SEVENTH AMENDMENT TO FINANCING AGREEMENT

          This  SEVENTH  AMENDMENT TO FINANCING  AGREEMENT  (this  "Amendment"),
dated as of September  29,  2000,  is entered  into by and among  SHARPER  IMAGE
CORPORATION,  a Delaware corporation (the "Borrower") and THE CIT GROUP/BUSINESS
CREDIT,  INC.,  a New  York  corporation  ("CITBC"),  and  amends  that  certain
Financing  Agreement,  dated  September  21,  1994  (as the  same  is in  effect
immediately  prior  to  the  effectiveness  of  this  Amendment,  the  "Existing
Financing  Agreement" and as the same may be amended,  supplemented  or modified
and in effect from time to time, the "Financing Agreement"),  by and between the
Borrower and CITBC.  Capitalized  terms used and not  otherwise  defined in this
Amendment  shall have the same  meanings in this  Amendment  as set forth in the
Financing Agreement.

                                    RECITAL

        The Borrower has requested  that CITBC amend  various  provisions of the
Existing  Financing  Agreement,  and CITBC is  willing  to agree to so amend the
Existing  Financing  Agreement  on the terms and subject to the  conditions  set
forth below.

                                   AGREEMENT

        NOW, THEREFORE, in  consideration of the foregoing, the mutual covenants
and  agreements set forth below and other good and valuable  consideration,  the
receipt and  adequacy  of which are hereby  acknowledged,  the parties  agree as
follows:

        SECTION 1.   Amendments.  On the terms of this  Amendment and subject to
the satisfaction of the conditions precedent set forth below in Section 2, CITBC
and the Borrower hereby agree as follows:

               (a) For the period commencing October 1, 2000 and ending December
31,  2000,  the limit on the  aggregate  amount of  Eligible  Ordered  Inventory
computed  pursuant  to  clauses  (a) and (b) of Section  3,  Paragraph  1 of the
Financing  Agreement set forth in the proviso to such paragraph  shall hereby be
temporarily increased from "$6,500,000" to "$15,000,000".

               (b)  For the period commencing October 1,2000 and ending December
31, 2000, the limit on documentary  Letters of Credit set forth in clause (i) of
the first  sentence of Section 4, Paragraph 1 of the Financing  Agreement  shall
hereby be temporarily increased from "$15,000,000" to "$23,000,000".

        SECTION 2.   Conditions  to  Effectiveness.  The amendments set forth in
Section 1 of this Amendment shall become effective only upon the satisfaction of
all of the following  conditions precedent (the date of satisfaction of all such
conditions being referred to as the "Amendment Effective Date"):



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               (a)  On or before the Amendment  Effective Date, CITBC shall have
received this Amendment, duly executed and delivered by the Borrower.

               (b)  On or before the Amendment Effective Date, all corporate and
other  proceedings  taken  or to be taken in  connection  with the  transactions
contemplated by this Amendment,  and all documents incidental thereto,  shall be
reasonably  satisfactory  in form and  substance to CITBC and its  counsel,  and
CITBC and such counsel  shall have  received all such  counterpart  originals or
certified copies of such documents as they may reasonably request.

               (c)  On or before the Amendment  Effective Date, CITBC shall have
received a legal documentation fee of $1,500, which fee shall be fully earned as
of the date hereof.

               (d)  Each of the representations and warranties set forth in this
Amendment shall be true and correct as of the Amendment Effective Date.

        SECTION 3.   Representations and Warranties. In order to induce CITBC to
enter into this Amendment and to amend the Existing  Financing  Agreement in the
manner provided in this Amendment, the Borrower represents and warrants to CITBC
as of the Amendment Effective Date as follows:

               (a) Power and Authority. The Borrower has all requisite corporate
power  and  authority  to  enter  into  this  Amendment  and to  carry  out  the
transactions  contemplated  by, and perform its obligations  under, the Existing
Financing  Agreement as amended by this Amendment  (hereafter referred to as the
"Amended Financing Agreement").

               (b)  Authorization  of Agreements.  The execution and delivery of
this  Amendment  by the Borrower and the  performance  of the Amended  Financing
Agreement by the Borrower have been duly authorized by all necessary action, and
this Amendment has been duly executed and delivered by the Borrower.

               (c)  Enforceability. The Amended Financing Agreement  constitutes
the legal, valid and binding obligation of the Borrower  enforceable against the
Borrower in accordance  with its terms,  except as may be limited by bankruptcy,
insolvency or other similar laws affecting the  enforcement of creditors  rights
in general.  The  enforceability of the obligations of the Borrower hereunder is
subject  to  general   principles   of  equity   (regardless   of  whether  such
enforceability is considered in a proceeding in equity or at law).

               (d)  No Conflict. The  execution  and delivery by the Borrower of
this  Amendment  and the  performance by the  Borrower of the Amended  Financing
Agreement  do not and will not (i)  contravene,  in any  material  respect,  any
provision  of any law,  regulation,  decree,  ruling,  judgment or order that is
applicable to the Borrower or its  properties or other assets,  (ii) result in a
breach  of  or  constitute  a  default  under  the  charter,   bylaws  or  other
organizational documents of the Borrower, or any material agreement,  indenture,
lease or instrument binding



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<PAGE>



upon the  Borrower  or its  properties  or other  assets or (iii)  result in the
creation or  imposition of any liens on its  properties  other than as permitted
under the Financing Agreement.

               (e)  Governmental Consents. No authorization or approval or other
action  by,  and no notice to or filing  with,  any  governmental  authority  or
regulatory  body is required for the due execution,  delivery and performance by
the Borrower of this Amendment.

               (f)  Representations  and Warranties in the Financing  Agreement.
The  Borrower   confirms   that  as  of  the   Amendment   Effective   Date  the
representations and warranties contained in Section 6 of the Financing Agreement
are (before and after giving effect to this  Amendment)  true and correct in all
material respects (except to the extent any such  representation and warranty is
expressly stated to have been made as of a specific date, in which case it shall
be true and  correct as of such  specific  date) and that no Default or Event of
Default has occurred and is continuing.

        SECTION 4.   Miscellaneous.

               (a)  Reference to and Effect on the Existing Financing Agreement.

                    (i) Except as specifically amended by this Amendment and the
documents executed and delivered in connection herewith,  the Existing Financing
Agreement  shall  remain in full  force and effect  and is hereby  ratified  and
confirmed.

                    (ii)  The  execution  and  delivery  of this  Amendment  and
performance of the Amended  Financing  Agreement  shall not, except as expressly
provided herein, constitute a waiver of any provision of, or operate as a waiver
of any right, power or remedy of CITBC under, the Existing  Financing  Agreement
or any agreement or document executed in connection therewith.

                    (iii) Upon the  conditions  precedent set forth herein being
satisfied,  this Amendment shall be construed as one with the Existing Financing
Agreement,  and the  Existing  Financing  Agreement  shall,  where  the  context
requires, be read and construed throughout so as to incorporate this Amendment.

               (b)  Fees and Expenses. The Borrower acknowledges that all costs,
fees and expenses  incurred in connection  with this  Amendment  will be paid in
accordance with Section 7, Paragraph 4 of the Existing Financing Agreement.

               (c)  Headings. Section and subsection  headings in this Amendment
are included for  convenience  of reference only and shall not constitute a part
of this Amendment for any other purpose or be given any substantive effect.

               (d)  Counterparts.  This Amendment may be executed in one or more
counterparts,  each of  which  shall  be  deemed  an  original  but all of which
together shall  constitute  one and the same  instrument.



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               (e)  Governing  Law.  This  Amendment  shall be  governed  by and
construed according to the laws of the State of California.

        IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment
as of the date first above written.

                                        SHARPER IMAGE CORPORATION, a Delaware
                                        corporation



                                           By:    Tracy Y. Wan
                                              -----------------------
                                           Name:  Tracy Y. Wan
                                               ------------------------
                                           Title: President, C.O.O
                                                -------------------------



                                           By:    Jeffrey P. Forgan
                                             ------------------------
                                           Name:  Jeffrey P. Forgan
                                               ------------------------
                                           Title: Senior C.F.O
                                                ------------------------



                                        THE CIT GROUP/BUSINESS CREDIT, INC., a
                                        New York corporation



                                           By:    Adrian Avalos
                                             ------------------------
                                           Name:  Adrian Avalos
                                               ------------------------
                                           Title: V.P.
                                                ------------------------





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