Document:

Unassociated Document

MAXIM

GROUP

January
20, 2005

Robert S.
Rosenschein

Chairman
and CEO

GuruNet
Corporation

441 Route
306

Wesley
Hills, NY 10952-1233

Dear Mr.
Rosenschein:

We are
pleased that GuruNet Corp. (“GuruNet” or the “Company”) has decided to retain
Maxim Group LLC (“Maxim”) to provide general financial advisory and investment
banking services to the Company as set forth herein. This letter agreement (this
“Agreement”) will confirm Maxim’s acceptance of such retention and set forth the
terms of our engagement.

1. Retention. The
Company hereby retains Maxim as its non-exclusive financial advisor and
investment banker to provide general financial advisory and investment banking
services, and Maxim accepts such retention on the terms and conditions set forth
in this Agreement. In such capacity, Maxim shall: (i) familiarize itself to the
extent appropriate and feasible, with the business, operations, properties,
financial condition, management and prospects of the Company; (ii) act, at the
Company’s request, as an underwriter or a placement agent in a public offering
or a private placement, respectively, (iii) advise the Company on matters
relating to its capitalization; (iv) evaluate alternative financing structures
and arrangements; (v) assist the Company in developing appropriate acquisition
criteria and identifying target industries; (vi) provide such other financial
advisory and investment banking services upon which the parties may mutually
agree. For the avoidance of doubt, the statements contained in this Section 1
regarding the services are preliminary in nature and subject to change and
definitive documentation to be agreed upon the Company and Maxim.

2. Information. In
connection with Maxim’s activities hereunder, the Company will cooperate with
Maxim and furnish Maxim upon request with all information regarding the
business, operations, properties, financial condition, management and prospects
of the Company (all such information so furnished being the “Information”) which
Maxim deems appropriate and will provide Maxim with access to the Company’s
officers, directors, employees, independent accountants and legal counsel. The
Company represents and warrants to Maxim that all Information made available to
Maxim hereunder will be complete and correct in all material respects and will
not contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements herein not misleading in light of
the circumstance under which such statements are or will be made. The Company
further represents and warrants that any projections and other forward-looking
information provided by it to Maxim will have been prepared in good faith and
will be based upon assumptions which, in light of the circumstances under which
there are made, are reasonable. The Company recognizes and confirms that Maxim
(i) will use and rely primarily on the Information and on information available
from generally recognized public sources in performing the services contemplated
by this Agreement without having independently verified the same; (ii) does not
assume responsibility for the accuracy or completeness of the Information and
such other information; and (iii) will not make an appraisal of any assets of
the Company. Any advice rendered by Maxim pursuant to this Agreement may not be
disclosed publicly without Maxim’s prior written consent nor may Maxim disclose
the same about the Company. Maxim hereby acknowledges that certain of the
Information received by Maxim may be confidential and/or proprietary, including
Information with respect to the Company’s technologies, products, business
plans, marketing, and other Information which must be maintained by Maxim as
confidential. Maxim agrees that it will not disclose such confidential and/or
proprietary Information to any other companies in the industry in which the
Company is involved, either during or after the term of the
Agreement.

3. Compensation. As
consideration for Maxim’s services pursuant to this Agreement, Maxim shall be
entitled to receive, the Company agrees to pay Maxim, the following
compensation:

The
Company shall pay Maxim a non-refundable monthly retainer fee of $5,000
commencing on the signing of this Agreement and payable on the first day of cash
subsequent month for the duration of the Agreement (as detailed in Section 8 of
the Agreement). The fees appearing on the Fee Schedule (as defined below) shall
be earned by and paid to Maxim by the Company in connection with the services
provided by Maxim.

Upon the
signing of this Agreement, the Company shall deliver to Maxim (or its designated
nominees) 100,000 warrants to purchase shares of the Company’s common stock (the
“Warrants”). The Warrants shall be exercisable at any time during the five-year
period commencing on the date hereof at an exercise price equal to $11.00. The
Warrants shall contain provisions, including, without limitation, those
pertaining to cashless exercise, anti-dilution protection and one demand and two
piggyback registration rights (subject to underwriter’s crowdout), contained in
the Warrant certificated delivered to the Company together with this
Agreement.

The
Company and Maxim acknowledge and agree that, in the course of performing
services hereunder, Maxim may provide advisory services as described in Section
1 as well as merger and acquisition advisory services and introduce the Company
to the third parties who may be interested in entering into a transaction with
the Company, including, without limitation, a merger, acquisition or sale of
stock or assets (in which the Company may be the acquiring or the acquired
entity), joint venture, strategic alliance or other similar transaction (any
such transaction, the “Transaction”).

The
Company agrees to compensate Maxim for the services provided in conjunction with
the Transaction pursuant to the financing fee terms as listed on Exhibit B
hereto, the “Fee Schedule”:

	(i)  	
      If
      the Company consummates the Transaction with the candidate initially in
      writing by Maxim or following the request by the Company from M&A
      services from Maxim, and for which Maxim is expressly engaged to act as
      one of the Company’s investment bankers to investigate, structure,
      negotiate and finance the Transaction, or

	(ii)  	
      If,
      during the term of this Agreement or within twelve 12 months from the
      effective date of the termination of this Agreement, the Company
      consummates a Transaction initially introduced in writing by Maxim, and
      Maxim is not engaged as the Company’s financial advisor, agent and/or
      investment banker in connection with such Transaction pursuant to Section
      6 hereof.

Such fees
shall be payable to Maxim in cash at the closing or closings of the Transaction
to which it relates, except as otherwise stated.

The
amount of consideration paid in a Transaction shall include, for purposes of
calculating such fee, all forms of consideration paid or received, directly or
indirectly, by the Company and/or its stockholders in such Transaction,
including, without limitation, cash, securities, notes or other evidences of
indebtedness, assumption of liabilities (whether by operation of law or
otherwise), or any combination thereof. If all or portion of the consideration
paid in the Transaction is other than cash or securities, then the value of such
non-cash consideration shall be the fair market value thereof on the date of the
Transaction is consummated as mutually agreed upon in good faith by the Company
and Maxim. If such non-cash consideration consists of common stock, options,
warrants or rights for which a public trading market existed prior to the
consummation for the Transaction, then the value of such securities shall be
determined based upon the closing or last sales price thereof on the date of the
consummation of the Transaction. If such non-cash consideration consists of
newly-issued, publicly-traded common stock, option, warrants or rights for which
no public trading market existed prior to the consummation of the Transaction,
then the value thereof shall be the average of the closing prices for the 30
trading days prior to the fifth trading day before the consummation of the
Transaction. In such event, the fee payable to Maxim pursuant to the Fee
Schedule shall be paid on the 35th trading
day subsequent to consummation of the Transaction. If no public market exists
for the common stock, options, warrants or other rights issued in the
Transaction, then the value thereof shall be as mutually agreed upon in good
faith by the Company and Maxim. If the non-cash consideration paid in the
Transaction consists of preferred stock or debt securities (regardless of
whether a public trading market existed for such preferred stock or debt
securities prior to consummation of the Transaction or exists thereafter), the
value thereof shall be the maximum liquidation value (without regard to accrued
dividends) of the preferred stock or the principal amount of the debt
securities, as the case may be.

Any
amounts payable by a purchaser to the Company, any stockholder of the Company or
an affiliate of either the Company or any stockholder of the Company in
connection with a non-competitive, employment, consulting, licensing, supply or
other agreement (payable by the Company if the Company is the acquiring entity)
shall be deemed to be part of the consideration paid in the Transaction. If all
or a portion of the consideration payable in connection with the Transaction
includes contingent future payments, then the Company shall pay to Maxim an
additional cash fee, determined in accordance with the Fee Schedule, as, when
and if such contingency payments are received. However, in the event of an
installment purchase at a fixed price and fixed time schedule, the Company
agrees to pay Maxim, upon consummation of the Transaction, an additional, cash
fee, determined in accordance with the Fee Schedule based upon the present value
of such installment payments using an annual discount rate of 10%. Maxim shall
be compensated with respect to any non-cash consideration in the same form of
the consideration. However, Maxim shall receive a minimum of $250,000 of any
such consideration in cash. If with respect to any non-cash consideration the
Company and Maxim are unable to agree on the fair market value thereof, then
such value shall be determined by submission of the question to a reputable
appraisal firm with experience valuing property of the nature of the subject
consideration acceptable to the Company and Maxim (the fees and expenses of whom
shall be borne equally by the Company and Maxim).

4. Expenses. In
addition to payment to Maxim of the compensation set forth in Section 3 hereof,
the Company shall promptly upon request from time to time reimburse Maxim for
all reasonable expenses (including, without limitation, fees and disbursements
of counsel and all travel and other out-of-pocket expenses) incurred by Maxim in
connection with its engagement hereunder. Maxim will provide the Company and
invoice and copies of receipts pursuant to its expenses and such expenses shall
not exceed $3,000 without prior written authorization of the
Company.

5. Indemnification. The
Company agrees to indemnify Maxim in accordance with the indemnification and
other provisions attached to this Agreement as Exhibit A. (the “Indemnification
Provisions”), which provisions are incorporated herein by reference and shall
survive the termination or expiration if this Agreement.

6. Future
Investment Banking Activities. Upon
successful completion by Maxim of any one of the following: (a) Qualifying
Private Placement (as that term in Section 6(d)), (b) Qualifying Public Offering
(as that term is defined in Section 6(c)), or (c) Qualifying Transaction (as
that term is defined in Section 6(e)), for a period of twelve (12) months (the
“Qualified Period”) from the closing of such transaction the Company will seek
to engage Maxim to act as its lead-or co-underwriter on a public offering the
company’s securities which GuruNet elects to consummate during that period, if
any, subject to the following:

	a)  	
      Maxim
      shall agree to perform such engagement on terms which are mutually
      acceptable to the Company and Maxim. The parties shall execute and deliver
      to each other a written engagement which will supplement the terms of this
      Agreement. The company shall not offer to retain nay other investment
      banking firm in connection with such public offering of securities on
      terms more favorable than those discussed with Maxim without offering to
      retain Maxim on such more favorable terms.

	b)  	
      Maxim
      is, in fact, capable of performing as the lead- or co-underwriter in the
      context of size and nature of the proposed public offering, and proposes
      terms, including anticipated offering price and net proceeds and dilution
      to the Company, and nature of syndication effort, which are mutually
      acceptable to the Company and Maxim.

	c)  	
      As
      used in this Agreement, a public offering of GuruNet’s securities for
      which Maxim acts as lead underwriter and sells at least 50% of the
      securities being offered to the investors introduced by Maxim, and in
      which the gross cash proceeds to the Company, after payment of underwriter
      fees and expenses, are at least $10,000,000, is hereafter referred to as a
      “Qualifying Public Offering”, unless the Company engages Maxim to
      underwrite a Qualifying Public Offering of smaller
size.

	d)  	
      As
      used in this Agreement, in the event that Maxim, as lead placement agent,
      completes a private placement for the Company, in which the gross cash
      proceeds to the Company, are at least $5,000,000, such a private placement
      shall be referred to as a “Qualifying Private Placement”, unless the
      Company engages Maxim to act as a placement agent for a Qualifying Private
      Placement of a smaller size.

	e)  	
      As
      used in this Agreement, an M&A Transaction of any Aggregate
      Transaction Value, is hereafter referred to as a “Qualifying
      Transaction”.

7. Other
Activities.  The
Company acknowledges that Maxim has been, and my in the future be, engaged to
provide services as an underwriter, placement agent, finder, advisor and
investment banker to other companies in the industry in which the Company is
involved. Subject to the confidentiality provisions of Maxim contained in
Section 2 hereof, the Company acknowledges and agrees that nothing contained in
this Agreement shall limit or restrict the right of Maxim or of any member,
manager, partner, officer, director, employee, agent or representative of,
investor in ,or to engage in, any other business, whether or not of a similar
nature to the Company’s business, nor to limit or restrict the right of Maxim to
render services of any kind to any other corporation, firm, individual or
association. Maxim may, but shall not be required to, present opportunities to
the Company.

8. Termination:
Survival of Provisions.
 The
minimum term of this Agreement is six (6) months (“Term”). Either Maxim or the
Company may terminate this Agreement at any time upon the 30-day prior written
notice to the other party. In the event of such termination, the Company shall
pay and deliver to Maxim (i) all compensation earned through the date of such
termination (“Termination Date”) pursuant to any provision of Section 3 hereof,
and (ii) all compensation which may be earned by Maxim after the Termination
Date pursuant to Section 3 hereof, and shall reimburse Maxim for all expenses
incurred by Maxim in connection with its services hereunder pursuant to Section
4 hereof. All such fees and reimbursements due to Maxim pursuant to the
immediately preceding sentence shall be paid to Maxim on or before the
Termination Date (in the event reimbursements are earned or owed as of the
Termination Date) or upon the closing of the Transaction or any applicable
portion thereof (in the event such fees are due pursuant to the terms of Section
3 thereof). Notwithstanding anything expressed or implied here in to the
contrary: (i) any Agreement entered into between Maxim and the Company may only
be terminated in accordance with the terms thereof, notwithstanding an actual or
purported termination of this Agreement, and (ii) the terms and provisions of
Sections 3, 4, 5 (including, but not limited to, the Indemnification Provisions
attached to this Agreement and incorporated herein by reference), 6, 7, 8, 9, 10
and 15 shall survive the termination of this Agreement.

9. Notes.
 All
notices provided hereunder shall be given in writing and either delivered
personally or by overnight courier service or sent by certified mail, return
receipt requested, or by facsimile transmission, if to Maxim, to Maxim Group
LLC, 405 Lexington Avenue, New York, NY 10174, Attention: Edward L. Rose, Esq.,
General Counsel, Fax No. (516) 364-1310, and if to the Company, to the address,
set forth on the first page of this Agreement. Any notice delivered personally
or by fax shall be deemed given by overnight courier shall be deemed given on
the next business day after delivery to the overnight courier, and any notice
given by certified mall shall be deemed given upon the second business day after
the certification thereof.

10. Governing
Law; Jurisdiction; Waiver of Jury Trial.
 This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be fully performed
therein, without regard to conflicts of law principles. The Company irrevocably
submits to the exclusive jurisdiction of any court of the State of New York or
the United States District Court for the Southern District of the State of New
York of the purpose of any suit, action or other proceeding uprising out of this
Agreement, or any of the agreements or transactions contemplated hereby, which
is brought by or against the Company, and agrees that service of process in
connection with any such suit, action or proceeding may be made upon the Company
in accordance with Section 9 hereof. The parties hereby expressly waive all
rights to trial by jury in any suit, action or proceeding arising under this
Agreement.

11. Amendments.
 This
Agreement may not be modified or amended except in a writing duly executed by
the parties hereto.

12. Headings. The
section headings in this Agreement have been inserted as a matter of reference
and are not part of this Agreement.

13. Successors
and Assigns. The
benefits of this Agreement shall inure to the parties hereto, their respective
successors and assigns and to the indemnified parties hereunder and their
respective successors and assigns, and the obligations and liabilities assumes
in this Agreement shall be binding upon the parties hereto and their respective
successors and assigns. Notwithstanding anything contained herein to the
contrary, neither Maxim nor the Company shall assign any of its obligations
hereunder without the prior written consent of the other party, which consent
shall not be unreasonably withheld.

14. No
Third Party Beneficiaries. This
Agreement does not create, and shall not be construed as creating, any rights
enforceable by any person or entity not a party hereto, except those entitled to
the benefits of the Indemnification Provisions. Without limiting the foregoing,
the Company acknowledges and agrees that Maxim is not being engaged as, and
shall not be deemed to be, an agent or fiduciary of the Company’s stockholders
or creditors or any other person by virtue of this Agreement or the retention of
Maxim hereunder, all of which are hereby expressly waived.

15. Waiver. Any
waiver or any breach of any of the terms or conditions of this Agreement shall
not operate as a waiver of any other breach of such terms or conditions or any
of the other term or condition, nor shall any failure to insist upon strict
performance or to enforce any provision hereof on any one occasion operate as a
waiver of such provision or of any other provision hereof or a waiver of the
right to insist upon strict performance or to enforce such provision on any
subsequent occasion. Any waiver must be in writing.

16. Counterparts. This
Agreement may be executed in any number or counterparts and by facsimile
transmission, each of which shall be deemed to be an original instrument, but
all of which taken together shall constitute one and the same agreement.
Facsimile signatures shall be deemed to be original signatures for all
purposes.

If the
foregoing correctly sets forth our agreement, please sign the enclosed copy of
this Agreement in the space provided below and return it to us.

Very
truly yours,

Maxim
Group, LLC

By:_________________________

Clifford
A. Teller

Managing
Director

By:___________________________

Anthony
J. Sarkis

Head of
Investment Banking

Agreed to
and accepted this 20
day of
January, 2005

GuruNet
Corp.

By:___________________________

Mr.
Robert S. Rosenchein

Chairman
and CEOTHIS 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.

                                                                   April 1, 2005

                      OLYMPIC CASCADE FINANCIAL CORPORATION

                          COMMON STOCK PURCHASE WARRANT

      THIS CERTIFIES THAT, for value received, TRIAGE PARTNERS LLC 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 FIFTY THOUSAND (50,000) 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 $1.25.
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.

      The Warrant Shares shall vest immediately upon their issuance by the
Company.

      1.    Term.

            (a) Commencement of Exercisability. Subject to the 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

<PAGE>

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.

            (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

                                      -2-
<PAGE>

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.

            (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

                                      -3-
<PAGE>

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. Piggy-back Registration Rights.

            (a) If the Company shall determine to prepare and file with the
Securities and Exchange Commission a registration statement relating to an
offering for its own account or the account of others under the Securities Act
of any of its equity securities, other than on Form S-4 or Form S-8 (each as
promulgated under the Securities Act) or their then equivalents relating to
equity securities to be issued solely in connection with any acquisition of any
entity or business or equity securities issuable in connection with the stock
option or other employee benefit plans, then the Company shall send to the
Holder a written notice of such determination and, if within 15 days after the
date of such notice, such Holder shall so request in writing delivered to the
Company, the Company shall include in such registration statement all or any
part of the Warrant Shares the Holder requests to be registered, subject to
customary underwriter cutbacks applicable to all holders of registration rights;
provided, that, the Company shall not be required to register any Warrant Shares
pursuant to this Section 9 that are eligible for resale pursuant to Rule 144(k)
or that are the subject of a then effective Registration Statement.

                                      -4-
<PAGE>

            (b) All expenses (other than underwriting discounts and commissions,
brokerage fees and applicable transfer taxes) incurred in connection with
registrations, filings or qualifications pursuant to this Section 9, including,
without limitation, all registration, filing and qualification fees, printers'
and accounting fees and fees and disbursements of counsel for the Company, shall
be borne by the Company. Further, the Company shall pay its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit or quarterly review, the expense of any liability insurance obtained by
the Company and the expenses and fees for listing or authorizing for quotation
the securities to be registered on each securities exchange, market or automated
quotation system on which any shares of Common Stock are then listed or quoted.

            (c) Each of the Company and the Holder shall indemnify the other
party hereto and their respective officers, directors, employees and agents
against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) by the indemnifying party of a material fact contained in any
prospectus or other document (including any related registration statement,
notification or the like) incident to any registration of the type described in
this Section 9, or any omission (or alleged omission) by the indemnifying party
to state in any such document a material fact required to be stated therein or
necessary to make the statements therein not misleading, and shall reimburse
such indemnified party for any legal and any other expenses reasonably incurred
in connection with investigating and defending any such claim, loss, damage,
liability or action; provided that no party will be eligible for indemnification
hereunder to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission based upon written
information furnished by such party for use in connection with such
registration.

            (d) The Holder shall furnish to the Company or the Underwriter, as
applicable, such information regarding the Holder and the distribution proposed
by it as the Company may reasonably request in connection with any registration
or offering referred to in this Section 9. The Holder shall cooperate as
reasonably requested by the Company in connection with the preparation of the
registration statement with respect to such registration, and for so long as the
Company is obligated to file and keep effective such registration statement,
shall provide to the Company, in writing, for use in the registration statement,
all such information regarding the Holder and its plan of distribution of the
Warrant Shares included in such registration as may be reasonably necessary to
enable the Company to prepare such registration statement, to maintain the
currency and effectiveness thereof and otherwise to comply with all applicable
requirements of law in connection therewith.

      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.

      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.

                                      -5-
<PAGE>

"COMPANY"

OLYMPIC CASCADE FINANCIAL CORPORATION

By:  /s/ Mark Goldwasser
     -------------------------
Name:  Mark Goldwasser
Title: Chief Executive Officer

                                      -6-
<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:
              ------------------------------------------------

                                      -7-
<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

                                      -8-
<PAGE>

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.

      (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

                                      -9-
<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:___________________________________________

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