EXHIBIT  10.24 WARRANT TO PURCHASE COMMON STOCK

THIS WARRANT AND THE SHARES  ISSUABLE UPON ITS EXERCISE HAVE NOT BEEN REGISTERED
UNDER THE  SECURITIES  ACT OF 1933, AS AMENDED (THE  "SECURITIES  ACT"),  OR THE
SECURITIES  LAWS OF ANY STATE IN RELIANCE  UPON  EXEMPTIONS  PROVIDED  UNDER THE
SECURITIES  ACT.  ACCORDINGLY,  THIS  WARRANT  MAY NOT BE SOLD,  TRANSFERRED  OR
HYPOTHECATED  IN THE ABSENCE OF AN EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE
SECURITIES  ACT OR AN  OPINION  OF COUNSEL  SATISFACTORY  TO THE  COMPANY TO THE
EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED. IN ADDITION, THIS WARRANT MAY NOT
BE SOLD,  TRANSFERRED,  ASSIGNED OR HYPOTHECATED  EXCEPT AS PROVIDED HEREIN. THE
SHARES  ISSUABLE  UPON EXERCISE OF THIS WARRANT ARE SUBJECT TO REPURCHASE BY THE
COMPANY ON THE TERMS AND SUBJECT TO THE CONDITIONS SET FORTH HEREIN.


                            SHARPER IMAGE CORPORATION

                        WARRANT TO PURCHASE COMMON STOCK

                               Dated April 6, 1998


         SHARPER IMAGE CORPORATION (the "Company")  certifies that, for valuable
consideration,  receipt of which is hereby acknowledged,  the Holder is entitled
to purchase  from the Company a number of shares of the  Company's  Common Stock
set forth in Section 1(h) hereof (the  "Shares") at the purchase price set forth
in Section 1(e) hereof.

         This Warrant and the Common Stock  issuable  upon  exercise  hereof are
subject to the terms and conditions hereinafter set forth:

         1. Definitions. As used in this Warrant, the following terms shall have
the following meanings:

                  (a)  "Common Stock" - Common Stock,  par value $.01 per share,
                       of the Company;

                  (b)  "Company"  -  Sharper  Image   Corporation,   a  Delaware
                       corporation;

                  (c)  "Effective Date" - April 6, 1998;

                  (d)  "Holder" - The CIT  Group/Business  Credit,  Inc.  or any
                       transferee thereof;

                  (e)  "Purchase   Price"  -  $4.125  per   share,   subject  to
                       adjustments pursuant to Section 3 hereof;
<PAGE>

                  (f)  "Subscription  Form" - the form  attached to this Warrant
                       as Exhibit "A";

                  (g)  "Warrant" - this  Warrant and any  warrants  delivered in
                       substitution or exchange therefor as provided herein;

                  (h)  "Shares" - up to 75,000  Shares,  subject to  adjustments
                       pursuant to Section 3 hereof; and 

                  (i)  "Expiration  Date" - five (5)  years  from the  Effective
                       Date. 

         2. Exercise.

                  (a) Time of  Exercise.  This Warrant may be exercised in whole
but not in part (and not as to a fractional share) at the office of the Company,
at any time,  commencing on the Effective  Date;  provided,  however,  that this
Warrant  shall expire and be null and void if not exercised in the manner herein
provided by 5:00 p.m., Pacific Standard Time, on the Expiration Date.

                  (b) Manner of  Exercise.  This Warrant is  exercisable  at the
Purchase Price,  payable in cash or by certified check,  payable to the order of
the  Company,  subject to  adjustment  as  provided  in  Section 3 hereof.  Upon
surrender  of this  Warrant with the annexed  Subscription  Form duly  executed,
together with payment of the Purchase  Price for the Shares  purchased  (and any
applicable  transfer taxes) at the Company's  principal  executive offices,  the
Holder shall be entitled to receive a certificate or certificates for the Shares
so purchased.

                  (c) Delivery of Stock  Certificates.  As soon as  practicable,
but not exceeding 30 days, after exercise of this Warrant,  the Company,  at its
expense,  shall cause to be issued in the name of the Holder (or upon payment by
the Holder of any applicable transfer taxes, the Holder's assigns) a certificate
or certificates for the number of fully paid and non-assessable  Shares to which
the Holder shall be entitled upon such exercise,  together with such other stock
or  securities or property or  combination  thereof to which the Holder shall be
entitled upon such exercise, determined in accordance with Section 3 hereof.

                  (d) Record  Date of Transfer  of Shares.  Irrespective  of the
date of  issuance  and  delivery  of  certificates  for any stock or  securities
issuable upon the exercise of this Warrant, each person (including a corporation
or partnership) in whose name any such certificate is to be issued shall for all
purposes  be deemed to have  become  the  holder of record of the stock or other
securities represented thereby immediately prior to the close of business on the
date on  which  (i) a duly  executed  Subscription  Form  containing  notice  of
exercise of this  Warrant,  (ii)  payment of the Purchase  Price,  and (iii) the
opinion or certificate  required by Section 4(a)(ii) of this Warrant is received
by the Company.

         3. Adjustments.  Except as otherwise  provided in this Section 3, after
each  adjustment of the Purchase Price pursuant to this Section 3, the number of
shares of Common Stock  purchasable  upon  exercise of this Warrant shall be the
number derived by dividing such adjusted  Purchase Price into the Purchase Price
in effect  immediately  prior to such  adjustment.  The Purchase  Price shall be
subject to adjustment as follows:

                                       2.
<PAGE>

                  (a) In the event,  prior to the  expiration of this Warrant by
exercise or by its terms, the Company shall issue any shares of its Common Stock
as a share dividend on its outstanding shares of Common Stock or shall subdivide
the  number  of  outstanding  shares of Common  Stock  into a greater  number of
shares,  then, in either of such events,  the Purchase Price per share of Common
Stock purchasable  pursuant to this Warrant in effect at the time of such action
shall be decreased proportionately and the number of shares purchasable pursuant
to this Warrant shall be increased proportionately. Conversely, in the event the
Company  shall  reduce the number of shares of its  outstanding  Common Stock by
combining such shares into a smaller number of shares,  then, in such event, the
Purchase Price per share  purchasable  pursuant to this Warrant in effect at the
time of such action shall be increased  proportionately and the number of shares
of Common  Stock at that time  purchasable  pursuant  to this  Warrant  shall be
decreased proportionately.  Any dividend paid or distributed on the Common Stock
in shares of any other  class of  capital  stock of the  Company  or  securities
convertible  into shares of Common Stock shall be treated as a dividend  paid in
Common  Stock to the extent  that  shares of Common  Stock are  issuable  on the
conversion thereof.

                  (b) In the event,  prior to the  expiration of this Warrant by
exercise  or by its  terms,  the  Company  merges or  consolidates  with or into
another  person or entity in which the Company is not the surviving  corporation
or entity or sells  all or  substantially  all of its  property,  or  dissolves,
liquidates or winds up its affairs, prompt, proportionate, equitable, lawful and
adequate  provision  shall  be made as part of the  terms  of any  such  merger,
consolidation, sale, dissolution, liquidation or winding up such that the Holder
of this Warrant may thereafter  receive,  on exercise  thereof,  in lieu of each
share of Common Stock of the Company  which the Holder would have been  entitled
to receive, the same kind and amount of any shares, securities, or assets as may
be issuable,  distributable or payable on any such merger, consolidation,  sale,
dissolution,  liquidation  or  winding  up with  respect to each share of Common
Stock of the Company; provided,  however, that, in the event of any such merger,
consolidation,  sale,  dissolution,  liquidation  or  winding  up,  the right to
exercise this Warrant shall terminate on a date fixed by the Company,  such date
to be not earlier than 5:00 p.m.,  Pacific  Standard  Time, on the 30th day next
succeeding the date on which notice of such termination of the right to exercise
this Warrant has been given by mail to the Holder thereof at such address as may
appear on the books of the Company.

                  (c)  Notwithstanding  the  provisions  of this  Section  3, no
adjustment of the Purchase  Price shall be made whereby such  Purchase  Price is
adjusted in an amount less than $.001 or until the aggregate of such adjustments
shall equal or exceed $.001.

                  (d) In the event,  prior to the  expiration of this Warrant by
exercise or by its terms,  the Company  shall  determine to take a record of the
Holders of its Common  Stock for the  purpose of  determining  the  shareholders
entitled  to receive  any share  dividend  or other  right  which will cause any
change or  adjustment  in the number,  amount,  price or nature of the shares of
Common  Stock or other  securities  or assets  deliverable  on  exercise of this
Warrant  pursuant to the  foregoing  provisions,  the Company  shall give to the
registered  Holder of this  Warrant at the address as may appear on the books of
the  Company  at least 15 days'  prior  written  notice to the  effect  that the
Company intends to take such a record. Such notice shall specify (i) the date as
of which such  record is to be taken,  (ii) the purpose for which such record is
to be taken,  (iii) and the  number,  amount,  price and nature of the Shares or
other shares, securities or

                                       3.
<PAGE>

assets which will be  deliverable  on exercise of this Warrant  after the action
for which such record will be taken has been  completed.  Without  limiting  the
obligation  of the Company to provide  notice to the  registered  Holder of this
Warrant of any corporate  action  hereunder,  the failure of the Company to give
notice shall not invalidate such corporate action of the Company.

                  (e) Before  taking any action which would cause an  adjustment
reducing  the  Purchase  Price  below the then par value of the shares of Common
Stock  issuable  upon  exercise  of this  Warrant,  the  Company  will  take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may  validly  and  legally  issue fully paid and  nonassessable
shares  of such  Common  Stock at such  adjusted  Purchase  Price.  

                  (f) Upon any  adjustment of the Purchase  Price required to be
made pursuant to this Section 3, the Company,  within 30 days thereafter,  shall
cause to be mailed to the  registered  Holder of this Warrant  written notice of
such adjustment setting forth the Purchase Price in effect after such adjustment
and the number of Shares or other shares,  securities or property  issuable upon
exercise of this Warrant,  and setting forth in reasonable  detail the method of
calculation and the facts upon which such  calculation is based. 

         4. Restriction on Transfer.

                  (a)  The  Holder,  by  its  acceptance   hereof,   represents,
warrants, covenants and agrees that:

                           (i) the  Holder has  knowledge  of the  business  and
affairs of the Company;

                           (ii) this  Warrant and the Shares  issuable  upon the
exercise of this Warrant are being  acquired for  investment and not with a view
to the distribution thereof and that, absent an effective registration statement
under the Securities Act of 1933, as amended (the  "Securities  Act"),  covering
the  disposition of the Shares issued or issuable upon exercise of this Warrant,
such Shares will not be sold, transferred,  assigned,  hypothecated or otherwise
disposed  of without  first  providing  the  Company  with an opinion of counsel
(which may be counsel for the Company) or other evidence,  reasonably acceptable
to  the  Company,   to  the  effect  that  such  sale,   transfer,   assignment,
hypothecation  or  other  disposal  will be  exempt  from the  registration  and
prospectus  delivery  requirements of the Securities Act and the registration or
qualification  requirements of any applicable state or foreign  securities laws;
and (iii) the Holder consents to the making of a notation in the Company's books
or  giving  to any  transfer  agent of this  Warrant  or the  Shares an order to
implement such  restrictions on  transferability  described in subparagraph (ii)
above.

                  (b) This Warrant (and any  successor or  replacement  warrant)
shall  bear the  certificate  shown on the  front  page  hereof  and the  Shares
issuable upon the exercise of this Warrant shall bear the following  legend or a
legend of similar import;  provided,  however, that such legend shall be removed
or  not  placed  upon  this  Warrant  or the  certificate  or  other  instrument
representing  the  Shares,  as the  case may be,  if such  legend  is no  longer
necessary to ensure compliance with the Securities Act:

                                       4.
<PAGE>

         "THESE  SHARES HAVE NOT BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF
         1933, AS AMENDED (THE "SECURITIES  ACT"), OR THE SECURITIES LAWS OF ANY
         STATE IN  RELIANCE  UPON THE  EXEMPTION  UNDER THE  SECURITIES  ACT AND
         EXEMPTIONS FROM REGISTRATION  AVAILABLE UNDER THE APPLICABLE SECURITIES
         LAWS OF ANY STATE.  ACCORDINGLY,  SUCH  SHARES MAY BE OFFERED  AND SOLD
         ONLY IF  REGISTERED  AND QUALIFIED  PURSUANT TO RELEVANT  PROVISIONS OF
         FEDERAL  AND  STATE  SECURITIES  LAWS  OR IF  AN  EXEMPTION  FROM  SUCH
         REGISTRATION OR QUALIFICATION IS APPLICABLE."

                  (c) This Warrant (and any  successor or  replacement  Warrant)
may not be sold, transferred,  assigned or hypothecated except to a wholly owned
subsidiary  of the Holder or to a parent  corporation  owning a majority  of the
outstanding  securities  of the  Holder  or to any  successor  of the  Holder in
connection  with a  merger,  sale or  consolidation  of the  Holder in which the
Holder is not the surviving entity.

         5.  Payment  of Taxes.  All Shares  issued  upon the  exercise  of this
Warrant shall be validly issued,  fully paid and  non-assessable and the Company
shall pay all taxes and other governmental  charges (other than income tax) that
may be imposed in respect of the issue or delivery  thereof.  The Company  shall
not be required,  however,  to pay any tax or other charge imposed in connection
with any  transfer  involved in the issue of any  certificate  for Shares in any
name other than that of the Holder  surrendered in connection  with the purchase
of such Shares,  and in such case the Company  shall not be required to issue or
deliver any stock certificate until such tax or other charge has been paid or it
has been established to the Company's  satisfaction  that no tax or other charge
is due.

         6. Repurchase Right.

                  (a)  Notwithstanding  anything herein to the contrary,  in the
event the Holder of this Warrant provides notice of the exercise of this Warrant
to the Company  with  respect to any of the  Shares,  then,  in such event,  the
Company  shall have the right (the  "Repurchase  Right"),  at its  election,  by
delivery to the Holder of this Warrant of written  notice of the exercise of the
Repurchase Right within thirty (30) days following the receipt by the Company of
the Repurchase Notice (the "Repurchase Notice"), to repurchase all (but not less
than all) of the Shares issued or to be issued in  connection  with the exercise
of this Warrant from the Holder or Holders thereof at a purchase price per share
of Shares  equal to the Current  Market  Price (as  defined  below) per share of
Common Stock (the "Repurchase  Price") determined as of the close of business on
the date on which such Shares are to be  repurchased as specified by the Company
in the  Repurchase  Notice  (which date shall be not less than five (5) nor more
than ten (10)  days  from the date of the  Repurchase  Notice  (the  "Repurchase
Date").  The  Repurchase  Price of the Shares to be  repurchased  by the Company
hereunder  shall be  payable  by the  Company  to the  holder or holders of such
Shares in immediately  available  funds on the Repurchase  Date specified in the
Repurchase Notice.

                  (b) The "Current Market Price" per share of Common Stock shall
be determined as follows:

                                       5.
<PAGE>

                           (i) if there  then  exists an active  public  trading
market for the  Company's  Common Stock,  the Current  Market Price shall be the
average  of the daily  market  prices of the  Common  Stock  over a period of 20
consecutive trading days prior to the day on which Current Market Price is being
determined.  The market  price for each such trading day shall be the average of
the closing prices on such day of the Common Stock on all domestic  exchanges on
which the Common Stock is then listed,  or, if there shall have been no sales on
any such  exchange on such day,  the average of the highest bid and lowest asked
prices on all such exchanges at the end of the such day, or, if the Common Stock
shall not be so listed,  the average of the  representative bid and asked prices
at the end of such trading day as reported by NASDAQ.

                           (ii) if there  then does not  exist an active  public
trading market or the Common Stock shall not be listed on any domestic  exchange
or quoted on NASDAQ, the Current Market Price shall be the Fair Market Value (as
defined  below) of the Common  Stock based upon the Fair Market Value of 100% of
the Company if the Company  were sold as a going  concern and without  regard to
any discount for lack of liquidity or as to whether the Company is then a public
or a private  company,  or on the basis that the relevant shares of Common Stock
do not constitute a majority or controlling interest in the Company and assuming
the exercise or conversion of all or warrants,  options,  convertible securities
or other  rights to  subscribe  for or  purchase  any shares of Common  Stock or
convertible  securities,  all as determined by an independent  financial  expert
(the "Expert"),  which such Expert shall be mutually agreed upon by the parties.
If the parties are unable to agree on an Expert,  then each party shall nominate
a nationally recognized  independent  investment firm, which such nominees shall
mutually appoint an Expert in their sole  discretion.  "Fair Market Value" shall
mean the  value  obtainable  upon a sale in an arm's  length  transaction  to an
unaffiliated third party under usual and normal circumstances,  with neither the
buyer nor the seller  under any  compulsion  to act,  with  equity to both.  The
determination  of the Fair Market Value by the Expert  shall be final,  binding,
and  conclusive  on the  Company and the Holder of this  Warrant.  All costs and
expenses of the Expert shall be borne by the Company. 

         7. Registration Rights.

                  (a) Right to Join in  Registration.  If, at any time  prior to
two years after the Expiration Date, the Company proposes to file a Registration
Statement  under the  Securities  Act  (other  than on Form S-4 or Form S-8,  or
similar or  replacement  forms)  seeking  registration  of any securities of the
Company  for sale for cash to the public  either for its own  account or for the
account of any holder of securities of the Company,  the Company shall  promptly
notify,  in  writing,  the  Holder of its  intention  to file such  Registration
Statement  and in  addition  to, and  independent  of, the  rights  afforded  by
subsection (b), will afford the Holder the  opportunity to request  inclusion in
such Registration  Statement of all of the Shares issuable upon exercise of this
Warrant. If the Holder desires to join in such Registration Statement, it shall,
within twenty (20) days after the receipt of such notice by the Company,  notify
the  Company,  in writing,  of the number of Shares it desires to include in any
such Registration Statement.  The Company shall cause to be registered under the
Securities  Act all of the Shares that the Holder has requested to be registered
except as provided below.

                                       6.
<PAGE>

         If the Holder  requests  inclusion  of any Shares in such  Registration
Statement and if such public  offering is to be  underwritten,  the Company will
request the  underwriters of the offering to purchase and sell such Shares.  The
right  of the  Holder  to  registration  pursuant  to this  subsection  shall be
conditioned  upon  the  Holder's  participation  in  such  underwriting  and the
inclusion  of  Shares  in the  underwriting  unless  otherwise  agreed to by the
Company. If the managing underwriter determines that marketing factors require a
limitation or complete exclusion of the number of shares to be underwritten, the
Company  shall so advise  the Holder and the other  persons  distributing  their
securities  through  such  underwriting,  and (i) Common Stock held (or issuable
upon conversion or exercise of securities  held) by any person who does not have
contractual  rights of  registration  shall first be excluded;  and (ii) if such
exclusion is not  sufficient,  Common Stock held (or issuable  upon  exercise of
securities  held) by any person  other  than the  Holder and Shares  held by the
Holder  shall be excluded to the extent  required to permit the number of Shares
held by the Holder and shares of Common  Stock held by such other  persons  that
may be included in the  registration  and underwriting to be allocated among the
Holder and such other persons in proportion,  as nearly as  practicable,  to the
number of Shares held by the Holder and shares of Common Stock held (or issuable
upon  conversion  or exercise of  securities  held) by such other persons at the
time of filing the Registration Statement.

                  (b) Form S-3 Registration.  In case the Company shall receive,
at any time  prior to two years  after the  Expiration  Date,  from the Holder a
written  request that the Company effect a registration  of Shares on a Form S-3
Registration  Statement and any related qualification or compliance with respect
to all or a part of the Shares, the Company will:

                           (i) as soon as practicable,  effect such registration
and all such  qualifications and compliances as may be so requested and as would
permit or facilitate the sale and distribution of all of such Holder's Shares as
are specified in such request; provided,  however, that the Company shall not be
obligated to effect any such registration,  qualification or compliance pursuant
to this  Section:  (i) if Form S-3 is not  available  for such  offering  by the
Holder;  (ii) if the Company shall furnish to the Holder a certificate signed by
the President of the Company  stating  that,  in the good faith  judgment of the
Board of Directors of the Company,  it would be  detrimental  to the Company and
its shareholders for such Form S-3 registration to be effective at such time, in
which event the Company shall have the right to defer the filing of the Form S-3
Registration  Statement  for a period of not more than 120 days after receipt of
the  request  of the Holder  under this  Section;  provided,  however,  that the
Company  shall not utilize this right more than once in any twelve month period;
or (iii) if the Company has,  within the twelve (12) month period  preceding the
date  of  such  request,  already  effected  one  registration  on  a  Form  S-3
Registration Statement for the Holder pursuant to this Section.

                           (ii) Subject to the foregoing, the Company shall file
a Form S-3  Registration  Statement  covering the Shares and other securities so
requested to be registered as soon as  practicable  after receipt of the request
of the Holder. 

                           (iii)  If  the   Company   is   unable  to  effect  a
registration  pursuant to subsection (i) of this Section 7(b), the Company shall
be obligated,  upon 120 days' prior written  notice to the Company by the Holder
of this  Warrant,  to  repurchase  this Warrant (the "Put Option") at a purchase
price per share of Common Stock  issuable  upon exercise of the Warrant equal to
the then existing Current Market Price, as determined in accordance with Section
6(b)(i)

                                       7.
<PAGE>

and (ii) hereof. Notwithstanding the foregoing, the Holder of this Warrant shall
be entitled to a  determination  of the then existing  Current Market Price (the
"Put Option  Price") prior to an election to exercise its Put Option;  provided,
however,  that the Holder shall only be entitled to a  determination  of the Put
Option Price under this Section 7 once during the Term of this Warrant.  Nothing
herein shall obligate the Holder of this Warrant to exercise its Put Option. 

                  (c) Indemnification. In the event any Shares are included in a
registration statement under this Section:

                           (i) To the extent  permitted by law, the Company will
indemnify  and hold  harmless  the Holder,  any  underwriter  (as defined in the
Securities Act) for the Holder and each person,  if any, who controls the Holder
or  underwriter  within the  meaning  of the  Securities  Act or the  Securities
Exchange  Act of 1934,  as amended  (the  "Exchange  Act"),  against any losses,
claims,  damages,  or  liabilities  (joint or  several) to which they may become
subject under the  Securities  Act or the Exchange Act or other federal or state
law,  insofar as such losses,  claims,  damages,  or liabilities  (or actions in
respect thereof) arise out of or are based upon any of the following statements,
omissions or violations  (collectively a "Violation"):  (i) any untrue statement
or alleged untrue  statement of a material fact  contained in such  registration
statement,  including any preliminary  prospectus or final prospectus  contained
therein or any amendments or supplements  thereto,  (ii) the omission or alleged
omission to state  therein a material  fact  required to be stated  therein,  or
necessary to make the statements therein not misleading,  or (iii) any violation
or alleged violation by the Company of the Securities Act, the Exchange Act, any
state securities law or any rule or regulation  promulgated under the Securities
Act or the Exchange Act or any state securities law; and the Company will pay to
the  Holder,  underwriter  or  controlling  person  any legal or other  expenses
reasonably  incurred by one law firm  retained by them (or such  additional  law
firms retained by the Holder if such Holder  reasonably  believes there exists a
conflict of interest among them) in connection with  investigating  or defending
any such loss, claim, damage, liability, or action; provided,  however, that the
indemnity agreement contained in this subsection shall not apply to amounts paid
in  settlement of any such loss,  claim,  damage,  liability,  or action if such
settlement is effected  without the consent of the Company  (which consent shall
not be unreasonably withheld),  nor shall the Company be liable in any such case
for any such loss,  claim,  damage,  liability,  or action to the extent that it
arises out of or is based upon a Violation  which occurs in reliance upon and in
conformity with written  information  furnished  expressly for use in connection
with such registration by any such Holder, underwriter or controlling person.

                           (ii) To the extent  permitted by law, the Holder will
indemnify  and hold  harmless the Company,  each of its  directors,  each of its
officers who has signed the  registration  statement,  each person,  if any, who
controls the Company within the meaning of the Securities Act, any  underwriter,
any other investor  selling  securities in such  registration  statement and any
controlling  person  of any such  underwriter  or other  investor,  against  any
losses,  claims,  damages, or liabilities (joint or several) to which any of the
foregoing  persons may become  subject under the  Securities Act or the Exchange
Act or other federal or state law, insofar as such losses,  claims,  damages, or
liabilities  (or actions in respect  thereto) arise out of or are based upon any
Violation,  in each  case to the  extent  (and  only to the  extent)  that  such
Violation  occurs in reliance  upon and in conformity  with written  information
furnished by the Holder expressly for use in connection with such  registration;
and the Holder will pay, as

                                       8.
<PAGE>

incurred, any legal or other expenses reasonably incurred by any person intended
to be indemnified pursuant to this subsection,  in connection with investigating
or defending any such loss,  claims,  damage,  liability,  or action;  provided,
however,  that the indemnity  agreement  contained in this subsection  shall not
apply to amounts paid in settlement of any such loss, claim,  damage,  liability
or action if such  settlement  is  effected  without  the consent of the Holder,
which consent shall not be unreasonably withheld;  provided,  further,  however,
that in no event  shall any  indemnity  under  this  subsection  exceed  the net
proceeds from the offering received by the Holder. 

                           (iii) Promptly after receipt by an indemnified  party
under this Section of notice of the  commencement  of any action  (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any  indemnifying  party,  provide a written notice of the
commencement  thereof to the indemnifying party and the indemnifying party shall
have the right to participate in, and, to the extent the  indemnifying  party so
desires,  jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties; provided,
however, that any indemnified party (together with all other indemnified parties
which may be represented  without  conflict by one counsel) shall have the right
to retain one  separate  counsel,  with the fees and  expenses to be paid by the
indemnifying  party,  if  representation  of such  indemnified  party  would  be
inappropriate  due to actual  or  potential  differing  interests  between  such
indemnified  party and any  other  party  represented  by such  counsel  in such
proceeding.  The failure to deliver  written  notice to the  indemnifying  party
within a reasonable time of the commencement of any such action,  if prejudicial
to its ability to defend such action,  shall relieve such indemnifying  party of
any liability to the indemnified  party under this Section,  but the omission so
to deliver written notice to the  indemnifying  party will not relieve it of any
liability that it may have to any  indemnified  party  otherwise than under this
Section.  

                           (iv) The  obligations  of the  Company and the Holder
under this Section shall  survive the  completion of any offering of Shares in a
registration  statement  under this Section,  and otherwise. 

                  (d) Expenses.  The Company shall bear all expenses incurred in
connection with all  registrations  of the Shares  effected  pursuant to Section
7(a) hereof and in connection with one registration effected pursuant to Section
7(b) hereof, in each case excluding any underwriting discounts or commissions.

         8.  Reservation of Common Stock. The Company shall at all times reserve
and keep available out of its  authorized  but unissued  shares of Common Stock,
solely for the  purpose of issuance  upon the  exercise  of this  Warrant,  such
number of shares of Common Stock as shall be issuable upon the exercise  hereof.
The Company covenants and agrees that, upon exercise of this Warrant and payment
of the Purchase  Price  thereof  pursuant to Section 2(b) hereof,  all Shares of
Common Stock issuable upon such exercise shall be duly and validly issued, fully
paid and non-assessable.

         9.  Rights;  Notices.  Nothing  contained  in  this  Warrant  shall  be
construed as  conferring  upon the Holder hereof the right to vote or to consent
or to receive notice as a shareholder in respect of any meetings of shareholders
for the  election  of  directors  or any other

                                       9
<PAGE>

matter or as having any right  whatsoever as a shareholder  of the Company.  All
notices,  requests,  consents  and other  communications  hereunder  shall be in
writing and shall be deemed to have been duly made when  delivered  or mailed by
registered or certified mail, postage prepaid, return receipt requested: 

                  (a) if to the  Holder,  to the address of such Holder as shown
on the books of the Company; or

                  (b) if to the Company, to its principal executive office.

         10.  Replacement  of  Warrant.  Upon  receipt  of  evidence  reasonably
satisfactory to the Company of the ownership of and the loss, theft, destruction
or mutilation of this Warrant and (in case of loss,  theft or destruction)  upon
delivery of an indemnity  agreement in an amount reasonably  satisfactory to the
Company,  or (in the case of mutilation)  upon surrender and cancellation of the
mutilated Warrant,  the Company will execute and deliver, in lieu thereof, a new
Warrant of like tenor.

         11.  Successors.  All the covenants,  agreements,  representations  and
warranties  contained  in this  Warrant  shall be binding  upon and inure to the
benefit  of  the  parties  hereto  and  their   respective   heirs,   executors,
administrators,  distributees,  successors  and  assigns. 

         12.  Change;  Waiver.  Neither  this Warrant nor any term hereof may be
changed,  waived,  discharged or terminated  orally but only by an instrument in
writing  signed by the party against which  enforcement  of the change,  waiver,
discharge or termination is sought.  

         13.  Headings.  The section  headings in this  Warrant are inserted for
purposes of convenience only and shall have no substantive effect. 



                                       10.
<PAGE>

         14. Law Governing. This Warrant shall for all purposes be construed and
enforced in accordance  with, and governed by, the internal laws of the State of
California, without giving effect to principles of conflict of laws.
    
         IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly  authorized  officer and this  Warrant to be dated as of the date first
above written.



                                        SHARPER IMAGE CORPORATION



                                     By: /s/ Tracy Y. Wan
                                             ------------
                                             Name:  Tracy Y. Wan
                                             Title: Senior Vice President,
                                                    Chief Financial Officer

                                     By: /s/ Craig P. Womack
                                             ---------------
                                             Name:  Craig P. Womack
                                             Title: President,
                                                    Chief Administrative Officer


ACCEPTED AND AGREED:

CIT GROUP/BUSINESS CREDIT, INC.


/s/ Adrian Avalos
    -------------
Name:  Adrian Avalos
Title: Loan Officer


                                       11.
<PAGE>

                                                                       EXHIBIT A

                                SUBSCRIPTION FORM

                    (To be Executed by the Registered Holder
                     if it Desires to Exercise this Warrant)

To Sharper Image Corporation:

                  The  undersigned  hereby  irrevocably  elects to exercise  the
right to purchase ___________ of the Shares covered by this Warrant according to
the  conditions  hereof and herewith makes payment of the Purchase Price in full
in accordance with Section 2(b) of the Warrant.

                  The undersigned  requests that certificates for such Shares be
issued in the name of:

                                                   PLEASE INSERT SOCIAL SECURITY
                                                   OR TAX IDENTIFICATION NUMBER:


________________________________________________________________________________
(Please print name and address)

________________________________________________________________________________

________________________________________________________________________________


Dated:  ___________  Signature:_________________________________________________

NOTICE:           The above  signature must  correspond with the name as written
                  within the Warrant in every particular,  without alteration or
                  enlargement or any change  whatsoever,  and if the certificate
                  representing  the Shares is to be  registered  in a name other
                  than that in which the Warrant is registered, the signature of
                  the Holder hereof must be guaranteed.

Signature Guaranteed:___________________________________________________________

SIGNATURE  MUST BE GUARANTEED BY A COMMERCIAL  BANK OR MEMBER FIRM OF ONE OF THE
FOLLOWING  STOCK  EXCHANGES:  NEW  YORK  STOCK  EXCHANGE,  PACIFIC  COAST  STOCK
EXCHANGE, AMERICAN STOCK EXCHANGE, OR MIDWEST STOCK EXCHANGE.