Document:

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                                                                   EXHIBIT 10.34

April 22, 2004

Edward Schmults
2865 Union Street, Apartment #2
San Francisco, CA  94123

RE:   EMPLOYMENT TERMS

Dear Ed:

On behalf of RedEnvelope ("Company"), I am very pleased to offer you the
position of Senior Vice President of Operations on the following terms.

You will report directly to Alison May, President and Chief Executive Officer,
and will work in our San Francisco office. The position of Senior Vice President
of Operations is exempt. Your primary high-level duties in this position will
include the management of operations, sourcing and the distribution center. You
will also be responsible for any other projects or assignments as directed by
the President and Chief Executive Officer. At all times during employment with
the Company, you will devote your full energies, abilities and productive
business time to the performance of your job for the Company and will not engage
in any activity that would in any way interfere or conflict with the full
performance of any of your duties for the Company.

You will receive an annualized salary of $250,000, less applicable payroll
deductions and all required withholdings, in accordance with the Company's
regular payroll practices.

Commencing the month following your start date and while employed as a full-time
employee on the regular payroll of the Company, you will be eligible to
participate in the Company's standard benefits package. You will also be
eligible for the Company's standard PTO and holiday benefits. General
information regarding the Company's current benefit plans is attached. The
Company may modify or cancel benefits from time to time as it deems appropriate
in its sole discretion.

In addition, after hiring, we will recommend that the Board of Directors of the
Company ("Board") grant you an option to purchase 40,000 shares of the Company's
common stock. The specific characteristics, terms and conditions of the options
mentioned above, including the strike price and applicable vesting schedule,
will be set forth in the option plan and grant documentation to follow after
approval by the Board.

Your employment with the Company is for no specified duration and may be
terminated either by you or the Company at any time and for any reason
whatsoever, with or without cause or advance notice. The Company also retains
the right to make all other decisions concerning your employment (e.g., changes
to your position, title, level, responsibilities, compensation, job duties,
reporting structure, work location, work schedule, goals or any other managerial
decisions) at any time, with or without cause or advance notice, as it deems
appropriate in its sole discretion. This at-will employment relationship cannot
be changed except in writing

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Edward Schmults
April 22, 2004
Page 2

signed by you and the Company's Chief Executive Officer. If the Company
terminates your employment without cause, in exchange for you signing a general
release of any all claims, the Company will pay you six (6) months severance in
the total amount of $125,000.00, less applicable payroll deductions and all
required withholdings. This severance amount will be paid in biweekly
installments, less applicable payroll deductions and all required withholdings,
in accordance with the Company's regular payroll schedule, during the six
calendar months following the termination of your employment.

As used in this agreement, "cause" shall mean material nonperformance or
misconduct in the performance of your duties and responsibilities as an
employee, indictment for a felony or another crime involving fraud or
dishonesty, or theft or misappropriation of assets of the Company having more
than nominal value.

Your employment with the Company pursuant to this offer is contingent on you
signing the Company's standard employee confidentiality and invention assignment
agreement (attached) prior to your start date, providing satisfactory proof of
your right to work in the United States as required by law, and on the Company's
verification of your qualifications, background, experience and references. If
employed, you will comply at all times with all Company policies, rules and
procedures as they may be established, stated and/or modified from time to time
at the Company's sole discretion.

Prior to your first day of work with the Company, you will have previously
returned any confidential, proprietary or trade secret information belonging to
any prior employer and will not use such information in your employment with the
Company. You will also strictly adhere to the terms of any lawful restrictive
covenants entered into between you and any prior employers.

Except as specified below, to the fullest extent allowed by law, any and all
disputes, claims or controversies of any kind arising out of or related in any
way to hiring, employment or the termination of employment with the Company
(including without limitation any statutory or common law claims against the
Company or any of its agents or employees) shall be fully and finally resolved
through binding arbitration, before a neutral arbitrator, pursuant to the
California Arbitration Act, California Code of Civil Procedure section 1280, et
seq. You and the Company therefore waive any right to a jury trial on any such
claims or matters. Any arbitration between the parties will be conducted before
the American Arbitration Association ("AAA") in San Francisco, California, under
the AAA's then existing national rules for the resolution of employment
disputes, as modified in any respect necessary to comply with the requirements
of California law for enforcement of arbitration agreements regarding
employment-related disputes. This arbitration provision shall not apply to any
claims for injunctive or other similar equitable relief. Before commencing any
arbitration proceedings, any dispute between you and the Company or any of its
agents or employees shall first be submitted, in writing, to the Company's Human
Resource Officer (or if none, to the head of Finance & Accounting) for a good
faith attempt at resolution.

This letter sets forth the entire agreement between you and the Company on the
terms of your employment with the Company and supersedes any prior
representations, understandings, promises or agreements, whether oral or
written, by anyone regarding employment with the

Edward Schmults Offer

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Edward Schmults
April 22, 2004
Page 3

Company. The employment terms in this letter may only be modified in a writing
signed by both you and the Company's Chief Executive Officer.

If you wish to accept employment with the Company under the terms described
above, please sign and date this letter and return it to me on or before 5:00
p.m. PST on May 3, 2004. If you accept our offer, we would like you to start
with us on or before May 10, 2004 or as soon thereafter as possible.

Ed, we are excited for you to join our team and look forward to working with
you.

Sincerely,

RedEnvelope, Inc.

By:    /s/ ALISON MAY

Title: President and CEO

ACCEPTED AND AGREED:

EDWARD SCHMULTS

/s/ EDWARD SCHMULTS            4/22/04
Signature                      date

Edward Schmults Offer<PAGE>

                                                                   EXHIBIT 10.35

                                 April 29, 2004

VIA FACSIMILE ((415) 371-1134) AND FEDERAL EXPRESS

RedEnvelope, Inc.
201 Spear Street, Suite 300
San Francisco, CA  94105
Attention: Alison May, President and CEO

      RE:   WAIVERS UNDER AND AMENDMENT OF THE REVOLVING CREDIT AND SECURITY
            AGREEMENT DATED AS OF JUNE 13, 2003, BETWEEN REDENVELOPE, INC.
            ("BORROWER") AND CAPITALSOURCE FINANCE LLC, AS AGENT AND LENDER
            ("AGENT") (AS AMENDED, MODIFIED, SUPPLEMENTED AND/OR RESTATED TO
            DATE AND FROM TIME TO TIME, THE "AGREEMENT")

Dear Alison:

            Reference is hereby made to the Agreement. All capitalized terms
used herein without definition shall have the meanings ascribed to such terms in
the Agreement.

            Pursuant to Section 7.1 and paragraph 1 of Annex I of the Agreement,
Borrower was required to maintain minimum EBITDA of at least $3,100,000 as
measured on the last calendar day of the Borrower's accounting quarter ending on
or closest to March 31, 2004 (the "MARCH TEST DATE"). Borrower has informed
Agent that its EBITDA as measured on the March Test Date was $(1,631,000).
Borrower's failure to maintain such minimum required EBITDA constitutes an Event
of Default under the Agreement (the "EBITDA EXISTING DEFAULT").

            Pursuant to Section 7.1 and paragraph 2 of Annex I of the Agreement,
Borrower was required to maintain Inventory Percentages not exceeding 51%, 41%
and 42% respectively as measured on the last calendar day of each of the
Borrower's accounting months ending on or closest to January 31, 2004, February
28, 2004 and March 31, 2004, respectively (each, an "INVENTORY TEST DATE").
Borrower has informed Agent that its Inventory Percentage as measured on each
applicable Inventory Test Date was 56%, 55% and 49%, respectively. Borrower's
failure to maintain such maximum required Inventory Percentages constitute
Events of Default under the Agreement (collectively, the "INVENTORY EXISTING
DEFAULTS," and together with the EBITDA Existing Default, the "EXISTING
DEFAULTS").

            Pursuant to Section 8(i)(i) of the Agreement and the definition of
"Change of Control" in the Agreement, an Event of Default would occur if Hilary
Billings were to cease being employed as Brand Strategist of Borrower and not be
replaced within sixty (60) calendar days by an interim Brand Strategist and
within 180 calendar days by a permanent Brand Strategist, each to Agent's
satisfaction as determined in its Permitted Discretion. Borrower has informed
Agent that Hilary Billings is resigning from the Borrower and that Borrower does
not

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RedEnvelope, Inc.
April 29, 2004
Page 2

intend to replace her. Such resignation and failure to replace Hilary Billings
would be an Event of Default (the "ANTICIPATED DEFAULT").

            Subject to the terms of this waiver and amendment letter, (A) Agent
hereby waives the Existing Defaults and the Anticipated Default, and (B)
Borrower and Agent hereby amend the definition of "Change of Control" in the
Agreement by deleting clause (v)(A) of such definition in its entirety and
deleting the words "or (B)" in such definition such that what was clause (v)(B)
is now just clause (v) of said definition, provided that (i) Agent shall have
received the countersignatures of Borrower on this letter agreeing to the terms
of this waiver and amendment letter, (ii) all representations, warranties,
covenants and agreement of Borrower in the Agreement and Loan Documents shall be
true and correct in all material respects at and as of the date hereof as though
then made, except (A) to the extent of the changes caused by the transactions
expressly contemplated herein, and (B) for such representations and warranties
as by their terms expressly speak as of an earlier date, and (iii) there shall
be no Default or Event of Default under the Agreement or other Loan Documents
after giving effect to this waiver letter and the waiver contemplated hereby.

            In order to induce Agent to execute and deliver this waiver and
amendment letter, Borrower hereby represents and warrants that no Default or
Event of Default exists on the date hereof after giving effect to the waivers
and amendment contemplated hereby. In consideration of the foregoing, Borrower
hereby ratifies and confirms all of its Obligations pursuant to the Agreement
and other Loan Documents.

            Except as expressly set forth herein, (i) the Loan Documents remain
in full force and effect, (ii) this waiver and amendment letter shall not be
deemed to be a waiver, amendment or modification of, or consent to or departure
from, any provisions of any Loan Document or to be a waiver of any Default or
Event of Default under any Loan Document whether arising before or after the
date hereof (except for the specific waivers and amendment referenced above in
this waiver and amendment letter), and (iii) this waiver and amendment letter
shall not preclude the future exercise of any right, remedy, power or privilege
available to Agent whether under the Loan Documents or otherwise and shall not
be construed or deemed to be a satisfaction, novation, cure, modification,
amendment or release of the Note, Obligations or any Loan Document.

            This waiver and amendment letter (i) constitutes the entire
understanding of the parties with respect to the subject matter hereof, and any
other prior or contemporaneous agreements, whether written or oral, with respect
hereto are expressly superseded hereby, (ii) shall be governed by and construed
in accordance with the laws of the State of Maryland, and (iii) shall be binding
upon and inure to the benefit of the successors and assigns of the parties
hereto. This waiver and amendment letter may be executed in one or more
counterparts (which taken together shall constitute one and same instrument) and
by facsimile transmission, which facsimile signatures shall be considered
original executed counterparts.

            All representations and warranties made in this waiver and amendment
letter shall survive the execution and delivery of this waiver letter and no
investigation by Agent shall affect such representations or warranties or the
right of Agent to rely upon them.

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RedEnvelope, Inc.
April 29, 2004
Page 3

            Please indicate your consent to the terms and conditions of this
waiver and amendment letter by signature of your authorized officer in the space
indicated below.

                                     Very truly yours,

                                     CAPITALSOURCE FINANCE LLC

                                     By: /s/ JOSEPH TURITZ
                                       Name:  Joseph Turitz
                                       Title: General Counsel, Corporate Finance

ACKNOWLEDGED AND AGREED TO as of April 29, 2004

REDENVELOPE, INC.

By: /s/ ALISON L.MAY
Name:  Alison L. May
Title:  President & C.E.O.

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