21251-ALTONAGA/BANDSTRA

MANUEL FIGUEROA, individually and on behalf of those similarly situated,

  Plaintiff,

vs.

SHARPER IMAGE CORPORATION a Delaware corporation, and ZENION INDUSTRIES, INC., a
California corporation,

  Defendants.

SETTLEMENT AGREEMENT AND RELEASE

By And Among

Plaintiffs Manuel Figueroa and Dixie M. Garner, the Settlement Class, and
Defendant Sharper Image Corporation

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SETTLEMENT AGREEMENT AND RELEASE   TABLE OF CONTENTS   1.    Definitions    2 
2.    The Class Action and Settlement Class Covered by This Settlement
Agreement    11  3.    Commitment To Support    12  4.    Conditions of
Settlement, Effect of Disapproval, Cancellation, or Termination    13  5.   
Procedure For Certification and Approving Settlement    15  6.    Procedure For
Final Approval    16  7.    Notice To Class    19  8.    Settlement Benefits   
20  9.    Cost of Notice and Additional Expenses    23  10.         Attorneys’
Fees, Class Representative Fees, And Litigation Costs And Expenses    24  11.   
     Opt-Out Rights    25  12.         Claims Procedure    26  13.       
 Claims Administration    26  14.         Agreement Not to Disparage Ionic
Breeze® Products    30  15.         Release    31  16.         Other Pending
Actions    33  17.         Final Approval of This Agreement    34  18.       
 Final Judgment    34  19.         Effect of Failure of Court To Approve    34 
20.         Successors & Assigns    35  21.         Entire Agreement    35  22. 
       Exhibits    36  23.         No Presumption Against Drafter    36  24.   
     Governing Law    36  25.         Continuing Jurisdiction and Exclusive
Venue    36  26.         Authority    38  27.         Currency Dates & Times   
38  28.         Notices    38  29.         Preliminary Injunction and Stays of
Other Actions    39  30.         Permanent Injunction as Part of Final Judgment 
  40  31.         Order of Dismissal With Prejudice of Other Pending Actions   
41  32.         Stay    41  33.         Additional Terms    42  34.       
 Counterparts    43 

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     THIS SETTLEMENT AGREEMENT AND RELEASE (“Settlement Agreement”) is
conditionally made effective upon Preliminary Settlement Approval by the Court
(as provided in § 5.1), by and among defendant Sharper Image Corporation
(“Sharper Image” or “Settling Defendant”) and plaintiff Manuel Figueroa and
Dixie M. Garner (“Plaintiffs” or “Settlement Class Representatives”) and the
Settlement Class (as defined in § 2.2 ), and becomes unconditionally effective
when the Final Order and Final Judgment become Final as defined herein.

     WHEREAS, Sharper Image denies and has asserted a number of defenses to each
and every one of the allegations in the above-captioned litigation (the “Class
Action”) regarding the efficacy of the Ionic Breeze® products. Sharper Image
stands behind the Ionic Breeze® and contends that scientific testing has
demonstrated the high quality, efficacy, and safety of the Ionic Breeze®, but,
regardless of the merits of this Class Action, the outcome of any litigation is
always inherently uncertain; therefore, Sharper Image has concluded that it is
in the best interest of Sharper Image, its shareholders, and its customers to
settle this Class Action.

     WHEREAS, Plaintiffs equally believe in the allegations and assertions made
in their Complaint and the merits of this Class Action, but also believe that
settlement is in the best interest of the Settlement Class Members; WHEREAS,
Plaintiffs, Settlement Class, and Settling Defendant agree that this Settlement
Agreement, and any papers filed or prepared in connection with this Settlement
Agreement, shall not be deemed or construed to be an admission or evidence of
any violation of any statute or law or of any liability or wrongdoing by
Settling Defendant or of the truth of any of the claims or allegations made in
this Class Action or otherwise; WHEREAS, arm’s length settlement negotiations
have taken place between Plaintiffs, Settlement Class Counsel (as defined in §
1.46), Settling Defendant’s Counsel, and the Settling Defendant; WHEREAS, as a
product of those negotiations, this Settlement Agreement, including its
exhibits, which embodies all of the terms and conditions of the settlement
between the Settling 1

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Defendant and the Plaintiffs, both individually and on behalf of the Settlement
Class, has been reached, subject to the final approval of the United States
District Court for the Southern District of Florida (the “Court”); WHEREAS,
Settlement Class Counsel and the Plaintiffs have concluded, after due
investigation and after carefully considering the relevant circumstances of the
Settling Defendant, the Class Action, and the applicable law, that it would be
in the best interest of the Settlement Class to enter into this Settlement
Agreement in order to avoid the uncertainties of litigation and to assure that
the benefits reflected herein are obtained for the Settlement Class, and
further, that Settlement Class Counsel and the Plaintiffs consider the
settlement set forth herein to be fair, reasonable, adequate, and in the best
interests of the Settlement Class; WHEREAS, the Settling Defendant, without
admitting any liability or wrongdoing, has concluded, despite its belief that it
is not liable for the claims asserted and has good defenses thereto, that it
will enter into this Settlement Agreement solely to avoid the further expense,
inconvenience, and burden of this protracted and complex litigation, the risks
inherent in uncertain complex litigation, and the distraction and diversion of
its personnel and resources, and thereby put to rest this controversy; and NOW
THEREFORE, it is agreed by and among the undersigned, on behalf of the Settling
Defendant, the Plaintiffs, and the Settlement Class, that this Class Action be
conditionally settled, compromised, and dismissed in its entirety with
prejudice, subject to the approval of the Court, on the following terms and
conditions:

1.      Definitions.     1.1 “Agreement” and “Settlement Agreement” both mean
this agreement by and  

among Defendant Sharper Image, Plaintiffs Manuel Figueroa and Dixie M. Garner,
and the Settlement Class, as defined in § 2.2 of this Settlement Agreement.

     1.2 “Claim Form” means the form to be used by Settlement Class Members, who
do not process their claim on the Claims Web Site, to manually make a claim
under this Settlement Agreement in substantially the same form as Exhibit F
hereto.

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     1.3 “Claims Administration” means the process by which this Settlement
Agreement is administered pursuant to § 13.

     1.4 “Claims Administrator” means the person or entity appointed by the
Court to administer this Settlement Agreement pursuant to § 13.1.

     1.5 “Claims Web Site” means the web site administered jointly by the Claims
Administrator and Settling Defendant located at “www.ibsettlement.com”. The
Claims Web Site will enable Settlement Class Members who are contained in the
Ionic Breeze Database to process their claims, execute an electronic release,
and obtain their Merchandise Credit Confirmation Number. Settlement Class
Members who are not in the Ionic Breeze® Database will be able to obtain a Claim
Form on the Claims Web Site that they can submit with proof of purchase to the
Claims Administrator to apply for a Merchandise Credit. Settlement Class Members
will be required to use the Claims Web Site for processing their claims or
obtaining a Claim Form, except for those Settlement Class Members that do not
have reasonable access to the Internet. Notice of Final Approval will be made to
those Settlement Class Members who process their claims on the Claims Web Site
by publication on the Claims Website. Settlement Class Members, at the time that
they obtain their Merchandise Credit Confirmation Number, will be told to check
back within a certain period of time to find out (1) whether the Court has
approved the settlement; (2) that they now have a valid Merchandise Credit; and
(3) the expiration date of the Merchandise Credit.

1.6      “Class Action” means the above-captioned litigation.   1.7      “Class
Notice” means the Court approved form of notice of the conditional  

certification of the Settlement Class and notice of Fairness Hearing to the
Putative Class Members, which shall be in substantially the same form as Exhibit
D hereto.

     1.8 “Closing Date” means the date so designated on Exhibit A that is
attached hereto and incorporated herein by reference, or such other date as may
be set by the Court for the doing or completion of the acts required to be
completed by said date, as contemplated by this Agreement when using said
defined term. If the Court sets a date or deadline for doing or 3

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completing such acts other than the date designated on Exhibit A, then this
defined term shall mean the date set by the Court rather than the date
designated on Exhibit A.

     1.9 “Confirmatory Discovery” shall mean that discovery to be concluded by
Settlement Class Counsel to perform their due diligence with respect to the
fairness and appropriateness of the terms of the Settlement Agreement to the
Putative Class Members and the Settlement Class Members in relation to the
factual basis for the lawsuit; 1.10 “Court” means the United States District
Court for the Southern District of Florida, Miami Division.

     1.11 “Customer Number” means the Sharper Image customer number that will be
used to assist Sharper Image in identifying Putative Class Members in the Ionic
Breeze® Database.

     1.12 “Effective Date of Settlement” means the date so designated on Exhibit
A that is attached hereto and incorporated herein by reference, or such other
date as may be set by the Court for the doing or completion of the acts required
to be completed by said date, as contemplated by this Agreement when using said
defined term. If the Court sets a date or deadline for doing or completing such
acts other than the date designated on Exhibit A, then this defined term shall
mean the date set by the Court rather than the date designated on Exhibit A.

     1.13 “Execution Date of The Settlement Agreement” means the date upon which
the last of all parties and counsel listed as signatories on the Settlement
Agreement have executed it.

     1.14 “Fairness Hearing” means the hearing at which the Court will consider
and finally decide whether to certify the Settlement Class, approve this
Settlement Agreement, approve payment of fees and expenses, enter the Final
Order and Final Judgment, and make such other final rulings as are contemplated
by this Settlement Agreement or are otherwise necessary to effectuate this
Settlement.

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     1.15 “Fairness Hearing Date” means the date so designated on Exhibit A that
is attached hereto and incorporated herein by reference, or such other date as
may be set by the Court for the doing or completion of the acts required to be
completed by said date, as contemplated by this Settlement Agreement when using
said defined term. If the Court sets a date or deadline for doing or completing
such acts other than the date designated on Exhibit A, then this defined term
shall mean the date set by the Court rather than the date designated on Exhibit
A.

     1.16 “Final” means the time when the Final Order and Final Judgment
represent a final and binding judgment with respect to the this Class Action,
which shall take place upon the occurrence of any of the following: (i) the date
of final affirmance on an appeal (without any material modification or reversal
of the Final Order and/or Final Judgment), or the date of affirmance by means of
a writ or other proceeding (without any material modification or reversal of the
Final Order and/or Final Judgment), and the expiration of the time for a
petition for or a denial of a writ of certiorari to review such orders, or, if
certiorari is granted, the date of final affirmance (without any material
modification or reversal of the Final Order and/or Final Judgment) following
review pursuant to that grant; or (ii) the date of final dismissal of any appeal
from the final dismissal of any proceeding on certiorari to review the Final
Order and/or Final Judgment; or (iii) if no appeal is filed, the expiration date
of the time for the filing or noticing of any appeal or filing or initiating any
other appellate proceeding challenging the Court’s Final Order and/or Final
Judgment, i.e., expected to be thirty (30) days after entry of the Final Order
and Final Judgment (or the expiration of any extension of time for the filing of
any appeal or other appellate proceeding as may result from operation of law or
order of the Court).

     1.17 “Final Claims Bar Date” means the date so designated on Exhibit A that
is attached hereto and incorporated herein by reference, or such other date as
may be set by the Court for the doing or completion of the acts required to be
completed by said date, as contemplated by this Settlement Agreement when using
said defined term. If the Court sets a

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date or deadline for doing or completing such acts other than the date
designated on Exhibit A, then this defined term shall mean the date set by the
Court rather than the date designated on Exhibit A.

     1.18 “Final Judgment” means the final judgment and order of dismissal with
prejudice, which certifies the Settlement Class, approves this Settlement
Agreement, approves payment of attorneys’ fees and expenses, dismisses the Class
Action with prejudice, enters a permanent injunction against other actions, and
makes such other final rulings as are contemplated by this Settlement Agreement,
and which is entered in conjunction with the Final Order. It is an express
condition of this Settlement that the Final Judgment be substantially in the
form attached as Exhibit C, with such additional orders as may be determined by
the Court as to only those matters that this Settlement Agreement leaves to the
determination of the Court or as are necessary to effectuate this settlement.

     1.19 “Final Order” means the final Order by which the Court approves this
Settlement Agreement.

     1.20 “Household” refers to the street address at which a Purchaser
registers as his/her/its address and all other places in which that Person has
resided for more than thirty

(30)      days in any calendar year since May 6, 1999.     1.21 “Hybrid” refers
to the Sharper Image Hybrid Air Purifier, including the  

following model: SI724 Hybrid, and other models to be developed under the Hybrid
name. 1.22 “Ionic Breeze®” or “Ionic Breeze” means the Sharper Image branded
Ionic Breeze® Silent Air Purifiers identified as the following models: SI737 -
Professional Series™ Ionic Breeze® Quadra®; SI830 - Professional Series™ Ionic
Breeze GP®; SI397 - Ionic Breeze® 3.0; SI637 - Ionic Breeze® Quadra®; SI697 -
Ionic Breeze® Quadra® Compact; SI730 - Ionic Breeze GP®; SI720 - Ionic Breeze
GP® Desktop; SI853 Professional Series™ Plus Midi; SI719 Professional Series™
Plus Tabletop; SI867 Professional Series™ Plus Quadra®; SI871 Professional
Series™ Plus GP; SI620 Compact Ionic Breeze®; SI624 Ionic Breeze® – 2.0; SI626 –
Ionic Breeze® Night Light; SI589 – Ionic Breeze® cat litter box; 6

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SI633 – Ionic Breeze® car air purifier; SI717 – Ionic Breeze® small
spaces/bathrooms – plug-in; SI627 – Ionic Breeze® plug-in; S1628 – Ionic Breeze®
plug-in; SI629 – Ionic Breeze® dashboard ionizer; SI861 – Ionic Breeze® GP
Professional Series™ with OzoneGuard; SI837 – Ionic Breeze® Quadra® with
OzoneGuard; SI857 – Ionic Breeze® Quadra® Professional Series™ with Ozoneguard;
SI827 – Compact Ionic Breeze® Quadra® with Ozoneguard; SI037

–      Ionic Breeze® Quadra® Professional Series™ with Ozoneguard QVC.     1.23
“Ionic Breeze® Database” means the database to be compiled by Settling  

Defendant, which includes information on Purchasers who Purchased an Ionic
Breeze® directly from Sharper Image, and includes information on Purchasers that
Settling Defendant is able to obtain from third-party retailers.

1.24      “Merchandise Credit”     1.24.1 “Merchandise Credit” means the credit
given to Settlement Class  

Members that are redeemable only for Sharper Image Branded Products to which
Settlement Class Members are entitled as provided in § 8.

     1.24.2 Merchandise Credits can only be redeemed from (1) Sharper Image
retail stores in the United States; (2) Sharper Image’s online store at
www.sharperimage.com; or (3) by phone or mail order directly from Sharper Image.

     1.25 “Merchandise Credit Confirmation Number” means the number used to
track those Settlement Class Members who have qualified for a Merchandise
Credit.

     1.26 “Notice” or “Notices” means the manner in which the Class Notice,
Summary Notice of Settlement, and Notice of Final Approval are given and
published as provided in § 7.

     1.27 “Notice Date” means the date so designated on Exhibit A that is
attached hereto and incorporated herein by reference, or such other date as may
be set by the Court for the doing or completion of the acts required to be
completed by said date, as contemplated by this Settlement Agreement when using
said defined term. If the Court sets a date or deadline for doing or completing
such acts other than the date designated on Exhibit A, then this defined term
shall mean the date set by the Court rather than the date designated on Exhibit
A.

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     1.28 “Notice of Final Approval” means the form of notice to be provided to
Settlement Class Members that the Court has finally approved this Settlement
Agreement, in a form to be submitted by the parties and determined and approved
by the Court.

     1.29 “Objection Date” means the date so designated on Exhibit A that is
attached hereto and incorporated herein by reference, or such other date as may
be set by the Court for the doing or completion of the acts required to be
completed by said date, as contemplated by this Settlement Agreement when using
said defined term. If the Court sets a date or deadline for doing or completing
such acts other than the date designated on Exhibit A, then this defined term
shall mean the date set by the Court rather than the date designated on Exhibit
A.

     1.30 “Opt-Out Deadline” means the date so designated on Exhibit A that is
attached hereto and incorporated herein by reference, or such other date as may
be set by the Court for the doing or completion of the acts required to be
completed by said date, as contemplated by this Settlement Agreement when using
said defined term. If the Court sets a date or deadline for doing or completing
such acts other than the date designated on Exhibit A, then this defined term
shall mean the date set by the Court rather than the date designated on Exhibit
A.

     1.31 “Opt-Out Form(s)” means the written communication that must be
provided by Putative Class Members to exclude themselves from the Settlement
Class.

     1.32 “Person” and “Persons” mean all persons and entities (including but
not limited to natural persons, individuals, corporations, agencies, bodies,
governments, associations, partnerships, trusts, and their predecessors,
successors, administrators, heirs and assigns).

     1.33 “Plaintiffs” means Manuel Figueroa and Dixie M. Garner, proposed
Settlement Class Representatives.

     1.34 “Preliminary Settlement Approval” and “Preliminary Settlement Approval
Order” both mean the Order that the Court enters as provided in § 5.1, in
substantially the same form as Exhibit B hereto.

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     1.35 “Preliminary Settlement Approval Hearing” means the hearing set by the
Court to preliminarily approve this Settlement Agreement and conditionally
certify a provisional Settlement Class.

     1.36 “Preliminary Settlement Approval Hearing Date” means the date so
designated on Exhibit A that is attached hereto and incorporated herein by
reference, or such other date as may be set by the Court for the doing or
completion of the acts required to be completed by said date, as contemplated by
this Settlement Agreement when using said defined term. If the Court sets a date
or deadline for doing or completing such acts other than the date designated on
Exhibit A, then this defined term shall mean the date set by the Court rather
than the date designated on Exhibit A.

     1.37 “Product Identification Documentation” means the documentation with
respect to claims that is required by § 13 and the Claim Form.

     1.38 “Proof of Purchase” means the documentation required by the Claim Form
with respect to purchases not confirmed by the Ionic Breeze® Database. Proof of
Purchase will constitute any one or more of the following evidencing the
purchase of an Ionic Breeze®: a copy of a receipt; a cancelled check; a bank
copy or bank generated record of a negotiated check; a credit card bill or
receipt.

     1.39 “Purchaser(s)” means any and all Persons who Purchased in or from a
location in the United States of America an Ionic Breeze® from any source
between May 6, 1999 and the Execution Date of The Settlement Agreement.
Purchasers will not include those who have sold and/or returned all of their
Purchased Ionic Breeze(s)®, unless at least one unit was returned in exchange
for another Ionic Breeze®. Class Members may not separate Purchases within
Households in order to create a right to additional recovery.

     1.40 “Purchased” means paid monetary consideration for the Ionic Breeze®,
subject to the qualifications in § 1.39.

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     1.41 “Putative Class Member(s)” means all Persons who are within the scope
of the definition of “Settlement Class,” including those who validly and timely
request exclusion from the Settlement Class, as provided in this Settlement
Agreement.

     1.42 “Released Parties” means those Persons released under § 15 and more
particularly defined therein.

     1.43 “Released Rights” or “Released Claims” means any and all manner(s) of
claims, demands, actions, suits, and causes of action released under § 15.

     1.44 “Settlement Agreement” and “Agreement” both mean this agreement by and
among Defendant Sharper Image, Plaintiffs Manuel Figueroa and Dixie M. Garner,
and the Settlement Class, as defined in § 2.2 of this Settlement Agreement.

     1.45 “Settlement Class” is the FRCP 23 class covered by this Settlement
Agreement, as defined in § 2.2 of this Settlement Agreement.

     1.46 “Settlement Class Counsel” means Lightfoot Franklin & White LLC, and
Haggard, Parks, Haggard & Lewis, P.A., and their respective attorneys.

     1.47 “Settlement Class Members” means all Purchasers who are within the
scope of the definition of the “Settlement Class” and who do not validly and
timely requested exclusion from the Settlement Class, as provided in this
Settlement Agreement.

     1.48 “Settlement Class Representatives” means Manuel Figueroa and Dixie M.
Garner and/or such other person(s) as the Court may appoint as representatives
of the Settlement Class.

     1.49 “Settling Defendant” means Sharper Image Corporation, the Defendant in
this Class Action.

     1.50 “Settling Defendant’s Counsel” means Thelen Reid Brown Raysman &
Steiner LLP fka Thelen Reid & Priest LLP and its attorneys, and Lowndes,
Drosdick, Doster, Kantor

 * Reed, P.A. and its attorneys.
   1.51 “Settlement Packages” means the consideration afforded the Settlement
   Class

Members under § 8.

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     1.52 “Sharper Image” or “Sharper Image Corporation” means the Sharper Image
Corporation, the defendant in this Class Action, which is also defined above as
“Settling Defendant.” 1.53 “Sharper Image Branded Product” means a product sold
by Sharper Image that has the trademark Sharper Image® or Sharper Image Design®
displayed on the product or box. A product shall not be deemed a Sharper Image
Branded Product solely as a result of such product being sold or offered for
sale using promotional or advertising materials prepared by Settling Defendant
or promotional or advertising materials using the Sharper Image® or Sharper
Image Design® trademark.

     1.54 “Summary Notice of Settlement” means the Court approved form of notice
of the conditional certification of the Settlement Class and notice of Fairness
Hearing to the Putative Class Members, which shall be in substantially the same
form as Exhibit E hereto.

1.55 “Zenion” refers to Zenion Industries, Inc., former named defendant in this
Class

  Action.

2.      The Class Action and Settlement Class Covered by This Settlement
Agreement 2.1 This Settlement Agreement governs, within the scope of its subject
matter, the  

Settling Defendant, Settling Defendant’s Counsel, Settlement Class Counsel,
Putative Class Members, and those purporting to act on behalf of any Putative
Class Member.

     2.2 The “Settlement Class” is defined and composed of any and all Persons
who Purchased in or from a location in the United States of America an Ionic
Breeze® from any source between May 6, 1999, and the Execution date of The
Settlement Agreement. The Settlement Class does not include any Person who sold
and/or returned all of their Purchased Ionic Breeze(s)®, unless at least one
unit was returned in exchange for another Ionic Breeze®. The Settlement Class
does not include Settling Defendant, Zenion Industries, Inc., or those who
timely and properly opted-out of this Agreement. The Settlement Class may not
separate purchases within Households in order to create a right to additional
recovery.

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3.      Commitment To Support.     3.1      Plaintiffs, the Settling Defendant,
Settlement Class Counsel, and Settling     Defendant’s Counsel agree to
recommend approval of and vigorously support this Settlement Agreement to the
Court and to the Putative Class Members and to undertake reasonable steps and
efforts contemplated by this Settlement Agreement and any other reasonable steps
and efforts that may be necessary or appropriate, by order of the Court or
otherwise, to carry out the terms of this Settlement Agreement. The parties to
this Class Action shall aggressively cooperate, assist, and undertake all
reasonable actions in order to accomplish the above on a timely basis in
accordance with Exhibit A hereto. Settlement Class Members, Plaintiffs, and
Settlement Class Counsel expressly concur and agree that Settling Defendant is
entitled to communicate with the Putative Class Members, except as it relates to
this Class Action (other than as provided in this Agreement). Settling Defendant
will not aid or encourage any objections to this Settlement Agreement (or any of
its terms or provisions) nor to final certification of the Settlement Class, nor
encourage any Putative Class Members to elect to opt out.     3.2      The
Settlement Class Counsel shall make every reasonable effort to encourage    
Putative Class Members to participate and not to opt out. In addition, the
parties shall make all reasonable efforts to enforce the jurisdictional and
injunctive provisions of this Settlement Agreement, including assisting and
joining in any motions or stipulations that may be necessary to stay current or
future-filed actions that may come within the scope of this Agreement.     3.3 
    The failure of either party to cooperate and assist with regard to
settlement as     expressly and implicitly contemplated in this Agreement shall
constitute a material breach of this Agreement.     3.4      No material
modifications to the Final Judgment, Exhibit C, shall be permitted     unless
approved expressly in writing by the parties. If the Court materially modifies
Exhibit C,  

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such modifications shall give either party the right to terminate this
Settlement Agreement and render this Class Action as if the Settlement Agreement
had never been executed.

4.      Conditions of Settlement, Effect of Disapproval, Cancellation, or
Termination     4.1 This Settlement Agreement shall be conditioned on the
occurrence of all of the  

following events:      4.1.1    The Court has entered the Final Order;  4.1.2   
The Court has entered the Final Judgment, Exhibit C, without material 
modifications;      4.1.3    The Final Order and Final Judgment have become
Final; and  4.1.4    Neither Settling Defendant nor Plaintiffs have elected to
terminate this 

Settlement Agreement in accordance with the terms of this Agreement.

     4.2 If all of the conditions specified in Paragraph 4.1 are not met, then
the Settlement Agreement will be subject to termination in accordance with the
terms of this Settlement Agreement.

     4.3 Settling Defendant reserves the right to terminate the Settlement
Agreement if the Preliminary Settlement Approval Hearing does not take place by
March 1, 2007, or the Court has not otherwise entered the Preliminary Settlement
Approval Order prior to March 1, 2007. Further, Settling Defendant reserves the
right to terminate the Settlement Agreement if Preliminary Settlement Approval
and the Final Judgment do not include the issuance of an injunction(s) that
effectively enjoins the prosecution of all pending litigation against Settling
Defendant and those Persons listed in the release at § 15, or each of them,
involving claims related the Ionic Breeze®, including, but not limited to, any
and all claims related in any way to the efficacy, advertisements, emissions or
reactions (e.g. ozone, terpenes and reactions with terpenes, or any other type
of reaction related to the operation of the Ionic Breeze®), volatile organic
compounds, ultrafine particles, health risks, and/or performance of the Ionic
Breeze®, including but not limited to, claims for alleged false advertising,
breach of express and/or implied warranties, unjust enrichment, Magnuson-Moss
Warranty Act, conspiracy, unfair 13

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competition, state consumer protection statutes, common law prohibiting unfair
or deceptive trade practices, breach of contract, fraud, and/or
misrepresentation and equity prohibiting unjust enrichment or requiring
restitution or disgorgement; and that are, were, or could have arisen out of or
been related in any way to Settling Defendant’s advertising or sale of the Ionic
Breeze® and the disclosures relating thereto, which actions include but are not
limited to,

Potter and Rittenhouse v. Sharper Image, Cox v. Sharper Image, Robertson v.
Sharper Image

(all currently pending in the Superior Court of California, in and for the
County of San Francisco), and Bryant v. Sharper Image (pending in the Circuit
Court for the State of Florida, County of Duval), including the successful
defeat of all challenges to any such injunctions. Settling Defendant further
reserves the right to terminate this Settlement Agreement if the Final Judgment
does not include a permanent injunction in conformance with the above and does
not include an order requiring the dismissal with prejudice of the above
actions.

     4.4 Plaintiffs reserve the right to terminate the Settlement Agreement if,
in the course of Confirmatory Discovery, Settlement Class Counsel obtains
information that they did not previously know or have reason to know, and such
information relates directly to and would have materially and substantially
improved Plaintiffs’ likelihood of prevailing in this Class Action if it had
continued.

     4.5 The Settling Defendant and Plaintiffs do not agree to the conditional
certification of the Settlement Class, the conditional appointment of Settlement
Class Counsel, or the conditional appointment of Settlement Class
Representatives for any purpose other than to effectuate this Settlement
Agreement. If this Settlement Agreement is terminated pursuant to its terms, or
if the Effective Date of Settlement does not occur for any reason, then the
conditional certification of the Settlement Class and the appointment of the
Settlement Class Representatives and Settlement Class Counsel shall be vacated,
and the Class Action shall proceed as though the Settlement Class had never been
certified and this Agreement has not been negotiated or entered into, the
appointments had not been made, and nothing done with regard to this Settlement
Agreement and any papers filed in support thereof shall be deemed an 14

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admission by Sharper Image, and in such event will also be without prejudice to
Plaintiffs’ right to file a motion to certify a class or classes and seek the
appointment of settlement class representatives and settlement class counsel.

5.      Procedure For Certification and Approving Settlement. 5.1 Preliminary
Settlement Approval.     As soon as is possible after execution of this
Settlement Agreement and in all events no  

later than January 16, 2007, the parties shall submit to the Court: a motion for
preliminary approval of this Settlement Agreement, for conditional certification
of the Settlement Class, for conditional appointment of Settlement Class
Counsel, and for conditional appointment of Settlement Class Representative(s);
a motion and order to protect the jurisdiction of the Court; the draft of
proposed form of Preliminary Settlement Approval; the draft of proposed form of
Final Judgment; and proposed stay of all proceedings in the Class Action against
all Putative Class Members, Settlement Class Members, Plaintiffs, Settlement
Class Counsel, and Settling Defendant, until the Final Order and Final Judgment
have been entered. The hearing on the preliminary approval of the settlement,
conditional certification of the Settlement Class, conditional appointment of
Settlement Class Counsel, and conditional appointment of Settlement Class
Representatives shall be decided in the Order on Preliminary Settlement Approval
Order. The parties agree to move the Court to enter the Preliminary Settlement
Approval Order without a hearing or to set the Preliminary Settlement Approval
Hearing on the date stated on Exhibit A.

5.2      Forms and Notice Approval.     5.2.1 Along with the Motion for
Preliminary Settlement Approval, the parties  

will also submit to the Court for its approval mutually agreeable forms of the
Claim Form, Class Notice, and Summary Notice of Settlement. Sharper Image will
mail and publish the Notices on the date stated on Exhibit A by mailing the
Class Notice as an affixed inclusion in the Sharper Image catalog (to be
selected by Sharper Image) to each Putative Class Member contained in the Ionic
Breeze® Database, by mailing the Class Notice to each Putative Class Member who
is contained in the Ionic Breeze® Database to whom a catalog is not mailed, and
by publishing the 15

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Summary Notice of Settlement in a manner to be agreed by and between Settlement
Class Counsel and Settling Defendant’s Counsel, at a cost not to exceed
$200,000.00.

     5.2.2 The Court’s approval or determination of said forms and notices shall
be determined as part of the Preliminary Settlement Approval.

5.3 Confirmatory Discovery.

     Settlement Class Counsel already have propounded discovery, reviewed
documents provided by Settling Defendant, deposed representatives of Settling
Defendant, engaged in expert discovery, and retained experts. In addition,
Settlement Class Representatives will have 60 days in which to conduct
confirmatory discovery. Settling Defendant will provide Settlement Class Counsel
with confirmatory discovery, including producing documents, and making corporate
representatives available for deposition or interviews, and documentation upon
request, on issues, including, but not limited to, the following: (1) efficacy;
(2) ozone emission; and (3) recordkeeping relating to tracking of Purchasers.
Settlement of this Class Action is contingent upon Settlement Class
Representatives’ confirmation through this discovery of material factual
representations made by Settling Defendant during settlement negotiations and
completion of Confirmatory Discovery, subject to § 4.4 of this Agreement.

6.      Procedure For Final Approval. 6.1 Overview.     As provided above, the
parties contemplate that this Settlement Agreement shall be  

presented to the Court for Preliminary Settlement Approval. Settlement Class
Members shall have until the Objection Date to file, in the manner specified in
the Class Notice, any objection or other response to the proposed Settlement
Agreement. The parties agree to urge the Court to set the Objection Date as
stated on Exhibit A. The Class Notice and Summary Notice of Settlement also
shall provide that Putative Class Members may request exclusion from the
Settlement Class by providing notice, in the manner specified in the Class
Notice on or before a date set by the Court as the Opt-Out Deadline, and as more
particularly provided in § 11. The parties agree to urge the Court to set the
Opt-Out Deadline as stated on Exhibit A.

16

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6.2      Opt-Outs.     6.2.1 As more particularly provided in § 11, Putative
Class Members shall be  

required to elect to opt out on or before the Opt-Out Deadline by placing the
completed Opt-Out Form in the mail to the Claims Administrator.

     6.2.2 The parties will move that the Court enter an order requiring that
the Opt-Out Form require that the Putative Class Member provide: (1) the
Person’s name, address, and telephone number; and (2) a statement or
acknowledgment that the Person wishes to be excluded from the Settlement Class.
Any Putative Class Member who does not timely and validly request exclusion from
the Settlement Class in the manner required by the Settlement Agreement and
Notices shall be bound by all the terms of the Settlement Agreement.

6.3      Filing Objections Before The Fairness Hearing.     6.3.1 The parties
will move that the Court enter an order requiring any  

Settlement Class Member who wishes to be heard orally at the Fairness Hearing or
who wishes for any objection to be considered to file a written notice of
objection with the Court, including: 6.3.1.1 A statement of each objection
asserted; 6.3.1.2 A detailed description of the facts underlying each objection;
6.3.1.3 A detailed description of the legal authorities supporting each

objection;

     6.3.1.4 A statement of whether the objector intends to appear and argue at
the Fairness Hearing and, if so, how long the objector anticipates needing to
present the objection; 6.3.1.5 A list of witnesses whom the objector may call by
live testimony, oral deposition testimony, or affidavit during the Fairness
Hearing; 6.3.1.6 A list of the exhibits and documents that the objector will
offer during the Fairness Hearing, along with copies of such exhibits and
documents; 6.3.1.7 The name and contact information, if any, of counsel for the

objector; and

17

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     6.3.1.8 A detailed statement of any personal or financial interest of the
objector or his/her counsel in the outcome of this Class Action, determination
of the objection, Preliminary Settlement Approval, the Final Order, or Final
Judgment.

     6.3.2 The parties will further move that the Court enter an order requiring
that all Settlement Class Member objectors file such notice of objection or
request to be heard with the Clerk of the Court, and serve such notice of
objection or request to be heard upon Settlement Class Counsel and Settling
Defendant’s Counsel, at the addresses set forth in § 28, no later than the
Objection Date. The parties will further move that the Court enter an order to
the effect that: objectors who fail to properly or timely file their objections
with the Court or to serve them as provided above shall not be heard during the
Fairness Hearing; nor shall their objections be considered by the Court; only
Settlement Class Members may object to the Settlement Agreement; and Persons who
opt out of the Settlement Class may not object to the Settlement Agreement or
intervene in this Class Action.

6.4 Setting the Fairness Hearing and Related Proceedings.

     A Fairness Hearing Date shall be set by the Court for a date convenient to
the Court and which comports with applicable law and due process requirements.
The parties agree to urge approval so as to allow final approval by the Fairness
Hearing Date stated on Exhibit A and agree to move the Court to set the Fairness
Hearing Date on the date stated in Exhibit A. The parties agree to work together
to identify and submit any evidence as may be required to satisfy the burden of
proof for obtaining approval of this Settlement Agreement. The stay of
proceedings shall not prevent the Confirmatory Discovery, filing of any motions,
affidavits, and other matters necessary to the approval of this Settlement
Agreement. The parties agree to move the Court to enter an order to the effect
that should any Person desire any discovery incident to (or which the Person
contends is necessary to) the approval of this Settlement Agreement in addition
to the Confirmatory Discovery set forth herein, the Person must first obtain an
order from the Court that permits such discovery absent express written
agreement by Settlement Class Counsel and the Settling Defendant’s Counsel.

18

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7.      Notice To Class.     7.1 Preliminary Notice.     Upon preliminary
approval by the Court of this Settlement Agreement and conditional  

certification of the Settlement Class and approval of the forms and notices
contemplated by

§ 5.2, Settling Defendant will provide (with oversight by Settlement Class
Counsel and Settling Defendant’s Counsel and cost borne by Settling Defendant)
Putative Class Members who are identifiable by the Ionic Breeze® Database with
the Class Notice in the Sharper Image catalog. Those Putative Class Members who
have chosen not to get the Sharper Image catalog but are contained within the
Ionic Breeze® Database will get individualized notice by mail. Those Putative
Class Members who are not found in the Ionic Breeze® Database will receive
Summary Notice of Settlement by publication. The parties agree to urge the Court
to set the Notice Date as set forth on Exhibit A.

     7.1.1 At least (10) court days prior to the Fairness Hearing, Sharper Image
shall submit to the Court a sworn Declaration that the mailing and publication
of the Class Notices has occurred in accordance with the provisions of this
Agreement.

7.2 Final Notice.

     Ten (10) court days before the Fairness Hearing the parties will submit an
agreed (or if they cannot agree, their respective proposed) Notice of Final
Approval. If the Court finally approves this Settlement Agreement, the Court
shall approve and determine the form of the Notice of Final Approval. After the
Effective Date of Settlement, Settlement Class Counsel and Settling Defendant’s
Counsel shall cause Settling Defendant to provide (with oversight by Settlement
Class Counsel and Settling Defendant’s Counsel) Settlement Class Members who
registered claims on the Claims Web Site with Notice of Final Approval on the
Claims Web Site. Settlement Class Members, at the time that they obtain their
Merchandise Credit Confirmation Number, will be told to check back within a
certain period of time to find out (1) whether the Court has approved the
settlement; (2) that they now have a valid Merchandise Credit; and (3) the
expiration date of the Merchandise Credit. Individualized notice of the Notice
of Final

19

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Approval, the approval or denial of a Merchandize Credit, and the expiration
date if applicable, will be provided by mail to those Putative Class Members who
made claims other than on the Claims Web Site. Settling Defendant agrees to pay
for all costs and expenses of all the foregoing methods of notice (other than
costs associated with any website maintained by others referencing the
Settlement). The forms of the Notice of Final Approval to the Settlement Class
shall be subject to Court approval, but the manner, timing, content, and
substance of the Notice of Final Approval must be substantially consistent with
the terms of this Settlement Agreement.

8.      Settlement Benefits. 8.1 Settlement Relief.     The relief provided to
Settlement Class Members is multifaceted and includes  

Merchandise Credits for Settlement Class Members, sale of the OzoneGuard at the
agreed upon price set forth below and for an agreed upon period of time set
forth below, agreements regarding limitations on Sharper Image advertising for
the Ionic Breeze® going forward, and agreements on testing of new Ionic Breeze®
models going forward, all solely to the extent set forth more specifically as
follows:

8.2      Merchandise Credits.     8.2.1 The Merchandise Credit is available to
each Household having at least one  

Settlement Class Member as defined in § 2;

     8.2.2 One (1) Merchandise Credit in the amount of $19.00 shall be made
available to each Settlement Class Member, limited to one (1) per Household
(regardless of the number of Ionic Breeze® products Purchased by said member or
the amount spent on said products) who is either (1) found in the Ionic Breeze®
Database; or (2) provides Proof of Purchase as set forth herein.

     8.2.3 The Merchandise Credit shall be valid for one year from the date of
Notice of Final Approval.

8.2.4 The Merchandise Credits may not be redeemed for cash under any

circumstances.

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8.2.5 The Merchandise Credits shall not be subject to aggregation.

     8.2.6 The Merchandise Credit shall be used as tender against the purchase
of Sharper Image® Branded Products only.

8.3      OzoneGuard     8.3.1 On a date no later than ten (10) court days after
Notice of the Final  

Approval Settlement in this action, Sharper Image shall with respect to the
OzoneGuard attachment for Ionic Breeze® floor models only: 8.3.2 Due to
divergent prices among models of OzoneGuards, Sharper Image agrees to sell
OzoneGuards attachments at the store for one median retail price ($7.00).

     8.3.3 This one median price would stay in effect for 180 days from the date
of Notice of Final Approval.

     8.3.4 The OzoneGuard attachment may be purchased in the Sharper Image
stores. If the store where the customer attempts to purchase the product does
not have the attachment in stock, the customer may order it through the normal
process for taking customer orders for out of stock items.

     8.3.5 Alternatively, customers can purchase the OzoneGuard attachment
during this 180-day period on the Internet or by telephone as well; any purchase
by a customer where the customer requests shipping would be subject to Sharper
Image’s normal shipping charge.

     8.3.6 The median price will be available to all Sharper Image customers
without the need for any claim form, claims administration, or submission of
Product Identification Information.

     8.3.7 There is no limit on the number of OzoneGuard attachments a class
member or any other consumer can purchase at the median price during this
period.

     8.3.8 Sharper Image will design and tool an OzoneGuard attachment for any
Ionic Breeze® floor model not currently compatible with available OzoneGuard
attachments, and such OzoneGuards will be subject to the pricing structure
outlined above.

8.4 Modifications to Ionic Breeze® Advertisements & Independent Testing. 21

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     8.4.1 The parties agree that so long as the sales of the Ionic Breeze®
continue, Sharper Image will make the following modifications with respect to
advertisements for the Ionic Breeze®: 8.4.1.1 Sharper Image will eliminate all
quantitative references to room size in its advertising claims with respect to
the Ionic Breeze® (e.g., 500 square feet) and will not make such references with
respect to the Ionic Breeze® in the future absent reliable testing to support
such claims.

     8.4.1.2 Sharper Image will remove the British Allergy Foundation and the
Asthma and Allergy Foundation of America seals from its advertising for the
Ionic Breeze® and will not use these seals in any future marketing for the Ionic
Breeze®.

     8.4.1.3 Unless and until the Ionic Breeze® is registered as a medical
device, Sharper Image will not state the Ionic Breeze® is a medical device.

     8.4.1.4 Sharper Image shall not make any advertising claims that ozone
produces health benefits in connection with the Ionic Breeze®.

     8.4.2 The above modifications do not apply to non-Ionic Breeze products
such as the Hybrid or to any product developed, marketed, or sold whose name
does not include the term Ionic Breeze®. Settling Defendant cannot avoid the
obligations of paragraph 8.4 by removing the term Ionic Breeze® from an Ionic
Breeze® product.

     8.4.3 The above modifications are expressly conditioned upon such changes
in advertising being done solely pursuant to this Agreement and not as part of
any type of injunction.

     8.4.4 The above modifications shall be made and incorporated into Sharper
Image’s advertising, commencing no later than 180 days after the Effective Date
of Settlement.

     8.4.5 The requirements of this Agreement, including the above
modifications, do not apply to marketing or packaging materials already printed,
prepared, or in circulation up to 180 days after the Effective Date of
Settlement.

22

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     8.4.6 The Plaintiffs and Settlement Class Counsel agree, on behalf of all
Settlement Class Members, that these modifications adequately address the claims
raised by the class and waive claims based on the use of the disclosures or
modified language, provided that Sharper Image uses and complies with the
disclosures and that they accurately describe the attributes of the Ionic
Breeze®. The Settlement does not preclude Sharper Image from making changes to
the language in its disclosures (a) that Sharper Image reasonably believes are
necessary to comply with applicable law or to reflect a future change in its
products; (b) that are more detailed than or in addition to those required by
this Agreement; or (c) reflect results from subsequent testing.

     8.4.7 If Class Counsel or the Class Representatives assert that Sharper
Image violated any provision of the above corrective measures, Class Counsel or
the Class Representatives shall notify Settling Defendant’s Counsel, in writing,
and Sharper Image shall have forty-five (45) days to cure or challenge the
alleged violation and send a cure letter by the end of that period, unless, if
such violation cannot be cured within the time period, Sharper Image will
communicate to Settlement Class Counsel by the conclusion of the forty-five (45)
day period mentioned above that circumstances necessitate an additional time to
cure. In the event that Sharper Image opts to challenge the alleged violation,
both Plaintiffs and Settling Defendant agree, within thirty (30) days of the
forty-five (45) day period mentioned, to submit briefs to the Court for final
determination and ruling.

     8.4.8 Sharper Image will test (through an independent testing laboratory)
sample units of all current and future Ionic Breeze® models for ozone emissions
using the UL 867 test protocol and will not sell any Ionic Breeze® model that
has not or does not pass the UL 867 standard. The testing is agreed to be done
solely pursuant to this Agreement and not as part of any type of injunction.

9.      Cost of Notice and Additional Expenses.     The Settling Defendant
agrees to pay the cost of all Notice to the Putative Class Members  

and Settlement Class Members that is required by this Settlement Agreement or by
Order of the 23

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Court. In addition, Settling Defendant agrees to pay to Settlement Class Counsel
all reasonable and customary out-of-pocket expenses incurred after the date of
execution of this Agreement, including costs associated with Preliminary
Settlement Approval, the Final Order and Final Judgment, and Confirmatory
Discovery, such as court filing fees, copying charges, and reasonable travel
expenses necessary for non-Florida Settlement Class Counsel to attend hearings
before the Court in this Class Action and to perform Confirmatory Discovery. The
parties agree that Settling Defendant’s payment of these costs and expenses
provides additional value to the Settlement Class.

10.      Attorneys’ Fees, Class Representative Fees, And Litigation Costs And
Expenses. 10.1 After the parties had negotiated all principal terms and
conditions of this  

Settlement Agreement, the parties first entered into discussions regarding
attorneys’ fees and expenses related to the settlement of this Class Action.

     10.2 Settling Defendant agrees to pay an amount not to exceed
$1,875,000.00, plus the additional expenses outlined in paragraph 9 above,
subject to application for an award of attorneys’ fees and expenses and Court
approval, as full payment for all attorneys’ fees, costs, and expenses incurred
in connection with this Class Action.

     10.3 Any applications for an award of attorneys’ fees and costs will be
heard at the Fairness Hearing and such applications must be filed no later than
the Objection Date. Settling Defendant agrees not to object to any application
for an award of attorneys’ fees and costs made by Settlement Class Counsel,
provided that such application complies with this Agreement and is at or below
the above amount.

     10.4 The above amount is in addition to and separate from all other
consideration and remedies paid to and available to the Settlement Class, and
payment of the above amount shall be in addition to and shall not decrease or
increase the Settlement Packages available to the Settlement Class Members.

     10.5 Attorneys’ fees shall be payable to Settlement Class Counsel due and
payable ten days after the Effective Date of Settlement. If any portion of the
attorneys’ fees is

24

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disallowed or is deemed excessive in light of the amount of the class recovery,
that amount shall be deducted from the sum due. Attorneys’ fees and costs shall
not bear interest if paid in the manner and at the time provided herein.

     10.6 Each of the two Settlement Class Representatives will receive an
incentive award of $10,000.

     10.7 Based on the above, Settlement Class Counsel intend to seek approval
from the Court of attorneys’ fees and expenses in the amount of $1,875,000.00,
plus an additional $10,000 in fees to each of the Settlement Class
Representatives.

11.      Opt-Out Rights.     11.1 Putative Class Members have the right to
exclude themselves (“opt-out”) from  

this Settlement Agreement and from the Settlement Class by timely submitting to
the Clerk of the Court, by and through the Claims Administrator, a completed
“Opt-Out Form” (in a form to be approved by the Court). Putative Class Members
who so timely elect to opt-out shall be excluded from this Settlement Agreement
and from the Settlement Class. Such opt-out rights must be exercised by the
“Opt-Out Deadline” by which the Court establishes the deadline for filing the
Opt-Out Form. Within fifteen (15) days after the Opt-Out Deadline, the Claims
Administrator will provide Settling Defendant’s Counsel and Settlement Class
Counsel with a complete list of all timely and valid requests for exclusion, who
will jointly submit the list to the Court within five (5) court days thereafter.
Any Putative Class Member who does not submit a properly completed Opt-Out Form
by the Opt-Out Deadline and in the required form shall be a Settlement Class
Member and shall be bound by the terms of this Settlement Agreement and the
Final Judgment thereon, provided that, in order to share in the Settlement
Packages, such Settlement Class Member must timely comply with claims procedures
described herein.

     11.2 This Settlement Agreement survives and applies even if there are
Putative Class Members who opt-out, provided that the number of Purchasers who
opt-out does not exceed 2% of the Purchasers contained in the Ionic Breeze®
Database. If the number of Putative

25

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Class Members who opt-out does exceed more than 2% of the Putative Class Members
contained in the Ionic Breeze® Database, Settling Defendant shall have the right
to terminate this Agreement.

12.      Claims Procedure.     12.1 In order to be eligible to be considered
under § 13.5 to receive the Settlement  

Package available under § 8, a Settlement Class Member must (1) be identifiable
as a Purchaser from the Ionic Breeze® Database and electronically register as a
Settlement Class Member at “www.ibsettlement.com” by the Final Claims Bar Date;
(2) submit a Claim Form on the Claims Web Site along with Proof of Purchase by
the Final Claims Bar Date; or (3) fill-out a Claim Form along with Proof of
Purchase and mail it to the Claims Administrator postmarked on or before the
Final Claims Bar Date.

     12.2 The Final Claims Bar Date shall be determined by the Court. The
parties urge the Court to set said date to the Final Claims Bar Date stated on
Exhibit A.

     12.3 The details of how the Claims Web Site will be administrated will be
agreed on between Settling Defendant’s Counsel and Settlement Class Counsel. If
the parties are unable to resolve any such issue, it will be submitted to the
Court for determination.

13.      Claims Administration     13.1 The parties will ask that the Court
appoint the Claims Administrator as part of  

the Preliminary Settlement Approval, and the Plaintiffs and Settling Defendant
will jointly recommend the appointment of a nationally known class action claims
administration firm as the Claims Administrator who will process and handle the
claims process as well as jointly administer with Settling Defendant the Claims
Web Site. The parties will endeavor to agree upon the firm to recommend and,
failing agreement will each have the right to make a recommendation to the
Court. The Claims Administrator shall be entitled to a reasonable fee and cost
reimbursement approved by the Court. Settling Defendant will pay the cost,
expenses, and fees of Claims Administration, in addition to other amounts
payable hereunder. The parties agree that Settling Defendant’s payment of this
cost has additional value to the 26

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Settlement Class. The Claims Administrator and Claims Administration shall be
under the authority and continuing jurisdiction of the Court. The Claims
Administrator shall be subject to removal by the Court for cause. If the Claims
Administrator resigns, or is removed, the parties will recommend a replacement
in accordance with the above procedures.

13.2 General Processing Guidelines.

     The Claims Administrator shall promptly process Claim Forms as submitted,
approve or disapprove claims as received, process allowed claims and tender the
appropriate Settlement Package to allowed Settlement Class Members and shall
otherwise carry out and comply with the provisions of this Settlement Agreement
that require administrative management. Within forty (40) days after the Final
Claims Bar Date, the Claims Administrator shall submit to the Court, Settling
Defendant’s Counsel, and Settlement Class Counsel a written report detailing the
allowed claims. Within forty (40) calendar days after the Closing Date, Settling
Defendant’s Counsel shall file a motion with the Court to close the Claims
Administration and shall serve that motion on the Claims Administrator,
Settlement Class Counsel, and any other persons who filed a pleading with the
Court in this case. When satisfied that the Class Administration should be
closed, the Court will enter an order closing the same and discharging the
Claims Administrator and Settlement Class Counsel.

13.3 Claims Administrator To Rely On Submitted Documents.

     In allowing claims, disallowing claims, and tendering the Settlement
Packages to the allowed Settlement Class Members, the Claims Administrator shall
rely solely on the Opt-Out Form, Claim Form, Proof of Purchase, Customer
Numbers, and Product Identification Documentation that is timely and properly
submitted to the Claims Administrator by the Settlement Class Members, as well
as the information contained on Ionic Breeze® Database. The Claims Administrator
shall have no duty to investigate a particular claim beyond examination of such
documentation. Except as otherwise expressly provided herein, the Claims
Administrator is not obligated to examine or consider documentation that is
received beyond the respective deadlines established by the Court, but, as
provided in § 13.4, may do so if the Claim 27

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Form was timely received, in its discretion without setting a course of dealing,
practice, or policy and without obligating the Claims Administrator or Settling
Defendant to make the same or similar exceptions for other Settlement Class
Members. Notwithstanding the foregoing, Settling Defendant, Settlement Class
Counsel, and the Claims Administrator shall take reasonable steps to prevent
fraud in the Claims Administration process.

13.4      Deficiencies in Documentation.     13.4.1 In the event that, during
claims processing, the Claims Administrator finds  

technical deficiencies exist in the Claim Form, Proof of Purchase, or Product
Identification Documentation from a Settlement Class Member, which the Claims
Administrator, in its discretion, believes may be correctable, then the Claims
Administrator shall notify the Settlement Class Member of the technical
deficiencies, and shall allow the Settlement Class Member thirty (30) calendar
days from the date of receipt of such notice to correct the deficiencies. If the
deficiencies are not corrected within the thirty (30) day period, the Claims
Administrator shall reject the claim without prejudice to the right of the
Settlement Class Member to resubmit the Opt-Out Form or Claim Form or Proof of
Purchase or Product Identification Documentation, provided the resubmission by
the Settlement Class Member meets the deadlines and other requirements set forth
in this Settlement Agreement or established by the Court.

     13.4.2 “Technical deficiencies” as used in this subsection do not include
material deficiencies or missing the Final Claims Bar Date, which absolutely
bars allowance of a claim.

     13.5 Approval or Rejection of Claims. In order for a particular Settlement
Class Member to become an allowed claimant, the Claims Administrator must be
satisfied and certify that: 13.5.1 the claimant did not opt-out pursuant to the
applicable provisions of the Settlement Agreement and Notices; and 13.5.2 the
claimant:

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     13.5.2.1 is a bona fide Purchaser of the product from Sharper Image as
reflected in the Ionic Breeze® Database and the claimant electronically
registered a claim on the Claims Web Site; or 13.5.2.2 submitted a properly
completed, sworn, and executed Claim Form before the Final Claim Bar Date to the
Claims Administrator (1) along with the claimant’s required Proof of Purchase
and such submittal documentation meets the criteria outlined in this Agreement
for the particular claim being made; or (2) the claimant is a bona fide
Purchaser of the product from Sharper Image as reflected in the Ionic Breeze®
Database; and 13.5.3 No other Person in the claimant’s Household has submitted a
claim.

13.6 Reports.

     The Claims Administrator shall report the results of processing all claims
to the Court, Settlement Class Counsel, and Settling Defendant’s Counsel. The
reports shall be filed quarterly, with a final report, as of the Closing Date,
due forty (40) days after the Closing Date. The Claims Administrator shall make
any adjustments to the results as ordered by the Court.

     13.7 Distribution of Settlement Benefits. The Claims Administrator shall
promptly make arrangements to satisfy allowed claims as and when allowed after
the Effective Date of Settlement. Settling Defendant agrees to make the benefits
available in a timely fashion so as to allow the Claims Administrator to
promptly satisfy allowed claims as and when allowed. Notice of the issuance of
the Merchandise Credits for each allowed claim shall be delivered by the Claims
Administrator to each of the allowed claimants via the Claims Web Site where
possible, or where necessary, at the address shown for the allowed claimant on
his, her, or its Claim Form. For all allowed claimants to whom the Claims
Administrator was unsuccessful in attempting to deliver the benefits and as to
whom the Claims Administrator recommends taking no further actions to deliver
their benefits, the Court will enter an order that states, for each, either that
the Claims Administrator need not make any further effort to deliver the
benefits or that directs further efforts to be taken by the Claims
Administrator. The cost of such delivery and efforts to deliver shall be borne
by the Settling Defendant. Any Merchandise 29

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Credits not disbursed prior to the Closing Date shall cease to exist. In no
event shall the Settling Defendant or the Claims Administrator have any
liability or obligation for claims beyond the agreed upon amounts.

     13.8 Appeal of Disallowed Claims. Any member of the Settlement Class shall
have the right to appeal the determination of the Claims Administrator regarding
said claimant’s disallowed claim. Appeals shall be in writing and must be first
submitted to the Person designated, from time to time, by the Claims
Administrator to decide such appeals. The procedure for such appeals shall be
established by the Class Administrator and posted on the Claims Web Site. If the
claimant remains unsatisfied, then appeal may be had to the Court. Any appeal to
the Court shall be by motion filed no later than fifteen (15) days after final
action by the Claims Administrator on such appeal and shall be determined after
notice to the appealing claimant, the Claims Administrator, Settlement Class
Counsel, and Settling Defendant’s counsel. Such appeals may not collaterally
attack the propriety of the Settlement Agreement, and are limited to the sole
issue of whether the Claims Administrator appropriately determined the validity
and/or value of the claimant’s disallowed claim.

13.9 Limited Liability of Claims Administrator:

     The Claims Administrator and its owners, officers, directors, partners,
shareholders, members, manager, employees, and agents do not owe a fiduciary
duty to the Settlement Class Members, Plaintiffs, or to the Settling Defendant.
The parties will ask the Court to grant the Claims Administrator limited
immunity from liability to the effect that the Claims Administrator (and its
owners, officers, directors, partners, shareholders, members, manager,
employees, and agents) shall be liable only for breach of contract, actual
fraud, and negligence.

14.      Agreement Not to Disparage Ionic Breeze® Products.     Settlement Class
Counsel, Plaintiffs, and the Settlement Class Members agree not to  

disparage the Ionic Breeze® or Sharper Image and its products, and expressly
waive any right to assert First Amendment, Free Speech, or anti-SLAPP protection
in any action to enforce this provision.

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15.      Release.     15.1 Released Persons. Released persons and entities shall
include without limitation  

the following (the “Releasees,” “Released Persons,” “Sharper Image,” or
“Settling

Defendant”): Sharper Image and Zenion Industries, Inc. and all of their
respective current and former officers, directors, employees, agents, customers,
resellers, retailers, wholesalers, distributors, attorneys, experts, assigns,
insurers, employers, parents, subsidiaries, affiliates, principals, partners,
representatives, joint venturers, beneficiaries, shareholders, independent
contractors, consultants, predecessors, and successors.

     15.2 Released Rights. Upon the Effective Date of Settlement, the Plaintiffs
and each of the Settlement Class Members, and their respective heirs, executors,
administrators, representatives, agents, attorneys, partners, spouses,
successors, predecessors-in-interest, assigns, and any authorized users of their
accounts, shall be deemed to have, and by operation of the Final Judgment shall
have, fully, finally and forever released, relinquished and discharged any and
all rights, duties, obligations, claims (including those that the Plaintiffs or
any Settlement Class Members do not know or suspect to exist in their favor at
the time of the signing of this Settlement Agreement which, if known by them,
might have affected their settlement with and release of the Released Parties,
or might have affected their decision not to object to this Settlement
Agreement), actions, causes of action or liabilities, whether arising under
local, state, or federal law, whether by statute, contract, common law or
equity, whether known or unknown, suspected or unsuspected, asserted or
unasserted, foreseen or unforeseen, actual or contingent, liquidated or
unliquidated, as of the Effective Date of Settlement against the Released
Parties: that arise out of or are related in any way or could have been asserted
with respect to any or all of the acts, omissions, facts, matters, transactions,
or occurrences that were directly or indirectly alleged, asserted, described,
set forth or referred to in this Class Action or any other action, including but
not limited to, those actions presently pending in Florida and California State
Courts described below, related to any Ionic Breeze®, including, but not limited
to, any and all claims related in any way to the efficacy, advertisements,

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emissions or reactions (e.g. ozone, terpenes and reactions with terpenes, or any
other type of reaction related to the operation of the Ionic Breeze®), volatile
organic compounds, ultrafine particles, health risks, and/or performance of the
Ionic Breeze®, including but not limited to, claims for alleged false
advertising, breach of express and/or implied warranties, unjust enrichment,
Magnuson-Moss Warranty Act, conspiracy, unfair competition, state consumer
protection statutes, common law prohibiting unfair or deceptive trade practices,
breach of contract, fraud, and/or misrepresentation and equity prohibiting
unjust enrichment or requiring restitution or disgorgement; and (2) that are,
were, or could have arisen out of or been related in any way to Settling
Defendant’s advertising, manufacture, design or sale of the Ionic Breeze®
products and the disclosures relating thereto (all such released claims
collectively the “Released Claims” or “Released Rights”). This release will not
apply to claims for breach of this Settlement Agreement.

     15.3 With respect to the releases set forth above, the parties stipulate
and agree that, upon the Effective Date of Settlement, the Plaintiffs shall
expressly waive, and each of the Settlement Class Members shall be deemed to
have waived, and by operation of the Order shall have waived, the provisions,
rights and benefits of California Civil Code Section 1542 (and all similar
state, federal, and international laws), which provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS

WHICH THE CREDITOR DOES NOT KNOW OR

SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS

SETTLEMENT WITH THE DEBTOR.

     Plaintiffs and each of the Settlement Class Members understand and
acknowledge the significance of this waiver of California Civil Code Section
1542 and/or of any other applicable

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law relating to limitations on releases. The Plaintiffs and/or Settlement Class
Members or their counsel may hereafter discover facts in addition to or
different from those which any of them now knows or believes to be true with
respect to the subject matter of the Released Claims, but the Plaintiffs shall
expressly and each Settlement Class Member, upon the Effective Date of
Settlement, shall be deemed to have, and by operation of the Final Judgment and
Final Order shall have, fully, finally, and forever settled and released any and
all Released Claims, known or unknown, suspected or unsuspected, contingent or
non-contingent, whether or not concealed or hidden, which now exist, or
heretofore have existed upon any theory of law or equity now existing or coming
into existence in the future, including, but not limited to, conduct which is
negligent, intentional, with or without malice, or a breach of any duty, law or
rule, without regard to the subsequent discovery or existence of such different
or additional information. The Plaintiffs acknowledge, and the Settlement Class
Members shall be deemed by operation of the Final Judgment and Final Order to
have acknowledged, that the foregoing waiver was separately bargained for and a
key element of the Settlement Agreement of which this release is a part.

     15.4 Upon the Effective Date of Settlement, as defined in § 1.12, Settling
Defendant shall be deemed to have, and by operation of the Final Judgment and
Final Order shall have, fully, finally, and forever released, relinquished and
discharged Plaintiffs and Settlement Class Counsel from all claims arising out
of, in any way relating to, or in connection with the initiation, prosecution,
and settlement of this Class Action, except for claims for breach of the
Settlement Agreement.

16.      Other Pending Actions.     The Settlement Class Members and Settling
Defendant expressly retain the right, to the  

extent permitted by law and this Settlement Agreement, to plead this Settlement
Agreement as a full and complete defense to, or as the basis for a stay or an
injunction against, any action, suit or other proceeding to recover any claim
released by § 15, which may be instituted, prosecuted, or attempted in breach of
this Settlement Agreement.

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17.      Final Approval of This Agreement.     This Settlement Agreement shall
become final upon the Effective Date of Settlement  

which is the eleventh (11th) calendar day after the latest date for the
occurrence of all of the following three events: (a) the Settlement Agreement is
executed and delivered by all parties and approved in all respects by the Court;
(b) entry, as provided herein, of the Final Order and Final Judgment; and (c)
the Final Order and Final Judgment become Final.

18.      Final Judgment     18.1 Subject to the Courts’ approval, the Final
Judgment shall be substantially in the  

form attached hereto and incorporated herein by reference as Exhibit C.

     18.2 The Settling Defendant desires that this settlement result in finality
and closure as to the issues involved in the Class Action.

     18.3 The form of Final Judgment may include additional provisions as the
Court may direct which are not inconsistent with this Settlement Agreement. In
addition to the Final Judgment, the Court may issue such other orders, findings
of fact, and conclusions of law as the Court may order, so long as not
inconsistent with this Settlement Agreement. Without limiting the foregoing, it
is anticipated that there may be additional orders, provisions in the Final
Judgment, findings of fact and conclusions of law regarding: objections;
attorney fees; costs and expenses; fees to the Settlement Class
Representative(s); and with respect to determinations by the Court on those
matters that are to be determined by the Court by the express terms of this
Settlement Agreement.

19.      Effect of Failure of Court To Approve.     If the Court fails to
approve this Settlement Agreement or any part hereof, or if such  

approval is modified in any way not permitted by this Settlement Agreement, or
set aside on appeal, or if the Court does not enter the Final Order and the
Final Judgment, provided for in

§ 18, or if the Court enters the Final Order and Final Judgment and review or
modification is sought (whether by way of motion, appeal, writ, or other
proceeding), and on such review, the Final Order or Final Judgment is not fully
affirmed or is materially modified, then this

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Settlement Agreement may be rightfully cancelled and terminated at the option of
either party, including as specifically provided for in this Agreement, and the
parties shall be restored to their original positions, except as expressly
provided herein. Termination, cancellation, and voiding of this Settlement
Agreement as provided in the foregoing shall not affect any agreement or
obligation stated herein to survive termination. In the event that the
Settlement Agreement shall be of no force or effect and, in any event, the
parties hereto agree that this Settlement Agreement, including its exhibits,
whether or not it shall become final, and any and all negotiations, documents
and discussions associated with it shall be without prejudice to the rights of
any party, shall not be deemed or construed to be an admission or evidence of
any violation of any statute or law of any liability or wrongdoing by any
Settling Defendant or of the truth of any of the claims or allegations contained
in the First Amended Complaint or any other pleading; and evidence thereof shall
not be discoverable or used directly or indirectly, in any way, whether in the
Class Action or in any other action or proceeding. However, any Settling
Defendant or Settlement Class Member may introduce the Final Judgment and
Settlement Agreement for the limited purpose of establishing their rights and
obligations under this Settlement Agreement or that a particular claim is or is
not barred by the Final Judgment or Settlement Agreement. The parties expressly
reserve all of their rights if the settlement does not become Final in
accordance with the term of this Settlement Agreement.

20.      Successors & Assigns.     This Settlement Agreement shall be binding
upon, and inure to the benefit of the  

successors and assigns of the parties hereto. Without limiting the generality of
the foregoing, each and every covenant and agreement herein made by the
Settlement Class Counsel and the Plaintiffs on behalf of themselves and on
behalf of the Settlement Class, shall be binding upon all Settlement Class
Members.

21.      Entire Agreement.     This Settlement Agreement contains an entire,
complete, and integrated statement of each  

and every term and provision agreed to by and among the parties; it is not
subject to any 35

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condition not provided for herein. This Settlement Agreement supersedes any
prior agreements or understandings between and among Plaintiffs, Settlement
Class Members, and the Settlement Class Counsel, and Settling Defendant and
Settling Defendant’s Counsel regarding the subject matter of the Class Action or
this Settlement Agreement. This Settlement Agreement shall not be modified in
any respect except by a writing executed by all the parties hereto or by order
of the Court to the limited extent expressly provided for in this Settlement
Agreement.

22.      Exhibits.     All exhibits are incorporated into this Agreement by
reference. Any inconsistency  

between this Settlement Agreement and the exhibits attached hereto shall be
resolved in favor of this Settlement Agreement.

23.      No Presumption Against Drafter.     None of the parties hereto shall be
considered to be the drafter of this Settlement  

Agreement or any provision hereof for the purpose of any statute, case law, or
rule of interpretation or construction that would or might cause any provision
to be construed against the drafter hereof. This Settlement Agreement was
drafted with substantial input by all parties, and no reliance was placed on any
representations other than those contained herein.

24.      Governing Law.     This Settlement Agreement shall be governed by and
shall be construed and enforced in  

accordance with federal law, where appropriate, and otherwise pursuant to the
laws of the State of Florida, except for any conflict of law provisions in said
laws of the State of Florida that may otherwise require the application of the
laws of a jurisdiction other than that of the State of Florida to the
performance, validity, construction or enforcement of this Settlement Agreement.

25.      Continuing Jurisdiction and Exclusive Venue.     25.1 The Settling
Defendant and each Settlement Class Member hereby irrevocably  

submits to the exclusive jurisdiction and venue of the United States District
Court for the Southern District of Florida, Miami Division, for any suit,
action, proceeding, case, controversy, or dispute relating to this Settlement
Agreement and Exhibits hereto and 36

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negotiation and performance or breach of same. All Settlement Class Members and
the Settling Defendant are barred and enjoined from commencing or continuing any
suit, action, proceeding, case, controversy, or dispute relating to this
Settlement Agreement and Exhibits hereto and negotiation, performance or breach
of same, in any state or federal court or other body other than the United
States District Court for the Southern District of Florida, Miami Division.

     25.2 It is expressly agreed and stipulated that the United States District
Court for the Southern District of Florida, Miami Division, shall have exclusive
jurisdiction and authority to consider, rule upon, and issue a final order and
final judgment with respect to the subject matter of any of the following
actions, suits, or proceedings whether judicial, administrative or otherwise,
which may be instituted by any Person, individually or derivatively, with
respect to [A] the validity or enforceability of this Settlement Agreement, [B]
the authority of Settling Defendant to enter into or perform this Settlement
Agreement in accordance with its terms, [C] the remedies afforded by this
Settlement Agreement, attorney fees, Settlement Class Representatives’ fees,
costs, and expenses provided for in this Settlement Agreement, injunctions
against other actions; or [D] any other foreseen or unforeseen case or
controversy in the United States related to or impacted by this Settlement
Agreement. This reservation of jurisdiction does not limit any other reservation
of jurisdiction in this Settlement Agreement nor do any other such reservations
limit the reservation in this sub-section.

     25.3 Further, the parties agree that all cases and controversies against
the Released Parties regarding the performance, efficacy and/or ozone emission
of Ionic Breeze® models identified herein should be heard only in this Court and
that the Putative Class Members should be enjoined from bringing any such suits,
except in this Court. The parties agree that this Court shall expressly retain
jurisdiction and will continue to retain jurisdiction in this Class Action so
that it can enforce the Settlement Agreement and this Final Judgment by, among
other things, issuing injunctions in the appropriate instances against later
actions filed in violation of the terms of the Settlement Agreement and this
Court’s Orders.

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     25.4 The parties agree to move the Court to include the substance of the
foregoing provisions in its order that certifies a temporary class and sets this
Settlement Agreement for final hearing and Final Judgment. In the event of a
case, controversy, or dispute arising out of the negotiation of, approval of,
performance of; or breach of this Settlement Agreement, the Court shall award
attorneys fees and costs to the prevailing party. Solely for purposes of such
suit, action or proceeding, to the fullest extent that they may effectively do
so under applicable law, the parties hereto irrevocably waive and agree not to
assert, by way of motion, as a defense or otherwise, any claim or objection that
they are not subject to the jurisdiction of such court, or that such Court is,
in any way, an improper venue or an inconvenient forum.

26.      Authority     The undersigned counsel for the parties to this
Settlement Agreement covenant and  

represent that they are fully authorized to enter into and to execute this
Settlement Agreement, provided that Settlement Class Counsel’s authority is
subject to certification of a class and approval of this settlement by the
Court.

27.      Currency Dates & Times.     All values, fees, expenses, costs, and
other amounts stated herein are to be determined,  

are stated, and are to be paid in United States legal currency. All dates and
times stated in this Settlement Agreement mean the date and time in Miami,
Florida.

28.      Notices.     All notices to Settlement Class Counsel, the Settling
Defendant, and Settling Defendant’s  

Counsel required under this Settlement Agreement shall be sent by first class
U.S. Mail, by hand delivery, or by facsimile, to the recipient designated in
this Settlement Agreement. Timeliness of all submissions and notices shall be
measured by the date of receipt (or some other method of calculating the date if
otherwise provided for herein), unless the addressee refuses or delays receipt.
The persons designated to receive notice are as follows:

Jere F. White, Jr., Esq.
Stephen J. Rowe, Esq.

David L. Aronoff, Esq.
Gayle I. Jenkins, Esq.

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Enrique J. Gimenez, Esq.    Thelen Reid Brown Raysman & Steiner LLP  Lightfoot,
Franklin & White, LLC    333 S. Hope Street, 29 th Floor  400 20th Street North 
  Los Angeles, California 90071  Birmingham, Alabama 35203    Telephone:   
 (213) 576-8044  Counsel for Settling Class Representative    Facsimile:   
(213) 576-8080  and Settling Class    Counsel for Settling Defendant  Robert L.
Parks, Esq.    Patrick M. Ryan, Esq.  Haggard, Parks, Haggard & Lewis, P.A.   
Thelen Reid Brown Raysman & Steiner LLP  330 Alhambra Circle, 1st Floor    101
Second Street, Suite 1800  Coral Gables, Florida 33134    San Francisco, CA
94105  Counsel for Settling Class Representative    Telephone:     415.369-7356 
and Settling Class    Facsimile 415.369-8718      Counsel for Settling
Defendant      Terry C. Young, Esq.      James S. Toscano, Esq.      Lowndes,
Drosdick, Doster, Kantor & Reed, P.A.      215 North Eola Drive      Post Office
Box 2809      Orlando, Florida 32801      Telephone:     407-843-4600     
Facsimile:    407-843-4444      Counsel for Settling Defendant 

29.      Preliminary Injunction and Stays of Other Actions     29.1 This term of
the Settlement Agreement being a material, negotiated term,  

Settling Defendant reserves the right to terminate the Settlement Agreement, at
its option, if preliminary approval of the Settlement Agreement does not include
the issuance of a stay and injunction(s) in substantial conformity with the
following:

29.1.1 All proceedings in this Class Action and all Released Claims, as
described

in the Settlement Agreement, by or on behalf of any Settlement Class Member in
any forum are hereby ordered stayed and are enjoined until the issuance of the
Final Order and Final Judgment by this Court, except as may be necessary to
implement the Settlement Agreement or comply with the terms of the Settlement
Agreement. The proceedings that are stayed and enjoined until issuance of the
Final Order and Final Judgment include, but are not limited to: (i) Robertson v.
Sharper Image Corp., Superior Court of California, San Francisco County, Case
No.: CGC 04-

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434230, (ii) Potter v. Sharper Image Corp., Superior Court of California, San
Francisco County, Case No.: CGC-0346350, (iii) Cox v. Sharper Image Corp.,
Superior Court of California, San Francisco County, Case No.: CGC-04-429331, and
(iv) Bryant v. Sharper Image Corp., Florida Fourth Judicial Circuit Court, Duval
County, Case No.: 16-2003-CA0006272XXX CV-C. Pending final determination of
whether the settlement should be approved, neither the Settlement Class
Representatives nor any Settlement Class Member, either directly,
representatively, or in any other capacity, nor any person or entity allegedly
acting on behalf of any Settlement Class Member, shall commence, continue, or
prosecute against Sharper Image, or against any of the other Released Parties,
any action or proceeding in any court, tribunal, or elsewhere, asserting any of
the Released Claims. This injunction has one exception: it shall not apply to
individual claims of any Putative Class Member who timely excludes himself from
this Class Action in a manner that complies with Paragraph 11 of this Order.
This stay and injunction are necessary to protect and effectuate the Settlement
Agreement, this Order, and this Court’s flexibility and authority to effectuate
this Settlement Agreement and to enter the Final Order and Final Judgment when
appropriate, and is ordered in aid of this Court’s jurisdiction and to protect
its judgments pursuant to 28 U.S.C. §§ 165(a) and 2283. Upon issuance of the
Final Order and Final Judgment, this injunction shall automatically convert to a
permanent injunction and shall be enforceable as such regardless of whether it
is mentioned in the Final Order and/or Final Judgment.

30.      Permanent Injunction as Part of Final Judgment     30.1 This term of
the Settlement Agreement being a material, negotiated term,  

     Settling Defendant reserves the right to terminate the Settlement
Agreement, at its option, if Preliminary Settlement Approval and/or the Final
Order and Final Judgment do not include the issuance of a stay and injunction(s)
in substantial conformity with the following: 30.1.1 All Released Claims, as
described in the Settlement Agreement, by or on behalf of any Settlement Class
Member in any forum are hereby ordered permanently enjoined, except as may be
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comply with the terms of the Settlement Agreement. The proceedings hereby
enjoined and ordered to be dismissed with prejudice include, but are not limited
to: (i) Robertson v. Sharper Image Corp., Superior Court of California, San
Francisco County, Case No.: CGC 04-434230, (ii) Potter v. Sharper Image Corp.,
Superior Court of California, San Francisco County, Case No.: CGC-0346350, (iii)
Cox v. Sharper Image Corp., Superior Court of California, San Francisco County,
Case No.: CGC-04-429331, and (iv) Bryant v. Sharper Image Corp., Florida Fourth
Judicial Circuit Court, Duval County, Case No.: 16-2003-CA0006272XXX CV-C.
Neither the Settlement Class Representatives nor any Settlement Class Member,
either directly, representatively, or in any other capacity, nor any person or
entity allegedly acting on behalf of any Settlement Class Member, shall
commence, continue, or prosecute against Sharper Image, or against any of the
other Released Parties, any action or proceeding in any court, tribunal, or
elsewhere, asserting any of the Released Claims. This injunction has one
exception: it shall not apply to individual claims of any Putative Class Member
who timely excluded himself, herself, or itself from this Class Action in a
manner that complied with Paragraph 11 of the Preliminary Approval Order. This
injunction is necessary to protect and effectuate the Settlement

Agreement, the Final Order, and this Court’s flexibility and authority to
effectuate this Settlement Agreement and to preserve the Final Order, and is
ordered in aid of this Court’s jurisdiction and to protect its judgments
pursuant to 28 U.S.C. sections 1651 (a) and 2283.

31.      Order of Dismissal With Prejudice of Other Pending Actions     The
Final Judgment will include a provision ordering the dismissal with prejudice of
all  

other actions related to the Released Claims described in § 15.

32.      Stay     Unless and until this Settlement Agreement is terminated
pursuant to its provisions, the  

parties agree that all discovery, motions, pleadings, and other activity in this
Class Action affecting the Settling Defendant shall be stayed except to the
extent necessary to effectuate this settlement.

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33.      Additional Terms.     33.1 Plaintiffs and Settlement Class Counsel
shall not issue, or facilitate, or cause to  

be issued, any press release or other public statements regarding the settlement
except in accordance with a court-approved plan for dissemination of Class
Notice and as necessary to obtain Preliminary Settlement Approval. Except as may
be necessary for Sharper Image to comply with legal, statutory, and/or
regulatory requirements of disclosure of information, no statements regarding
the settlement will be made prior to application for Preliminary Settlement
Approval whatsoever, beyond Settlement Class Counsel, Settling Defendant’s
Counsel, Settling Defendant, and Plaintiffs. Inquiries may only be responded to
by reference to information in the public record. This provision shall not
prohibit Settling Class Counsel from communicating with Settlement Class
Members; provided, however, that Plaintiffs and Settlement Class Counsel must
comply with all confidentiality agreements and protective orders in this Class
Action. Any and all drafts of this Settlement Agreement and other related
settlement documents shall remain confidential and shall not be disclosed or
duplicated except as necessary to obtain approval of this settlement.

     33.2 The Settlement Agreement compromises claims that were contested and
shall not be deemed an admission by any parties to this Class Action as to the
merits of any claim or defense. Settling Defendant and Plaintiffs agree that the
Settlement Package and the other terms of the Settlement Agreement were
negotiated in good faith by Settling Defendant and Plaintiffs, and reflect a
settlement that was reached voluntarily after a mediation process under the
supervision of Lawrence M. Watson, Jr., Upchurch Watson White & Max Mediation
Group, Inc. and consultation with competent legal counsel.

     33.3 Neither the act of negotiating the Settlement Agreement, including the
agreement by Settling Defendant to stipulate to a nationwide settlement class,
nor any act performed or document executed pursuant to or in furtherance of the
Settlement Agreement: (a) is or may be deemed to be or may be used as an
admission of, or evidence of, the validity of any Released Claim, or of any
wrongdoing or liability of the Settling Defendant; (b) is or may

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be deemed to be or may be used as an admission of, or evidence of, any fault or
omission of the Settling Defendant in any civil, criminal or administrative
proceeding in any court, administrative agency or other tribunal; or (c) is or
may be deemed to be a waiver of Settling Defendant’s right to seek to enforce of
its rights, including those provided for herein, in other cases or against
persons or entities who opt out of the Settlement Agreement. Settling Defendant
may file the Settlement Agreement and/or the Final Judgment in any action that
has been or may be brought against them in order to support a defense or
counterclaim based on principles of res judicata, collateral estoppel, release,
good faith settlement, judgment bar or reduction or any other theory of claim
preclusion or issue preclusion or similar defense or counterclaim.

     33.4 All agreements made and orders entered during the course of the
litigation relating to the confidentiality of information shall survive this
Settlement Agreement.

34.      Counterparts.     This Settlement Agreement may be executed in
counterparts, each of which shall  

constitute an original. Facsimile or pdf signatures shall be considered valid
signatures as of the date hereof, although the original signature pages shall
thereafter be appended to this Settlement Agreement and kept in the custody of
Settling Defendant’s Counsel.

EXECUTED on January 16, 2007. [INTENTIONALLY LEFT BLANK]

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    LIGHTFOOT, FRANKLIN & WHITE LLC      /s/ Manuel Figueroa    By: /s/ Jere F.
White  Manuel Figueroa, Plaintiff    Jere F. White, a partner 

    HAGGARD, PARKS, HAGGARD & LEWIS, P.A.      /s/ Dixie M. Garner       By: /s/
Robert L. Parks  Dixie M. Garner, Plaintiff       Robert L. Parks, a partner 

Sharper Image Corporation    THELEN REID BROWN RAYSMAN &      STEINER LLP     
By : /s/ Jerry W. Levin    By: /s/ David L. Aronoff  Its: Chairman    David L.
Aronoff, a partner. 

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