EXHIBIT 10.33
SEAFIRST BANK
Member FDIC
BUSINESS LOAN AGREEMENT
THIS BUSINESS LOAN AGREEMENT ("AGREEMENT") IS MADE BETWEEN BANK OF AMERICA
NT&SA DBA SEAFIRST BANK ("BANK") AND OLYMPIC CASCADE FINANCIAL CORPORATION
("BORROWER") WITH RESPECT TO THE FOLLOWING:
PART A
I. TERM LOAN: Subject to the terms of this Agreement, Bank agrees to lend
to Borrower as follows:
(a) AMOUNT: $900,000-
(b) This loan matures on October 1, 1998
(c) INTEREST RATE: The Bank's Fixed Rate Index plus 300 basis points.
The interest rate shall be fixed for the term of the loan.
(d) INTEREST RATE BASIS: All interest will be calculated at the per
annum interest rate based on a 360-day year and applied to the
actual number of days elapsed.
(e) REPAYMENT: At the times and in amounts as set forth in note(s)
required under Part B Article 1 of this Agreement. Loan is subject
to an economic prepayment penalty.
(f) LOAN FEE: $2,000 payable when loan is funded. Loan fee is fully
earned and non-refundable upon execution of this Agreement.
(g) OTHER FEE(s) (IDENTIFY): None
(h) COLLATERAL: None
EXHIBIT 10.33
BUSINESS LOAN AGREEMENT
PART B
1. PROMISSORY NOTE(s). All loans shall be evidenced by promissory notes in
a form and substance satisfactory to Bank.
2. CONDITIONS TO AVAILABILITY OF LOAN/LINE OF CREDIT. Before Bank is
obligated to disburse/make any advance, or at any time thereafter which
Bank deems necessary and appropriate, Bank must receive all of the
following, each of which must be in form and substance satisfactory to
Bank ("loan documents"):
2.1 Original, executed promissory note(s);
2.2 Original executed security agreement(s) and/or deed(s) of trust
covering the collateral described in Part A;
2.3 All collateral described in Part A in which Bank wishes to have a
possessory security interest;
2.4 Financing statement(s) executed by Borrower;
2.5 Such evidence that Bank may deem appropriate that the security
interests and liens in favor of Bank are valid, enforceable, and
prior to the rights and interests of others except those consented
to in writing by Bank;
+ 2.6 The following guaranty(ies) in favor of the Bank: None
+ 2.7 Subordination agreement(s) in favor of Bank executed by: None
2.8 Evidence that the execution, delivery, and performance by Borrower
of this Agreement and the execution, delivery, and performance by
Borrower and any corporate guarantor or corporate subordinating
creditor of any instrument or agreement required under this
Agreement, as appropriate, have been duly authorized;
2.9 Any other document which is deemed by the Bank to be required from
time to time to evidence loans or to effect the provisions of this
Agreement;
2.10 If requested by Bank, a written legal opinion expressed to Bank, of
counsel for Borrower as to the matters set forth in sections 3.1
and 3.2, and to the best of such counsel's knowledge after
reasonable investigation, the matters set forth in sections 3.3,
3.5, 3.6, 3.7, 3.8 and such other matters as the Bank may
reasonably request;
2.11 Pay or reimburse Bank for any out-of-pocket expenses expended in
making or administering the loans made hereunder including without
limitation attorney's fees (including allocated costs of in-house
counsel);
EXHIBIT 10.33
COMPANY NAME
Business Loan Agreements - Part B
Page 2
3. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to
Bank, except as Borrower has disclosed to Bank in writing, as of the
date of this Agreement and hereafter so long as credit granted under
this Agreement is available and until full and final payment of all sums
outstanding under this Agreement and promissory notes that:
+3.1 Borrower is duly organized and existing under the laws of the state
of its organization as a:
General Limited Sole
X Corporation Partnership Partnership Proprietorship dba
--- --- --- --- ----
Borrower is properly licensed and in good standing in each state in
which Borrower is doing business and Borrower has qualified under,
and complied with, where required, the fictitious or trade name
statutes of each state in which Borrower is doing business, and
Borrower has obtained all necessary government approvals for its
business activities; the execution, delivery, and performance of
this Agreement and such notes and other instruments required herein
are within Borrower's powers, have been duly authorized, and, as to
Borrower and any guarantor, are not in conflict with the terms of
any charter, bylaw, or other organization papers of Borrower, and
this Agreement, such notes and the loan documents are valid and
enforceable according to their terms;
3.2 The execution, delivery, and performance of this Agreement, the
loan documents and any other instruments are not in conflict with
any law or any indenture, agreement or undertaking to which
Borrower is a party or by which Borrower is bound or affected;
3.3 Borrower has title to each of the properties and assets as
reflected in its financial statements (except such assets which
have been sold or otherwise disposed of in the ordinary course of
business), and no assets or revenues of the Borrower are subject to
any lien except as required or permitted by this Agreement,
disclosed in its financial statements or otherwise previously
disclosed to Bank in writing;
3.4 All financial information, statements as to ownership of Borrower
and all other statements submitted by Borrower to Bank, whether
previously or in the future, are and will be true and correct in
all material respects upon submission and are and will be complete
upon submission insofar as may be necessary to give Bank a true and
accurate knowledge of the subject matter thereof;
3.5 Borrower has filed all tax returns and reports as required by law
to be filed and has paid all taxes and assessments applicable to
Borrower or to its properties which are presently due and payable,
except those being contested in good faith;
3.6 There are no proceedings, litigation or claims (including unpaid
taxes) against Borrower pending or, to the knowledge of the
Borrower, threatened, before any court or government agency, and no
other event has occurred which may have a material adverse effect
on Borrower's financial condition;
EXHIBIT 10.33
COMPANY NAME
Business Loan Agreements - Part B
Page 3
3.7 There is no event which is, or with notice or lapse of time, or
both, would be, an Event of Default (as defined in Section 7) under
this Agreement;
3.8 Borrower has exercised due diligence in inspecting Borrower's
properties for hazardous wastes and hazardous substances. Except
as otherwise previously disclosed and acknowledged to Bank in
writing: (a) during the period of Borrower's ownership of
Borrower's properties, there has been no use, generation,
manufacture, storage, treatment, disposal, release or threatened
release of any hazardous waste or hazardous substance by any person
in, on, under or about any of Borrower's properties; (b) Borrower
has no actual or constructive knowledge that there has been any
use, generation, manufacture, storage, treatment, disposal, release
or threatened release of any hazardous waste or hazardous substance
by any person in, on, under or about any of Borrower's properties
by any prior owner or occupant of any of Borrower's properties; and
(c) Borrower has no actual or constructive notice of any actual or
threatened litigation or claims of any kind by any person relating
to such matters. The terms "hazardous waste(s)," hazardous
substance(s)," "disposal," "release," and "threatened release" as
used in this Agreement shall have the same meanings as set forth in
the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.,
the Superfund Amendments and Reauthorization Act of 1986, as
amended Pub. L. No. 99-499, the Hazardous Materials Transportation
Act, as amended, 49 U.S. C. Section 1801, et seq., the Resource
Conservation and Recovery Act, as amended, 49 U.S.C. Section 6901,
et seq., or other applicable state or federal laws, rules or
regulations adopted pursuant to any of the foregoing.
4. AFFIRMATIVE COVENANTS. So long as credit granted under this Agreement
is available and until full and final payment of all sums outstanding
under this Agreement and promissory note(s) Borrower will:
4.1 Use the proceeds of the loans covered by this Agreement only in
connection with Borrower's business activities and exclusively for the
following purposes: repay a loan made to Borrower by FAI Overseas LTD
on May 29, 1997.
4.2 Promptly give written notice to Bank of. (a) all litigation and claims
made or threatened affecting Borrower where the amount is $500,000 or
more; (b) any substantial dispute which may exist between Borrower and
any governmental regulatory body or law enforcement authority; (c) any
Event of Default under this Agreement or any other agreement with Bank
or any other creditor or any event which become an Event of Default;
and (d) any other matter which has resulted or might result in a
material adverse change in Borrower's financial condition or
operations;
EXHIBIT 10.33
COMPANY NAME
Business Loan Agreements - Part B
Page 4
4.3 Borrower shall as soon as available, but in any event within 120
days following the end of Borrower's fiscal years and within 45
days following the end of each quarter provide to Bank, in a form
satisfactory to Bank (including audited statements if required at
any time by Bank), such financial statements and other information
respecting the financial condition and operations of Borrower as
Bank may reasonably request;
4.4 Borrower will maintain in effect insurance with responsible insurance
companies in such amounts and against such risks as is customarily
maintained by persons engaged in businesses similar to that of
Borrower and all policies covering property given as security for the
loans shall have loss payable clauses in favor of Bank. Borrower
agrees to deliver to Bank such evidence of insurance as Bank may
reasonably require and, within thirty (30) days after notice from
Bank, to obtain such additional insurance with an insurer
satisfactory to the Bank;
4.5 Borrower will pay all indebtedness taxes and other obligations for
which the Borrower is liable or to which its income or property is
subject before they shall become delinquent, except any which is
being contested by the Borrower in good faith;
4.6 Borrower will continue to conduct its business as presently
constituted, and will maintain and preserve all rights, privileges
and franchises now enjoyed, conduct Borrower's business in an
orderly, efficient and customary manner, keep all Borrower's
properties in good working order and condition, and from time to time
make all needed repairs, renewals or replacements so that the
efficiency of Borrower's properties shall be fully maintained and
preserved;
4.7 Brrower will maintain adequate books, accounts and records and
prepare all financial statements required hereunder in accordance
with generally accepted accounting principles and practices
consistently applied, and in compliance with the regulations of any
governmental regulatory body having jurisdiction over Borrower or
Borrower's business;
4.8 Brrower will permit representatives of Bank to examine and make
copies of the books and records of Borrower and to examine the
collateral of the Borrower at reasonable times;
4.9 Borrower will perform, on request of Bank, such acts as may be
necessary or advisable to perfect any lien or security interest
provided for herein or otherwise carry out the intent of this
Agreement;
4.10 Borrower will comply with all applicable federal, state and municipal
laws, ordinances, rules and regulations relating to its properties,
charters, businesses and operations, including compliance with all
minimum funding and other requirements related to any of Borrower's
employee benefit plans;
EXHIBIT 10.33
COMPANY NAME
Business Loan Agreements - Part B
Page 5
4.11 Borrower will permit representatives of Bank to enter onto Borrower's
properties to inspect and test Borrower's properties as Bank, in its
sole discretion, may deem appropriate to determine Borrower's
compliance with section 5.8 of this Agreement; provided however, that
any such inspections and tests shall be for Bank's sole benefit and
shall not be construed to create any responsibility or liability on
the part of Bank to Borrower or to any third party.
5. NEGATIVE COVENANTS. So long as credit granted under this Agreement is
available and until full and final payment of all sums outstanding under
this Agreement and promissory note(s):
5.1 Borrower will not, during any fiscal year, expend or incur more than
$250,000 for any single fixed asset whether or not payable that fiscal
year or later under any purchase agreement or lease;
5.2 Borrower will not, without the prior written consent of Bank, purchase
or lease under an agreement for acquisition, incur any other
indebtedness for borrowed money, mortgage, assign, or otherwise
encumber any of Borrower's assets, nor sell, transfer or otherwise
hypothecate any such assets except in the ordinary course of business.
Borrower shall not guaranty, endorse, co-sign, or otherwise become
liable upon the obligations of others, except by the endorsement of
negotiable instruments for deposit or collection in the ordinary
course of business. For purposes of this paragraph, the sale or
assignment of accounts receivable, or the granting of a security
interest therein, shall be deemed the incurring of indebtedness for
borrowed money;
5.3 Borrower will not, without Bank's prior written consent, declare any
dividends on shares of its capital stock, or apply any of its assets
to the purchase, redemption or other retirement of such shares, or
otherwise amend its capital structure;
5.4 Borrower will not make any loan or advance to any person(s) or
purchase or otherwise acquire the capital stock, assets or obligations
of, or any interest in, any person, except: (a) commercial bank time
deposits maturing within one year, (b) marketable general obligations
of the United States or a State, or marketable obligations fully
guarantied by the United States, (c) short-term commercial paper with
the highest rating of a generally recognized rating service, (d) other
investments related to the Borrower's business. See Exhibit A.
5.5 Borrower will not liquidate or dissolve or enter into any
consolidation, merger, pool, joint venture, syndicate or other
combination, or sell, lease, or dispose of Borrower's business assets
as a whole or such as in the opinion of Bank constitute a substantial
portion of Borrower's business or assets;
5.6 Borrower will not engage in any business activities or operations
substantially different from or unrelated to present business
activities or operations; and
EXHIBIT 10.33
COMPANY NAME
Business Loan Agreements - Part B
Page 6
5.7 Borrower, and Borrower's tenants, contractors, agents or other parties
authorized to use any of Borrower's properties, will not use,
generate, manufacture, store, treat, dispose of, or release any
hazardous substance or hazardous waste in, on, under or about any of
Borrower's properties, except as previously disclosed to Bank in
writing as provided in section 3.8; and any such activity shall be
conducted in compliance with all applicable federal, state and local
laws, regulations and ordinances, including without limitation those
described in section 3.8.
6. WAIVER, RELEASE AND INDEMNIFICATION. Borrower hereby: (a) releases
and waives any claims against Bank for indemnity or contribution in
the event Borrower becomes liable for cleanup or other costs under any
of the applicable federal, state or local laws, regulations or
ordinances, including without limitation those described in section
3.8, and (b) agrees to indemnify and hold Bank harmless from and
against any and all claims, losses, liabilities, damages, penalties
and expenses which Bank may directly or indirectly sustain or suffer
resulting from a breach of (i) any of Borrower's representations and
warranties with respect to hazardous wastes and hazardous substances
contained in section 3.8, or (ii) section 5.8.
The provisions of this section 6 shall survive the full and final
payment of all sums outstanding under this Agreement and promissory
notes and shall not be affected by Bank's acquisition of any interest
in any of the Borrower's properties, whether by foreclosure or
otherwise.
7. EVENTS OF DEFAULT. The occurrence of any of the following events
("Events of Default") shall terminate any and all obligations on the
part of Bank to make or continue the loan and/or line of credit and,
at the option of Bank, shall make all sums of interest and principal
outstanding under the loan and/or line of credit immediately due and
payable, without notice of default, presentment or demand for payment,
protest or notice of non payment or dishonor, or other notices or
demands of any kind or character, all of which are waived by Borrower,
and Bank may proceed with collection of such obligations and
enforcement and realization upon all security which it may hold and to
the enforcement of all rights hereunder or at law:
7.1 The Borrower shall fail to pay when due any amount payable by it
hereunder on any loans or notes executed in connection herewith;
7.2 Borrower shall fail to comply with the provisions of any other
covenant, obligation or term of this Agreement for a period of fifteen
(15) days after the earlier of written notice thereof shall have been
given to the Borrower by Bank or Borrower or any Guarantor has
knowledge of an Event of Default or an event that can become an Event
of Default;
7.3 Borrower shall fail to pay when due any other obligation for borrowed
money, or to perform any term or covenant on its part to be performed
under any agreement relating to such obligation or any such other debt
shall be declared to be due and payable and such failure shall
continue after the applicable grace period;
EXHIBIT 10.33
COMPANY NAME
Business Loan Agreements - Part B
Page 7
7.4 Any representation or warranty made by Borrower in this Agreement or
in any other statement to Bank shall prove to have been false or
misleading in any material respect when made;
7.5 Borrower makes an assignment for the benefit of creditors, files a
petition in bankruptcy, is adjudicated insolvent or bankrupt,
petitions to any court for a receiver or trustee for Borrower or any
substantial part of its property, commences any proceeding relating to
the arrangement, readjustment, reorganization or liquidation under any
bankruptcy or similar laws, or if there is commenced against Borrower
any such proceedings which remain undismissed for a period of thirty
(30) days or, if Borrower by any act indicates its consent or
acquiescence in any such proceeding or the appointment of any such
trustee or receiver;
7.6 Any judgment attaches against Borrower or any of its properties for an
amount in excess of $500,000 which remains unpaid, unstayed on appeal,
unbonded, or undismissed for a period of thirty (30) days;
7.7 Loss of any required government approvals, and/or any governmental
regulatory authority takes or institutes action which, in the opinion
of Bank, will adversely affect Borrower's condition, operations or
ability to repay the loan and/or line of credit;
7.8 Failure of Bank to have a legal, valid and binding first lien on, or a
valid and enforceable prior perfected security interest in, any
property covered by any deed of trust or security agreement required
under this Agreement;
7.9 Borrower dies, becomes incompetent, or ceases to exist as a going
concern;
7.10 Occurrence of an extraordinary situation which gives Bank reasonable
grounds to believe that Borrower may not, or will be unable to,
perform its obligations under this or any other agreement between Bank
and Borrower; or
7.11 Any of the preceding events occur with respect to any guarantor of
credit under this Agreement, or such guarantor dies or becomes
incompetent, unless the obligations arising under the guaranty and
related agreements have been unconditionally assumed by the
guarantor's estate in a manner satisfactory to Bank.
8. SUCCESSORS; WAIVERS. Notwithstanding the Events of Default above, this
Agreement shall be binding upon and inure to the benefit of Borrower and
Bank, their respective successors and assigns, except that Borrower may
not assign its rights hereunder. No consent or waiver under this
Agreement shall be effective unless in writing and signed by the Bank
and shall not waive or affect any other default, whether prior or
subsequent thereto, and whether of the same or different type. No delay
or omission on the part of the Bank in exercising any right shall
operate as a waiver of such right or any other right.
9. ARBITRATION.
EXHIBIT 10.33
COMPANY NAME
Business Loan Agreements - Part B
Page 8
9.1 At the request of either Bank or Borrower any controversy or claim
between the Bank and Borrower, arising from or relating to this
Agreement or any Loan Document executed in connection with this
Agreement or arising from any alleged tort shall be settled by
arbitration in King County Washington. The United States Arbitration
Act will apply to the arbitration proceedings which will be
administered by the American Arbitration Association under its
commercial rules of arbitration except that unless the amount of the
claim(s) being arbitrated exceeds $5,000,000 there shall be only one
arbitrator. Any controversy over whether an issue is arbitrable shall
be determined by the arbitrator(s). Judgement upon the arbitration
award may be entered in any court having jurisdiction. The institution
and maintenance of any action for judicial relief or pursuit of a
provisional or ancillary remedy shall not constitute a waiver of the
right of either party, including plaintiff, to submit the controversy
or claim to arbitration if such action for judicial relief is
contested.
For purposes of the application of the statute of limitations the
filing of an arbitration as provided herein is the equivalent of
filing a lawsuit and the arbitrator(s) will have the authority to
decide whether any claim or controversy is barred by the statute of
limitations, and if so, to dismiss the arbitration on that basis. The
parties consent to the joinder in the arbitration proceedings of any
guarantor, hypothecator or other party having an interest related to
the claim or controversy being arbitrated.
9.2 Notwithstanding the provisions of Section 9.1, no controversy or claim
shall be submitted to arbitration without the consent of all parties
if at the time of the proposed submission, such controversy or claim
arises from or relates to an obligation secured by real property;
9.3 No provision of this Section 9 shall limit the right of the Borrower
or the Bank to exercise self-help remedies such as setoff, foreclosure
or sale of any collateral, or obtaining any ancillary provisional or
interim remedies from a court of competent jurisdiction before, after
or during the pendency of any arbitration proceeding. The exercise of
any such remedy does not waive the right of either party to request
arbitration. At Bank's option foreclosure under any deed of trust may
be accomplished by exercise of the power of sale under the deed of
trust or judicial foreclosure as a mortgage.
10. COLLECTION ACTIVITIES, LAWSUITS AND GOVERNING LAW. Borrower agrees to
pay Bank all costs and expenses (including reasonable attorney's fees
and the allocated cost for in-house legal services incurred by Bank), to
enforce this Agreement, any notes or any Loan Documents pursuant to this
Agreement, whether or not suit is instituted. If suit is instituted by
Bank to enforce this Agreement or any of these documents, Borrower
consents to the personal jurisdiction of the Courts of the State of
Washington and Federal Courts located in the State of Washington.
Borrower further consents to the venue of this suit, being laid in King
County, Washington. This Agreement and any notes and security
agreements entered into pursuant to this Agreement shall be construed in
accordance with the laws of the State of Washington.
EXHIBIT 10.33
COMPANY NAME
Business Loan Agreements - Part B
Page 9
11. ADDITIONAL PROVISIONS. Borrower agrees to the additional provisions set
forth immediately following this Section 11 or on any "Exhibit A"
attached to and hereby incorporated into Agreement. This Agreement
supersedes all oral negotiations or agreements between Bank and Borrower
with respect to the subject matter hereof and constitutes the entire
understanding and Agreement of the matters set forth in this Agreement.
11.1 If any provision of this Agreement is held to be invalid or
unenforceable, then (a) such provision shall be deemed modified if
possible, or if not possible, such provision shall be deemed
stricken, and (b) all other provisions shall remain in full force
and effect.
11.2 If the imposition of or any change in any law, rule, or regulation
guideline or the interpretation or application of any thereof by
any court of administrative or governmental authority (including
any request or policy whether or not having the force of law) shall
impose or modify any taxes (except U.S. federal, state or local
income or franchise taxes imposed on Bank), reserve requirements,
capital adequacy requirements or other obligations which would: (a)
increase the cost to Bank for extending or maintaining any loans
and/or line of credit to which this Agreement relates, (b) reduce
the amounts payable to Bank under this Agreement, such notes and
other instruments, or (c) reduce the rate of return on Bank's
capital as a consequence of Bank's obligations with respect to any
loan and/or line of credit to which this Agreement relates, then
Borrower agrees to pay Bank such additional amounts as will
compensate Bank therefor, within five (5) days after Bank's written
demand for such payment, which demand shall be accompanied by an
explanation of such imposition or charge and a calculation in
reasonable detail of the additional amounts payable by Borrower,
which explanation and calculations shall be conclusive, absent
manifest error.
10.3 Bank may sell participations in or assign this loan in whole or in
part without notice to Borrower and Bank may provide information
regarding the Borrower and this Agreement to any prospective
participant or assignee. If a participation is sold or the loan is
assigned the purchaser will have the right of set off against the
Borrower and may enforce its interest in the Loan irrespective of
any claims or defenses the Borrower may have against the Bank.
12. NOTICES. Any notices shall be given in writing to the opposite party's
signature below or as that party may otherwise specify in writing.
13. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW.
EXHIBIT 10.33
COMPANY NAME
Business Loan Agreements - Part B
Page 10
This Business Loan Agreement (Parts A and B) executed by the parties on
September 16, 1997. Borrower acknowledges having read all of the provisions
of this Agreement and Borrower agrees to its terms.
SEAFIRST BANK OLYMPIC CASCADE FINANCIAL CORPORATION
Metropolitan Wholesale Banking Team 5
By:__________________________ By:________________________________
G. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Chairman
Title: Vice President
Address: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, 4th Floor Address: ▇▇▇▇ - ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇ 98154 Suite 2200
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇ Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
EXHIBIT 10.33
EXHIBIT A
Loan Agreement
Olympic Cascade Financial Corporation
September 16, 1997
Additional Terms, Agreements and Conditions:
1. Borrower agrees that its subsidiaries, now owned or hereafter acquired,
will at all times maintain sufficient net capital per NASD rules 15c3-1
and IM-3130 to permit the advancing of cash, upstreaming of dividends,
or otherwise providing funds to the Borrower in an amount sufficient to
repay the loan.
2. Borrower pledges that its subsidiaries will own and maintain, in
aggregate, an inventory of marketable securities whose market value, as
recorded in their monthly FOCUS and quarterly 10-QSB reports, will not
fall below 120% of the outstanding loan balance, and that it will notify
the Bank if the value falls below 120% at any time during the life of
the loan.
3. Borrower will obtain prior approval from Bank for any subsidiary
acquisitions not to be funded with Borrower's common stock.
Olympic Cascade Financial Corporation
By:
-----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Chairman
EXHIBIT 10.33
BORROWING AGREEMENT
LOAN. By accepting this agreement from OLYMPIC CASCADE FINANCIAL
CORPORATION, a Delaware corporation ("Borrower"), the chief executive office
of which is located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. 98154. BANK
OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION DOING BUSINESS AS SEAFIRST
BANK (including its successors and/or assigns "Bank") promises to lend to
Borrower the principal amount of $900,000.00 (the "Loan") in a single advance
to be disbursed to Borrower.
PAYMENT. In return, Borrower promises to pay to the order of Bank the
principal amount of $900,000.00, plus interest at a fixed rate of 8.950% per
year, calculated on the basis of actual number of days elapsed over a year of
360 days (together the "Obligations"), to be paid as follows: in level
principal payments of $150,000.00 dollars each on the 1st day of each month,
beginning the 1st day of May, 1998; accrued interest is to be paid on the 1st
day of each month, beginning the 1st day of October, 1997 with all
outstanding principal and accrued interest to be paid in full on OCTOBER 1,
1998. Bank is authorized to automatically debit each required installment of
principal and/or interest from Borrower's checking account number ▇▇▇▇▇▇▇▇ at
Bank, or such other deposit account at Bank as Borrower may authorize in the
future. If a payment is 10 days or more late, Borrower, at Bank's option,
will be charged 5.000% of the regularly scheduled payment or $20.00,
whichever is greater. Borrower shall pay to Bank a loan fee of $2,000.00 upon
execution of this agreement.
COLLATERAL. Unsecured.
CONDITIONS. Bank shall have no obligation to advance funds to Borrower until:
* Borrower and every other party whose signature is required on this
agreement has signed this agreement.
* Bank has received proof satisfactory to Bank that all insurance required
under this agreement is in effect.
COVENANTS. Borrower shall deliver to Bank:
* Such other financial information as Bank may reasonably request from
time to time.
Borrower shall also:
* Maintain replacement value insurance on all tangible Collateral against
all risks, casualties, and losses through extended coverage or
otherwise, with such policy or policies naming Bank as loss payee, as
its interests may appear.
* Give Bank prompt written notice of any material adverse change in
Borrowers financial condition.
* Keep accurate and complete books, accounts, and records, and
during normal business hours, as often as Bank may
reasonably request, permit Bank's authorized agents or
employees to have access to Borrower's premises and
financial records, and to make copies or abstracts of such
records.
REMEDIES. If Borrower violates any promise of this agreement; or if any
guarantor of any of the Obligations shall violate any of its promises to
Bank; or Borrower defaults under any other agreement with Bank; or if
anything should happen which significantly impairs Borrower's financial
condition, the value of the Collateral, or Bank's prospects for repayment of
the Obligations, Bank may refuse to make any further advances of funds to
Borrower, may immediately demand payment in full of all Obligations (which,
at Bank's option, shall bear interest from the date of such demand at a rate
of 4% in excess of the rate otherwise applicable under this agreement), and
may use any one or more of its remedies given under this agreement or by the
laws of Washington State. Borrower shall, if demanded by Bank, pay all of
Bank's costs, expenses, and attorneys' fees (including the cost of in-house
counsel) incurred in collecting the Obligations, or arising out of the
transaction reflected by this agreement, which is governed by the laws of
Washington. If neither party elects or has the right to elect arbitration
under the following paragraph, any lawsuit relating to this agreement may be
brought in a court located in King County, Washington, or at Bank's option
where necessary to obtain jurisdiction over any Borrower, guarantor, or
Collateral.
ARBITRATION. Any dispute relating to this agreement (in contract or tort)
shall be settled by arbitration if requested by Bank, Borrower, or any other
party to the dispute (such as guarantor); PROVIDED, however, that both Bank
and Borrower must consent to a request for arbitration relating to an
obligation secured by real property or a marine vessel. The arbitration
proceedings shall be held in Seattle, Washington by the American Arbitration
Association under its commercial rules of arbitration, by a single
arbitrator. The United States Arbitration Act will apply. Judgment upon the
arbitration award may be entered in any court having jurisdiction.
Commencement of a lawsuit shall not constitute a waiver of the right of any
party to request arbitration if the lawsuit is contested. Likewise, any
party may exercise self-help remedies such as setoff, foreclosure,
repossession, or sale of any collateral before, after, or during arbitration
without waiving the right to request arbitration. At Bank's option,
foreclosure under a deed of trust may be made judicially (as a mortgage) or
nonjudicially (by power of sale).
DEFINITIONS. For purposes of this agreement, terms defined in the Washington
version of the Uniform Commercial Code, R.C.W. 62A.9-101, ET SEQ. ("UCC"),
and not otherwise defined in this agreement, shall have the meaning given in
the UCC; and an accounting term not otherwise defined in this agreement shall
have the meaning assigned to it under generally accepted accounting
principles.
AMENDMENTS. This agreement can only be amended in writing, signed by the
party to be bound by such amendment. If Borrower shall enter into, or has
entered into, other borrowing agreements with Bank, each such agreement shall
supplement the other, and Borrower must comply with each such agreement
independently, unless otherwise agreed in writing by Bank. ORAL AGREEMENTS
OR ORAL COMMITMENTS TO LOAN MONEY, TO EXTEND CREDIT, OR TO FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
This agreement is dated September 16, 1997
Bank: SEAFIRST BANK
By:
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Name:
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Title:
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Borrower: OLYMPIC CASCADE FINANCIAL CORPORATION
Signature:
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By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Title: CHAIRMAN & CEO
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