Exhibit 10.22


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

                           SHARPER IMAGE CORPORATION

                        WARRANT TO PURCHASE COMMON STOCK

                            Dated February 13, 1997

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

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

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

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

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

                    (c)  "Effective Date" - February 13, 1997;

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


                                       1.
<PAGE>


                    (e)  "Purchase   Price"  -  $3.50  per  share,   subject  to
                         adjustments pursuant to Section 3 hereof;

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

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

                    (h)  "Shares" - up to 50,000 Shares,  subject to adjustments
                         pursuant to Section 3 hereof; and

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

               2.   Exercise.

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

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

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

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


                                       2.
<PAGE>


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

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

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

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

                    (d) In the event, prior to the expiration of this Warrant by
exercise or by its terms,  the Company  shall  determine to take a record of the
Holders of its Common


                                       3.
<PAGE>


Stock for the purpose of determining  the  shareholders  entitled to receive any
share  dividend or other right which will cause any change or  adjustment in the
number,  amount,  price  or  nature  of the  shares  of  Common  Stock  or other
securities or assets  deliverable  on exercise of this Warrant  pursuant to  the
foregoing  provisions,  the Company shall give to the registered  Holder of this
Warrant at the  address  as may  appear on the books of the  Company at least 15
days' prior written notice to the effect that the Company intends to take such a
record. Such notice shall specify (i) the date as of which  such record is to be
taken,  (ii) the  purpose  for which such  record is to be taken,  (iii) and the
number,  amount,  price and nature of the Shares or other shares,  securities or
assets which will be  deliverable  on exercise of this Warrant  after the action
for which such record will be taken has been  completed.  Without  limiting  the
obligation  of the Company to provide  notice to the  registered  Holder of this
Warrant of any corporate  action  hereunder,  the failure of the Company to give
notice shall not invalidate such corporate action of the Company.

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

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

               4.   Restriction on Transfer.

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

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

                            (ii) this Warrant and the Shares  issuable  upon the
exercise of this Warrant are being  acquired for  investment and not with a view
to the distribution thereof and that, absent an effective registration statement
under the Securities  Act of 1933, as amended  (the "Securities Act"),  covering
the  disposition of the Shares issued or issuable upon exercise of this Warrant,
such Shares will not be sold, transferred,  assigned,  hypothecated or otherwise
disposed  of without  first  providing  the  Company  with an opinion of counsel
(which may be counsel for the Company) or other evidence,  reasonably acceptable
to  the  Company,   to  the  effect  that  such  sale,   transfer,   assignment,
hypothecation  or  other  disposal  will be  exempt  from the  registration  and
prospectus delivery requirements


                                       4.
<PAGE>


of the Securities Act and the registration or qualification  requirements of any
applicable state or foreign securities laws; and

                            (iii)  the  Holder  consents  to  the  making  of  a
notation in the Company's  books or giving to any transfer agent of this Warrant
or the  Shares  an order  to  implement  such  restrictions  on  transferability
described in subparagraph (ii) above.

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

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

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

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

                6.  Repurchase Right.

                    (a) Notwithstanding  anything herein to the contrary, in the
event the Holder of this Warrant provides notice of the exercise of this Warrant
to the Company  with  respect to any of the  Shares,  then,  in such event,  the
Company shall have the right (the


                                       5.
<PAGE>


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

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

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

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

                                       6.

<PAGE>


     act, with equity to both. The determination of the Fair Market Value by the
     Expert  shall be final,  binding,  and  conclusive  on the  Company and the
     Holder of this Warrant. All costs and expenses of the Expert shall be borne
     by the Company.

               7.   Registration Rights.

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

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

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

  

                                       7.
<PAGE>


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

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

                            (iii)  If  the   Company   is  unable  to  effect  a
     registration  pursuant to subsection  (i) of this Section 7(b), the Company
     shall be obligated,  upon 120 days' prior written  notice to the Company by
     the Holder of this Warrant,  to repurchase  this Warrant (the "Put Option")
     at a purchase price per share of Common Stock issuable upon exercise of the
     Warrant equal to the then existing  Current Market Price,  as determined in
     accordance  with  Section  6(b)(i)  and (ii)  hereof.  Notwithstanding  the
     foregoing,  the Holder of this Warrant shall be entitled to a determination
     of the  then existing  Current  Market Price (the "Put Option Price") prior
     to an election to exercise  its Put  Option;  provided,  however,  that the
     Holder  shall only be entitled to a  determination  of the Put Option Price
     under this Section 7 once during the Term of this Warrant.  Nothing  herein
     shall obligate the Holder of this Warrant to exercise its Put Option.

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

                            (i) To the extent permitted by law, the Company will
     indemnify and hold harmless the Holder,  any underwriter (as defined in the
     Securities  Act) for the Holder and each  person,  if any, who controls the
     Holder or  underwriter  within  the  meaning of the  Securities  Act or the
     Securities  Exchange Act of 1934, as amended (the "Exchange Act"),  against
     any losses,  claims,  damages,  or liabilities  (joint or several) to which
     they may become  subject  under the  Securities  Act or the Exchange Act or
     other federal or state law,  insofar as such losses,  claims,  damages,  or
     liabilities (or actions in respect  thereof) arise out of or are based upon
     any of the following  statements,  omissions or violations  (collectively a
     "Violation"):  (i) any untrue  statement or alleged  untrue  statement of a
     material  fact  contained in such  registration  statement,  including  any
     preliminary  prospectus  or  final  prospectus  contained  therein  or  any
     amendments or supplements thereto, (ii) the omission


                                       8.
<PAGE>


     or alleged  omission to state therein a material fact required to be stated
     therein,  or necessary to make the statements  therein not  misleading,  or
     (iii) any violation or alleged  violation by the Company of the  Securities
     Act, the Exchange Act, any state  securities  law or any rule or regulation
     promulgated  under  the   Securities  Act or the  Exchange Act or any state
     securities  law;  and the Company  will pay to the Holder,  underwriter  or
     controlling person any legal or other expenses  reasonably  incurred by one
     law firm  retained by them (or such  additional  law firms  retained by the
     Holder if such  Holder  reasonably  believes  there  exists a  conflict  of
     interest among them) in connection with investigating or defending any such
     loss, claim, damage,  liability,  or action;  provided,  however,  that the
     indemnity agreement contained in this subsection shall not apply to amounts
     paid in settlement of any  such loss, claim, damage,  liability,  or action
     if such  settlement is effected  without the consent of the Company  (which
     consent  shall not be  unreasonably  withheld),  nor shall the  Company  be
     liable in any such case for any such loss,  claim,  damage,  liability,  or
     action to the extent  that it arises  out of or is based  upon a  Violation
     which occurs in reliance  upon and in conformity  with written  information
     furnished  expressly for use in connection  with such  registration  by any
     such Holder, underwriter or controlling person.

                            (ii) To the extent permitted by law, the Holder will
     indemnify and hold harmless the Company, each of its directors, each of its
     officers who has signed the registration  statement,  each person,  if any,
     who  controls  the Company  within the meaning of the  Securities  Act, any
     underwriter,  any other investor  selling  securities in such  registration
     statement  and any  controlling  person  of any such  underwriter  or other
     investor,  against any losses,  claims,  damages,  or liabilities (joint or
     several) to which any of the foregoing persons may become subject under the
     Securities  Act or the Exchange Act or other federal or state law,  insofar
     as such losses,  claims,  damages,  or  liabilities  (or actions in respect
     thereto) arise out of or are based upon any Violation,  in each case to the
     extent (and only to the extent) that such Violation occurs in reliance upon
     and  in  conformity  with  written  information  furnished  by  the  Holder
     expressly for use in connection with such registration; and the Holder will
     pay, as incurred,  any legal or other expenses  reasonably  incurred by any
     person  intended  to  be  indemnified  pursuant  to  this  subsection,   in
     connection with investigating  or defending any such loss, claims,  damage,
     liability,  or action;  provided,  however,  that the  indemnity  agreement
     contained in this subsection  shall not apply to amounts paid in settlement
     of any such loss, claim, damage,  liability or action if such settlement is
     effected  without  the consent of the Holder,  which  consent  shall not be
     unreasonably withheld;  provided,  further, however, that in no event shall
     any  indemnity  under  this  subsection  exceed the net  proceeds  from the
     offering received by the Holder.

                            (iii) Promptly after receipt by an indemnified party
     under this Section of notice of the  commencement of any action  (including
     any  governmental  action),  such  indemnified  party  will,  if a claim in
     respect  thereof is to be made against any  indemnifying  party,  provide a
     written notice of the commencement  thereof to the  indemnifying  party and
     the indemnifying  party shall have the right to participate in, and, to the
     extent  the  indemnifying   party  so  desires,   jointly  with  any  other
     indemnifying  party similarly  noticed,  to assume the defense thereof with
     counsel mutually  satisfactory to the parties; provided,  however, that any
     indemnified party (together with all other indemnified parties which may be
     represented without conflict by one counsel) shall have the right to


                                       9.
<PAGE>


retain  one  separate  counsel,  with the fees  and  expenses  to be paid by the
indemnifying  party,  if  representation  of such  indemnified  party  would  be
inappropriate  due to actual  or  potential  differing  interests  between  such
indemnified  party and any  other  party  represented  by such  counsel  in such
proceeding.  The failure to deliver  written  notice to the  indemnifying  party
within a reasonable time of the commencement of any such action,  if prejudicial
to its ability to defend such action,  shall relieve such indemnifying  party of
any liability to the indemnified  party under this Section,  but the omission so
to deliver written notice to the  indemnifying  party will not relieve it of any
liability that it may have to any  indemnified  party  otherwise than under this
Section.

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

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

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

               9.  Rights; Notices.  Nothing  contained in this Warrant shall be
construed as  conferring  upon the Holder hereof the right to vote or to consent
or to receive notice as a shareholder in respect of any meetings of shareholders
for the  election  of  directors  or any  other  matter  or as having  any right
whatsoever as a shareholder of the Company. All notices, requests,  consents and
other  communications  hereunder shall be in writing and shall be deemed to have
been duly made when delivered or mailed by registered or certified mail, postage
prepaid, return receipt requested:

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

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

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


                                      10.
<PAGE>


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

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

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


                                      11.
<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/ Craig P. Womack
                                  ----------------------------------------------
                              Name: Craig P. Womack
                              Title: President, Chief Administrative Officer

                              By: /s/ Tracy Y. Wan
                                  ----------------------------------------------
                              Name: Tracy Y. Wan
                              Title: Sr. V.P., Chief Financial Officer

ACCEPTED AND AGREED:

CIT GROUP/BUSINESS CREDIT, INC.


/s/ Bonnie Schain
--------------------------------
Name: Bonnie Schain
Title: Assistant Vice President

                                    12.



<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.