Document:

EXHIBIT 10.38

                                 FORM OF WARRANT

THIS WARRANT AND THE SHARES OF COMMON STOCK WHICH MAY BE PURCHASED UPON THE
EXERCISE OF THIS WARRANT HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT AND HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH SALE, OFFER,
PLEDGE OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF THE ACT AND OF ANY APPLICABLE STATE SECURITIES LAWS UNLESS SOLD
PURSUANT TO RULE 144 OF THE ACT.

                                                                          <DATE>

                      OLYMPIC CASCADE FINANCIAL CORPORATION

                          COMMON STOCK PURCHASE WARRANT

      THIS CERTIFIES THAT, for value received, <HOLDER>, is entitled, upon the
terms and subject to the conditions hereinafter set forth, at such times after
the date hereof as are set forth below, to acquire from Olympic Cascade
Financial Corporation, a Delaware corporation (the "Company"), in whole or, from
time to time, in part, up to <SHARES> fully paid and nonassessable shares of
Common Stock, $.02 par value, of the Company (the "Warrant Shares") at a
purchase price per share (the "Exercise Price") of $-----. Such number of
shares, type of security and Exercise Price are subject to adjustment as
provided herein, and all references to "Warrant Shares" and "Exercise Price"
herein shall be deemed to include any such adjustment or series of adjustments.
This Warrant is granted by the Company to the Holder pursuant to that certain
<OPERATING DOCUMENT>.

      The Warrant Shares shall vest immediately upon the Closing (as defined in
the <OPERATING DOCUMENT>).

      1. Term.

            (a) Commencement of Exercisability. Subject to the vesting
provisions described above and Section 4 below, the Warrant is exercisable, in
whole or in part, at any time and from time to time from the date hereof through
the Expiration Date (as defined in Section 1(b) below).

            (b) Termination and Expiration. If not earlier exercised, the
Warrant shall expire on the third (3rd) anniversary of the date hereunder (the
"Expiration Date"), subject to Section 4 below.

      2. Method of Exercise; Payment; Issuance of New Warrant. Subject to
Section 1 hereof, exercise of this Warrant shall be made, in whole or in part,
by the surrender of this Warrant (with the notice of exercise form attached
hereto as Exhibit A duly executed) at the principal office of the Company and by
the payment to the Company of an amount equal to the Exercise Price multiplied
by the number of Warrant Shares being purchased, which amount may be paid in
cash or by check. In the event of any exercise of the rights represented by this
Warrant, certificates for the Warrant Shares so purchased shall be delivered to
the Holder hereof within a reasonable time and, unless this Warrant has been
fully exercised or expired, a new Warrant representing that portion of the
Warrant Shares, if any, with respect to which this Warrant shall not then have
been exercised, shall also be issued to the Holder within such reasonable time.

      3. Stock Fully Paid; Reservation of Warrant Shares. All of the Warrant
Shares issuable upon the exercise of the rights represented by this Warrant
will, upon issuance and receipt of the Exercise Price therefor, be fully paid
and nonassessable, and free from all taxes, liens and charges with respect to
the issue thereof. During the period within which the rights represented by this
Warrant may be exercised, the Company shall at all times have authorized and
reserved for issuance a sufficient number of shares of Common Stock to provide
for the exercise of the rights represented by this Warrant.

      4. Adjustment of Exercise Price and Number of Shares of Warrant Shares.
Subject to the provisions of Section 2 hereof, the number and kind of securities
purchasable upon the exercise of this Warrant and the Exercise Price therefor
shall be subject to adjustment, from time to time, upon the occurrence of
certain events, as follows:

            (a) In the event the Company shall at any time following the date
hereof subdivide the outstanding shares of Common Stock, or shall issue a stock
dividend on its outstanding Common Stock, the number of shares of Common Stock
issuable upon exercise of this Warrant immediately prior to such subdivision or
to the issuance of such stock dividend shall be proportionately increased, and
the Exercise Price shall be proportionately decreased; and in the event the
Company shall at any time following the date hereof combine the outstanding
shares of Common Stock, the number of shares of Common Stock issuable upon
exercise of this Warrant immediately prior to such combination shall be
proportionately decreased, and the Exercise Price shall be proportionately
increased, effective at the close of business on the date of such subdivision,
stock dividend or combination, as the case may be.

            (b) If the Company is, following the date hereof, recapitalized
through the subdivision or combination of its outstanding shares of Common Stock
into a larger or smaller number of shares, the number of shares of Common Stock
for which this Warrant may be exercised shall be increased or reduced in the
same proportion as the increase or decrease in the outstanding shares of Common
Stock and the then applicable Exercise Price shall be adjusted by multiplying by
a fraction with a numerator equal to the number of shares of Common Stock
purchasable upon exercise hereof immediately prior to such subdivision or
combination and the denominator of which shall be the number of shares of Common
Stock purchasable immediately following such subdivision or combination.

                                      -2-
<PAGE>

            (c) Subject to Section 1 hereof, in the event of any consolidation
or merger of the Company with another entity in a bona fide transaction (i.e.,
not a mere recapitalization, reincorporation for the purpose of changing
corporate domicile, or similar transaction), at any time prior to the Expiration
Date, the Holder shall have the right upon exercise of this Warrant, to receive
the same kind and number of Warrant Shares and other securities, cash or other
property as would have been distributed to the Holder had the Holder exercised
this Warrant immediately prior to such consolidation or merger. Notwithstanding
the foregoing, in the event that the per share consideration price paid in the
bona fide transaction is lower than the then effective Exercise Price, this
Warrant shall expire without value upon consummation of the bona fide
transaction. 5. Fractional Shares. No fractional shares of Common Stock will be
issued in connection with any exercise hereunder, but in lieu thereof, the
Company shall make a cash payment therefor upon the basis of the Exercise Price
then in effect.

6. Transfer, Assignment or Loss of Warrant and Warrant Shares.

            (a) This Warrant and the Warrant Shares to be issued or issuable
upon exercise of this Warrant, may not be assigned or transferred except as
provided in this Section 6 and in accordance with and subject to the provisions
of the Securities Act of 1933, as amended, and the Rules and Regulations
promulgated thereunder (said Act and such Rules and Regulations being
hereinafter collectively referred to as the "Act"). Upon exercise of this
Warrant, the holder hereof shall confirm in writing, in the form of Exhibit B,
that the shares of Common Stock so purchased are being acquired for investment
and not with a view toward distribution or resale. Any purported transfer or
assignment made other than in accordance with this Section 6 shall be null and
void and of no force and effect.

            (b) Any assignment permitted hereunder shall be made by surrender of
this Warrant to the Company at its principal office with the Assignment Form
attached hereto as Exhibit C duly executed. In such event the Company shall,
upon payment by the Holder of any issuance or transfer tax incurred or to be
incurred by the Company with respect to such transfer, execute and deliver a new
Warrant in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled. This Warrant may be divided or combined
with other warrants which carry the same rights upon presentation thereof at the
principal office of the Company together with a written notice signed by the
Holder thereof, specifying the names and denominations in which new warrants are
to be issued. Upon any partial transfer, the Company will sign, issue and
deliver to the Holder a new Warrant with respect to any portion not so
transferred.

            (c) Upon receipt by the Company of evidence satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant (provided that an
affidavit of the Holder shall be satisfactory for such purpose), and of
indemnity satisfactory to it (provided that if the Holder is the original Holder
of this Warrant, its own indemnification agreement shall under all circumstances
be satisfactory, and no bond shall be required), and upon surrender and
cancellation of this Warrant, if mutilated, the Company will execute and deliver
a new Warrant of like tenor and date and any such lost, stolen, or destroyed
Warrant shall thereupon become void.

                                      -3-
<PAGE>

            (d) In order to ensure compliance with the restrictions referred to
herein, the Company may issue appropriate "stop transfer" instructions to its
transfer agent.

            (e) The Company shall not be required (i) to transfer on its books
the Warrant or any Warrant Shares that have been sold or otherwise transferred
in violation of any of the provisions of this Warrant or (ii) to treat as owner
of such Warrant Shares or to accord the right to vote or pay dividends to an
purchaser or other transferee to whom such Warrant Shares shall have been so
transferred.

      7. Representations and Covenants of the Holder. The Holder represents that
this Warrant and any Warrant Shares issued or issuable upon exercise of this
Warrant, to be received will be acquired for investment for its own account, not
as a nominee or agent, and not with a view to the sale or distribution of any
part thereof, and that it has no present intention of selling, granting any
participation in or otherwise distributing the same. Such Holder understands and
acknowledges that the offering of this Warrant, and any issuance of Common Stock
on conversion thereof, will not be registered under the Securities Act on the
ground that the sale provided for in this Agreement and the issuance of
securities hereunder is exempt from registration pursuant to Section 4(2) of the
Act, and that the Company's reliance on such exemption is predicated on the
Holder's representations set forth herein. Such Holder represents that it is
experienced in evaluating companies such as the Company, is able to fend for
itself in investments such as this one, and has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of its prospective investment in the Company.

      8. Rights of Stockholders. No holder of this Warrant shall be entitled, as
a Warrant holder, to vote or receive dividends or be deemed the holder of Common
Stock or any other securities of the Company which may at any time be issuable
on the exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the holder of this Warrant, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of stock, change of par
value or change of stock to no par value, consolidation, merger, conveyance, or
otherwise) or to receive notice of meetings, or to receive dividends or
subscription rights or otherwise until the Warrant shall have been exercised and
the Warrant Shares purchasable upon the exercise hereof shall have become
deliverable, as provided herein.

      9. Registration Rights. The shares of Common Stock obtained upon exercise
of this Warrant shall have the registration rights set forth in the Registration
Rights Agreement dated <DATE> and the term "Registrable Securities" as defined
in such Registration Rights Agreement shall include the Common Stock obtained
upon exercise of this Warrant.

      10. Notices, Etc. All notices and other communications from the Company to
the Holder shall be mailed by first class registered or certified mail, postage
prepaid, at such address as may have been furnished to the Company in writing by
the Holder.

                                      -4-
<PAGE>

      11. Governing Law, Headings. This Warrant shall be construed and enforced
in accordance with and governed by the laws of the State of New York. The
headings in this Warrant are for purposes of reference only, and shall not limit
or otherwise affect any of the terms hereof.

"COMPANY"

OLYMPIC CASCADE FINANCIAL CORPORATION

By:________________________________
Name: Mark Goldwasser
Title:  Chief Executive Officer

                                      -5-

<PAGE>

                                    EXHIBIT A

                               NOTICE OF EXERCISE

      TO: OLYMPIC CASCADE FINANCIAL CORPORATION

                  (i) The undersigned hereby elects to purchase ___________
shares of Common Stock pursuant to the terms of the attached Warrant, and
tenders herewith payment of the purchase price of such Common Stock in full.

                  (ii) Please issue a certificate or certificates representing
said Common Stock in the name of the undersigned or in such other name as is
specified below:

      Name:

      Address:

                  (iii) The undersigned hereby represents and warrants that the
aforesaid shares of Common Stock are being acquired for the account of the
undersigned for investment and not with a view to, or, for resale in connection
with the distribution thereof, and that the undersigned has no present intention
of distributing or reselling such shares.

      By:_______________________________

      Name:_____________________________

      Title:____________________________

      Date:_____________________________

                                      -6-
<PAGE>

                                    EXHIBIT B

                       INVESTMENT REPRESENTATION STATEMENT

PURCHASER:

COMPANY:   OLYMPIC CASCADE FINANCIAL CORPORATION

SECURITY:  COMMON STOCK

AMOUNT:

DATE:

      In connection with the purchase of the above-listed securities (the
"Securities"), I, the Purchaser, represent to the Company the following:

      (a) I am aware of the Company's business affairs and financial condition,
and have acquired sufficient information about the Company to reach an informed
and knowledgeable decision to acquire the Securities. I am purchasing these
Securities for my own account for investment purposes only and not with a view
to, or for the resale in connection with, any "distribution" thereof for
purposes of the Securities Act of 1933 (the "Securities Act").

      (b) I understand that the Securities have not been registered under the
Securities Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of my investment intent
as expressed herein. In this connection, I understand that, in the view of the
Securities and Exchange Commission (the "SEC"), the statutory basis for such
exemption may be unavailable if my representation was predicated solely upon a
present intention to hold these Securities for the minimum capital gains period
specified under tax statutes, for a deferred sale, for or until an increase or
decrease in the market price of the Securities, or for a period of one year or
any other fixed period in the future.

      (c) I further understand that the Securities must be held for at least one
(1) year under Rule 144 promulgated under the Securities Act, unless
subsequently registered under the Securities Act or unless an exemption from
registration is otherwise available. Moreover, I understand that the Company is
under no obligation to register the Securities except as set forth in the
Registration Rights Agreement. In addition, I understand that the certificate
evidencing the Securities will be imprinted with a legend which prohibits the
transfer of the Securities unless they are registered or such registration is
not required in the opinion of counsel for the Company.

      (d) I am aware of the provisions of Rule 144, promulgated under the
Securities Act, which, in substance, permits limited public resale of
"restricted securities" acquired, directly or indirectly, from the issuer
thereof (or from an affiliate of such issuer), in a non-public offering subject
to the satisfaction of certain conditions.

      (e) I am aware that the Securities involve a high degree of risk and that
I may suffer a total loss of my investment. I have been provided with the
Company's periodic reports filed with the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended (the "34 Act Filings"),
including the Company's most recently filed Annual Report on Form 10-K,
Quarterly Report on Form 10-Q and Proxy Statement on Schedule 14A . I have read
the information in such reports, including the information under the caption
"Risk Factors" contained in the Company's 34 Act Reports.

                                      -7-
<PAGE>

      (f) I further understand that in the event all of the requirements of Rule
144 are not satisfied, registration under the Securities Act, compliance with
Regulation A, or some other registration exemption will be required; and that,
notwithstanding the fact that Rule 144 is not exclusive, the Staff of the SEC
has expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant to
Rule 144 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective brokers who participate in such transactions do so
at their own risk.

         -----------------------------------
         Name of Purchaser

         -----------------------------------
         Signature of Authorized Signatory

         -----------------------------------
         Print Name and Title

         -----------------------------------
         Date

                                      -8-
<PAGE>

                                    EXHIBIT C

                                 ASSIGNMENT FORM

      FOR VALUE RECEIVED, _______________________________ hereby sells, assigns
and transfers unto ______________________________________________________ (Name
and Address) the right to purchase Warrant Shares represented by this Warrant to
the extent of ___________ shares and does hereby irrevocably constitute and
appoint ____________________________ __________________, attorney, to transfer
the same on the books of the Company with full power of substitution in the
premises.

         Dated: _______________ , ____

         By:__________________________

         Name:________________________

         Title:_______________________

                                      -9-EXHIBIT 10.39

                      FORM OF REGISTRATION RIGHTS AGREEMENT

      REGISTRATION RIGHTS AGREEMENT, dated as of ------------------, among
Olympic Cascade Financial Corporation (the "Company") and each of the purchasers
named on the signature pages hereto (individually, a "Purchaser" and
collectively, the "Purchasers").

      WHEREAS, in connection with that certain ------------------------, the
Company has agreed, upon the terms and subject to the conditions of
------------------------, to issue and sell to the Purchasers an aggregate of up
to (a) -------------- principal amount of -------- Senior Subordinated
Promissory Notes (the "Notes") and (b) warrants (the "Warrants") to purchase up
to ------------- shares of the Company's common stock, $0.02 par value per share
(the "Common Stock"), at an initial exercise price of $----- per share;

      WHEREAS, to induce the Purchasers to execute and deliver the
----------------, the Company has agreed to provide certain registration rights
with respect to the shares of Common Stock issuable upon exercise of the
Warrants (the "Registrable Securities") on the terms and conditions provided
herein;

      NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

      1. Piggyback Registration Statement. If, at any time, the Company proposes
to file any registration statement on Form S-3 or such other appropriate form in
accordance with the Securities Act of 1933, as amended (the "Securities Act")
for purposes of a public offering of securities of the Company (including, but
not limited to, registration statements relating to secondary offerings of
securities of the Company, but excluding registration statements relating to
employee benefit plans or with respect to corporate reorganizations or other
transactions under Rule 145 of the Securities Act or initial public offerings)
it will give written notice by facsimile or mail, at least five (5) days prior
to the filing of each registration statement, to the Purchasers of its intention
to do so. If the Purchaser notifies the Company within five (5) days after
receipt of any such notice of its or their desire to include any such securities
in such proposed registration statement, the Company shall afford the Purchasers
the opportunity to have any Registrable Securities registered under such
registration statement.

      2. Obligations of the Company. In connection with the filing of any
registration statement herein, the Company shall:

            2.1 Prepare and file with the Securities and Exchange Commission
(the "SEC") such amendments and supplements to such registration statement and
the prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such registration statement.

            2.2 Furnish to the Purchasers such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.

<PAGE>

            2.3 Use its commercially reasonable efforts to register and qualify
the securities covered by such registration statement under such other
securities or "blue sky" laws of such jurisdictions as shall be reasonably
requested by the Purchasers; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such states
or jurisdictions.

            2.4 Notify each Purchaser of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.

            2.5 Use its commercially reasonable efforts to cause all Registrable
Securities covered by such registration statement to be listed on each
securities exchange on which similar securities listed by the Company are then
listed.

      3. Obligations of the Purchasers.

            Each Purchaser of Registrable Securities shall furnish to the
Company such information regarding such Purchaser, the number of Registrable
Securities owned and proposed to be sold by it, the intended method of
disposition of such securities and any other information as shall be required to
effect the registration of such Purchaser's Registrable Securities, and
cooperate with the Company in preparing the registration statement and in
complying with the requirements of the Securities Act.

      4. Registration Expenses.

            The Company shall bear and pay all expenses incurred in connection
with any registration, filing or qualification of Registrable Securities,
including without limitation all registration, listing, filing and qualification
fees, printers and accounting fees, but excluding (i) underwriting discounts and
commissions relating to the Registrable Securities and (ii) legal fees and
disbursements of any and all counsel retained by the Purchasers.

      5. Suspension of Effectiveness.

            If the Company shall furnish to all Purchasers a certificate signed
by the President or Chief Executive Officer of the Company stating that, in the
good faith judgment of the Board of Directors of the Company, it is necessary to
suspend the effectiveness of any registration statement filed hereunder, the
Company shall have the right, exercisable two (2) times only in any consecutive
twelve (12) month period, to suspend the effectiveness of the registration
statement with respect to such offering for a period of not more than an
aggregate of ninety (90) days per suspension.

                                       2
<PAGE>

      6. Indemnification.

            6.1 To the extent permitted by law, the Company will indemnify each
Purchaser, its directors, officers, shareholders, employees, agents and
affiliates, legal counsel for the Purchasers, and each person controlling such
Purchaser within the meaning of the Securities Act, with respect to which
registration, qualification or compliance of Registrable Securities has been
effected pursuant to this Agreement, against any losses, claims, damages,
liabilities or actions in respect thereof (collectively, "Damages"), arising out
of or based on any untrue statement or alleged untrue statement of a material
fact contained in a Registration Statement filed pursuant hereto, prospectus
offering circular or other document, or any 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 any violation or alleged violation by
the Company of the Securities Act, the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or any state securities laws or any rule or
regulation promulgated under such laws and relating to action or inaction
required of the Company in connection with any such registration, qualification
or compliance; and the Company will pay each such Purchaser any legal and other
expenses reasonably incurred by them in connection with investigating or
defending any such claim, loss, damage, liability or action; provided, however,
that the indemnity contained in this Section 6.1 shall not apply to: (i) amounts
paid in settlement of any such Damages if settlement is effected without the
consent of the Company (which consent shall not unreasonably be withheld); (ii)
any such Damages arising out of or a based upon any untrue statement or omission
based upon information furnished to the Company by such Purchaser and stated to
be for use in connection with the offering of securities of the Company; or
(iii) any such Damages arising out of or based upon such Purchaser's failure to
deliver a copy of the registration statement or prospectus or any amendments or
supplements thereto.

            6.2 To the extent permitted by law, each Purchaser will, if
Registrable Securities held by such Purchaser are included in the securities as
to which such registration, qualification or compliance is being effected
pursuant to this Agreement, indemnify the Company, each of its directors,
officers, shareholders, employees, agents and affiliates, each legal counsel and
independent accountant of the Company, each person who controls the Company
within the meaning of the Securities Act, and each other such Purchaser, each of
its directors, officers, shareholders, employees, agents and affiliates, legal
counsel, and each person controlling such other Purchaser within the meaning of
the Securities Act, against all Damages arising out of or based upon arising any
untrue statement or alleged untrue statement of a material fact contained in a
registration statement filed pursuant hereto, prospectus offering circular or
other document, or any 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 any violation or alleged violation by such Purchaser of the
Securities Act, the Exchange Act, or any state securities laws or any rule or
regulation promulgated under such laws and relating to action or inaction
required of such Purchaser in connection with any such registration,
qualification or compliance; and such Purchaser will pay the Company or such
other Purchasers any legal and other expenses reasonably incurred by them in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case, to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission is made in such registration statement, prospectus, offering circular
or other document in reliance on and in conformity with information furnished to
the Company by such Purchaser and stated to be for use in connection with the
offering of securities of the Company; provided, however, that the indemnity
contained in this Section 6.2 shall not apply to amounts paid in settlement of
any such Damages if settlement is effected without the consent of such Purchaser
(which consent shall not unreasonably be withheld).

                                       3
<PAGE>

            6.3 Promptly after receipt by an indemnified party under this
Section 6 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 under this Section 6, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so chooses, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain one separate counsel, with the reasonable fees and
expenses to be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying 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 6, but the omission to
so 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 6.

            6.4 If the indemnification provided for in this Section 6 is held by
a court of competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, liability, claim, damage or expense referred to therein,
then the indemnifying party, in lieu of indemnifying such indemnified party
hereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such Damages in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand and of the
indemnified party on the other in connection with the statements or omissions
that resulted in such Damages as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

            6.5 The obligations of the Company and the Purchasers under this
Section 6 shall survive the completion of any offering of Registrable Securities
pursuant to a registration statement under this Agreement.

                                       4
<PAGE>

      7. Notices.

            7.1 Any notice or communication required or permitted hereunder
shall be given in writing and shall be made by hand delivery, by confirmed
facsimile, by overnight courier or by registered or certified mail, addressed
(i) if to a Purchaser, to such Purchaser's address as set forth on Schedule A
hereto, and (ii) if to the Company, to Olympic Cascade Financial Corporation,
875 North Michigan Avenue, Suite 1560, Chicago, IL 60611, facsimile number (312)
751-0769, Attn: Robert H. Daskal, with a copy to Littman Krooks LLP, 655 Third
Avenue, New York, NY 10017, facsimile number (212) 490-2990, Attn: Mitchell C.
Littman, Esq.

            7.2 All such notices and other communications shall be deemed to
have been delivered and received (i) in the case of personal delivery or
facsimile, on the date of such delivery, (ii) in the case of overnight courier,
on the business day after the date when sent, and (iii) in the case of
registered or certified mail, on the third business day following such mailing.

      8. Miscellaneous.

            8.1 This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York, without regard to the principles of the
conflict of laws thereof. The parties hereby irrevocably and unconditionally
consent to submit to the exclusive jurisdiction of the courts of the State of
New York located in New York County and any Federal court located within New
York County for any actions, suits or proceedings arising out of or relating to
this Agreement. The parties hereby irrevocably and unconditionally waive any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement in the courts of the State of New York located in New York
County or the courts of the United States of America located in New York County,
and hereby further irrevocably and unconditionally waive and agree not to plead
or claim in any such court that any such action, suit of proceeding brought in
any such court has been brought in an inconvenient forum.

            8.2 Any term of this Agreement may be amended and the observance of
any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of the Company and the Purchasers of a majority of the Registrable
Securities then outstanding. Any amendment or waiver effected in accordance with
this paragraph shall be binding upon each Purchaser of any Registrable
Securities then outstanding, each future Purchaser of all such Registrable
Securities, and the Company.

            8.3 Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto any rights, remedies,
obligations or liabilities under or by reason of this Agreement, excepts as
expressly provided herein.

            8.4 If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this
Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.

                                       5
<PAGE>

            8.5 The headings of the Sections of this Agreement are for
convenience and shall not by themselves determine the interpretation of this
Agreement.

            8.6 This Agreement constitutes the entire contract among the Company
and the Purchasers relative to the subject matter hereof and supersedes in its
entirety any and all prior agreements, understandings and discussions with
respect thereto.

            8.7 The Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK]

                                       6
<PAGE>

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

                                        COMPANY:

                                        OLYMPIC CASCADE FINANCIAL CORPORATION

                                        By:_____________________________________
                                           Name: Mark Goldwasser
                                           Title: Chief Executive Officer

                                        PURCHASERS:

                                        By:_____________________________________
                                           Name:
                                           Title:

                                       7
<PAGE>

                                   Schedule A

                                                          Number of
Purchaser Name                   Purchaser Address        Registrable Securities
--------------                   -----------------        ----------------------

                                       8

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