Exhibit 10.4

 

 

 

MEZZANINE GUARANTY OF RECOURSE OBLIGATIONS

 

made by

 

OVERSTOCK.COM, INC.,
as guarantor,

 

in favor of

 

LOANCORE CAPITAL MARKETS LLC

 

Dated as of March 6, 2020

 

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MEZZANINE GUARANTY OF RECOURSE OBLIGATIONS

 

This MEZZANINE GUARANTY OF RECOURSE OBLIGATIONS (this “Guaranty”), dated as of
March 6, 2020, made by OVERSTOCK.COM, INC., a Delaware corporation, having an
address at 799 West Coliseum Way, Midvale, Utah  84047 (“Guarantor”), in favor
of LOANCORE CAPITAL MARKETS LLC, a Delaware limited liability company (together
with its successors and assigns, hereinafter referred to as “Lender”), having an
address c/o LoanCore Capital, 55 Railroad Avenue, Suite 100, Greenwich,
Connecticut  06830.

 

R E C I T A L S:

 

A.    Pursuant to that certain Mezzanine Loan Agreement dated as of the date
hereof (as the same may be amended, modified, supplemented or replaced from time
to time, the “Loan Agreement”) between PEACE COLISEUM MEZZANINE, LLC, a Delaware
limited liability company (“Borrower”) and Lender, Lender has agreed to make a
loan (the “Loan”) to Borrower in an aggregate principal amount not to exceed
$13,000,000.00, subject to the terms and conditions of the Loan Agreement;

 

B.    As a condition to Lender’s making the Loan, Lender is requiring that
Guarantor execute and deliver to Lender this Guaranty; and

 

C.    Guarantor hereby acknowledges that Guarantor will materially benefit from
Lender’s agreeing to make the Loan;

 

NOW, THEREFORE, in consideration of the premises set forth herein and as an
inducement for and in consideration of the agreement of Lender to make the Loan
pursuant to the Loan Agreement, Guarantor hereby agrees, covenants, represents
and warrants to Lender as follows:

 

1.         Definitions.

 

(a)           All capitalized terms used and not defined herein shall have the
respective meanings given such terms in the Loan Agreement.

 

(b)           The term “Guaranteed Obligations” means (i) Borrower’s Recourse
Liabilities and (ii) from and after the date that any Springing Recourse Event
occurs, payment of all the Debt as and when the same is due in accordance with
the Loan Documents (and whether accrued prior to, on or after such date).

 

2.         Guaranty.

 

(a)           Guarantor hereby irrevocably, absolutely and unconditionally
guarantees to Lender the full, prompt and complete payment when due of the
Guaranteed Obligations.

 

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(b)           All sums payable to Lender under this Guaranty shall be payable on
demand and without reduction for any offset, claim, counterclaim or defense.

 

(c)           Guarantor hereby agrees to indemnify, defend and save harmless
Lender from and against any and all actual out-of-pocket fees, costs, losses,
liabilities, claims, causes of action, expenses and damages, including
reasonable attorneys’ fees and disbursements, which Lender may suffer or which
otherwise may arise by reason of Borrower’s failure to pay any of the Guaranteed
Obligations when due, irrespective of whether such fees, costs, losses,
liabilities, claims, causes of action, expenses or damages are incurred by
Lender prior or subsequent to (i) Lender’s declaring the Principal, interest and
other sums evidenced or secured by the Loan Documents to be due and payable or
(ii) the commencement or completion of a UCC Sale (as hereinafter defined) of
the Collateral (but only to the extent the Guaranteed Obligations arose prior to
such UCC Sale).

 

(d)           Guarantor agrees that no portion of any sums applied (other than
sums received from Guarantor in full or partial satisfaction of its obligations
hereunder), from time to time, in reduction of the Debt shall be deemed to have
been applied in reduction of the Guaranteed Obligations until such time as the
Debt has been paid in full, or Guarantor shall have made the full payment
required hereunder, it being the intention hereof that the Guaranteed
Obligations shall be the last portion of the Debt to be deemed satisfied.

 

3.         Representations and Warranties.  Guarantor hereby represents and
warrants to Lender as follows (which representations and warranties shall be
given as of the date hereof and shall survive the execution and delivery of this
Guaranty):

 

(a)           Organization, Authority and Execution.  Guarantor is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, and has all necessary power and authority to own its
properties and to conduct its business as presently conducted or proposed to be
conducted and to enter into and perform this Guaranty and all other agreements
and instruments to be executed by it in connection herewith.  This Guaranty has
been duly executed and delivered by Guarantor.

 

(b)           Enforceability.  This Guaranty constitutes a legal, valid and
binding obligation of Guarantor, enforceable against Guarantor in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally.

 

(c)           No Violation.  The execution, delivery and performance by
Guarantor of its obligations under this Guaranty has been duly authorized by all
necessary action, and do not and will not violate any law, regulation, order,
writ, injunction or decree of any court or governmental body, agency or other
instrumentality applicable to Guarantor, or result in a breach of any of the
terms, conditions or provisions of, or constitute a default under, or result in
the creation or imposition of any mortgage, lien, charge or encumbrance of any
nature whatsoever upon any of the assets of Guarantor pursuant to the terms of
Guarantor’s articles of incorporation any mortgage, indenture, agreement or
instrument to which Guarantor is a party or by which it or any of its properties
is bound.  Guarantor is not in default under any other guaranty which it has
provided to Lender.

 

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(d)           No Litigation.  There are no actions, suits or proceedings at law
or at equity, pending or, to Guarantor’s knowledge, threatened against or
affecting Guarantor which, if adversely determined, could reasonably be expected
to have a Material Adverse Effect.  Guarantor is not in default beyond any
applicable grace or cure period with respect to any order, writ, injunction,
decree or demand of any Governmental Authority which could reasonably be
expected to result in a Material Adverse Effect.

 

(e)           Consents.  All consents, approvals, orders or authorizations of,
or registrations, declarations or filings with, all Governmental Authorities
(collectively, the “Consents”) that are required in connection with the valid
execution, delivery and performance by Guarantor of this Guaranty have been
obtained and Guarantor agrees that all Consents required in connection with the
carrying out or performance of any of Guarantor’s obligations under this
Guaranty will be obtained when required.

 

(f)            Financial Statements and Other Information.  All financial
statements of Guarantor heretofore delivered to Lender are true and correct in
all material respects and fairly present the financial condition of Guarantor as
of the respective dates thereof, and no materially adverse change has occurred
in the financial conditions reflected therein since the respective dates
thereof.  None of the aforesaid financial statements or any certificate or
statement furnished to Lender by or on behalf of Guarantor in connection with
the transactions contemplated hereby, and none of the representations and
warranties in this Guaranty contains any untrue statement of a material fact or
omits to state a material fact known to Guarantor necessary in order to make the
statements contained therein or herein not misleading.  Guarantor is not
insolvent within the meaning of the United States Bankruptcy Code or any other
applicable law, code or regulation and the execution, delivery and performance
of this Guaranty will not render Guarantor insolvent.

 

(g)           Consideration.  Guarantor is the owner, directly or indirectly, of
certain legal and beneficial equity interests in Borrower.

 

4.         Financial Statements.  Guarantor shall deliver to Lender, (a) within
120 days after the end of each fiscal year of Guarantor, a complete copy of
Guarantor’s annual financial statements audited by a “big four” accounting firm
or another independent certified public accountant reasonably acceptable to
Lender, (b) within 45 days after the end of each fiscal quarter of Guarantor,
financial statements (including (1) a balance sheet as of the end of such fiscal
quarter, (2) a statement of income and expense for such fiscal quarter, (3) a
statement of cash flow for such fiscal quarter and (4) a statement of change in
stockholders’ equity) certified by the chief financial officer of Guarantor and
in form, content, level of detail and scope reasonably satisfactory to Lender,
which certificate shall contain a statement that the requirements described in
Section 6 have been satisfied), and (c) 20 days after request by Lender, such
other financial information with respect to Guarantor as Lender may reasonably
request.  Notwithstanding the foregoing, Guarantor may satisfy the requirements
of (i) Section 4(a) herein by delivering to Lender copies of the Form 10-K, and
(ii) Section 4(b) herein by delivering to Lender copies of the Form 10-Q, in
each case of (i) or (ii), as applicable of Guarantor within the timeframes set
forth in this Section 4, so long as:  (1) Guarantor is subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended, or any
successor statute or statutes thereto (the “Exchange Act”), and (2) Guarantor
files its financial information with the U.S. Securities and Exchange Commission
as and when

 

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required by the Exchange Act and such financial information of Guarantor is
available to the public.

 

5.         Unconditional Character of Obligations of Guarantor.

 

(a)           The obligations of Guarantor hereunder shall be irrevocable,
absolute and unconditional, irrespective of the validity, regularity or
enforceability, in whole or in part, of the other Loan Documents or any
provision thereof, or the absence of any action to enforce the same, any waiver
or consent with respect to any provision thereof, the recovery of any judgment
against Borrower, Guarantor or any other Person or any action to enforce the
same, any failure or delay in the enforcement of the obligations of Borrower
under the other Loan Documents or Guarantor under this Guaranty, or any setoff,
counterclaim, and irrespective of any other circumstances which might otherwise
limit recourse against Guarantor by Lender or constitute a legal or equitable
discharge or defense of a guarantor or surety.  Lender may enforce the
obligations of Guarantor under this Guaranty by a proceeding at law, in equity
or otherwise, independent of any loan foreclosure, UCC Sale or similar
proceeding or any deficiency action against Borrower or any other Person at any
time, either before or after an action against the Collateral or any part
thereof, Borrower or any other Person.  This Guaranty is a guaranty of payment
and performance and not merely a guaranty of collection.  Guarantor waives
diligence, notice of acceptance of this Guaranty, filing of claims with any
court, any proceeding to enforce any provision of any other Loan Document,
against Guarantor, Borrower or any other Person, any right to require a
proceeding first against Borrower or any other Person, or to exhaust any
security (including, without limitation, the Collateral) for the performance of
the Guaranteed Obligations or any other obligations of Borrower or any other
Person, or any protest, presentment, notice of default or other notice or demand
whatsoever (except to the extent expressly provided to the contrary in this
Guaranty).

 

(b)           The obligations of Guarantor under this Guaranty, and the rights
of Lender to enforce the same by proceedings, whether by action at law, suit in
equity or otherwise, shall not be in any way affected by any of the following:

 

(i)    any insolvency, bankruptcy, liquidation, reorganization, readjustment,
composition, dissolution, receivership, conservatorship, winding up or other
similar proceeding involving or affecting Borrower, the Collateral or any part
thereof, Guarantor or any other Person;

 

(ii)   any failure by Lender or any other Person, whether or not without fault
on its part, to perform or comply with any of the terms of the Loan Agreement,
or any other Loan Documents, or any document or instrument relating thereto;

 

(iii)  except as otherwise provided in the Loan Agreement, the sale, transfer or
conveyance of the Collateral or any interest therein to any Person, whether now
or hereafter having or acquiring an interest in the Collateral or any interest
therein and whether or not pursuant to any foreclosure, UCC Sale or similar
proceeding against Borrower or the Collateral or any interest therein;

 

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(iv)  the conveyance to Lender, any Affiliate of Lender or Lender’s nominee of
the Collateral or any interest therein by a foreclosure, or similar proceeding
pursuant to Lender’s rights under the Pledge or any other Loan Documents and the
UCC (“UCC Sale”);

 

(v)   the release of Borrower or any other Person from the performance or
observance of any of the agreements, covenants, terms or conditions contained in
any of the Loan Documents by operation of law or otherwise; or

 

(vi)  the release in whole or in part of any collateral for any or all
Guaranteed Obligations or for the Loan or any portion thereof.

 

(c)           Except as otherwise specifically provided in this Guaranty,
Guarantor hereby expressly and irrevocably waives all defenses (excluding the
defense of payment or performance) in an action brought by Lender to enforce
this Guaranty based on claims of waiver, release, surrender, alteration or
compromise and all setoffs, reductions, or impairments, whether arising
hereunder or otherwise.

 

(d)           Lender may deal with Borrower and Affiliates of Borrower in the
same manner and as freely as if this Guaranty did not exist and shall be
entitled, among other things, to grant Borrower or any other Person such
extension or extensions of time to perform any act or acts as may be deemed
advisable by Lender, at any time and from time to time, without terminating,
affecting or impairing the validity of this Guaranty or the obligations of
Guarantor hereunder.

 

(e)           No compromise, alteration, amendment, modification, extension,
renewal, release or other change of, or waiver, consent, delay, omission,
failure to act or other action with respect to, any liability or obligation
under or with respect to, or of any of the terms, covenants or conditions of,
the Loan Documents shall in any way alter, impair or affect any of the
obligations of Guarantor hereunder, and Guarantor agrees that if any Loan
Document is modified with Lender’s consent, the Guaranteed Obligations shall
automatically be deemed modified to include such modifications.

 

(f)            Lender may proceed to protect and enforce any or all of its
rights under this Guaranty by suit in equity or action at law, whether for the
specific performance of any covenants or agreements contained in this Guaranty
or otherwise, or to take any action authorized or permitted under applicable
law, and shall be entitled to require and enforce the performance of all acts
and things required to be performed hereunder by Guarantor.  Each and every
remedy of Lender shall, to the extent permitted by law, be cumulative and shall
be in addition to any other remedy given hereunder or now or hereafter existing
at law or in equity.

 

(g)           No waiver shall be deemed to have been made by Lender of any
rights hereunder unless the same shall be in writing and signed by Lender, and
any such waiver shall be a waiver only with respect to the specific matter
involved and shall in no way impair the rights of Lender or the obligations of
Guarantor to Lender in any other respect or at any other time.

 

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(h)           At the option of Lender, Guarantor may be joined in any action or
proceeding commenced by Lender against Borrower in connection with or based upon
any other Loan Documents and recovery may be had against Guarantor in such
action or proceeding or in any independent action or proceeding against
Guarantor to the extent of Guarantor’s liability hereunder, without any
requirement that Lender first assert, prosecute or exhaust any remedy or claim
against Borrower or any other Person, or any security for the obligations of
Borrower or any other Person.

 

(i)            Guarantor agrees that this Guaranty shall continue to be
effective or shall be reinstated, as the case may be, if at any time any payment
is made by Borrower or Guarantor to Lender and such payment is rescinded or must
otherwise be returned by Lender (as determined by Lender in its sole and
absolute discretion) upon insolvency, bankruptcy, liquidation, reorganization,
readjustment, composition, dissolution, receivership, conservatorship, winding
up or other similar proceeding involving or affecting Borrower or Guarantor, all
as though such payment had not been made.

 

(j)            In the event that Guarantor shall advance or become obligated to
pay any sums under this Guaranty or in connection with the Guaranteed
Obligations or in the event that for any reason whatsoever Borrower or any
subsequent owner of the Collateral or any part thereof is now, or shall
hereafter become, indebted to Guarantor, Guarantor agrees that (i) the amount of
such sums and of such indebtedness and all interest thereon shall at all times
be subordinate as to lien, the time of payment and in all other respects to all
sums, including Principal and interest and other amounts, at any time owed to
Lender under the Loan Documents, and (ii) Guarantor shall not be entitled to
enforce or receive payment thereof until all Principal, interest and other sums
due pursuant to the Loan Documents have been paid in full.  Nothing herein
contained is intended or shall be construed to give Guarantor any right of
subrogation in or under the Loan Documents or any right to participate in any
way therein, or in the right, title or interest of Lender in or to any
collateral for the Loan, notwithstanding any payments made by Guarantor under
this Guaranty, until the actual and irrevocable receipt by Lender of payment in
full of all Principal, interest and other sums due with respect to the Loan or
otherwise payable under the Loan Documents.  If any amount shall be paid to
Guarantor on account of such subrogation rights at any time when any such sums
due and owing to Lender shall not have been fully paid, such amount shall be
paid by Guarantor to Lender for credit and application against such sums due and
owing to Lender.

 

(k)           Guarantor’s obligations hereunder shall survive a foreclosure, UCC
Sale or similar proceeding involving the Collateral and the exercise by Lender
of any or all of its remedies pursuant to the Loan Documents.

 

6.         Covenants.

 

(a)           As used in this Section 6, the following terms shall have the
respective meanings set forth below:

 

(i)    “GAAP” shall mean generally accepted accounting principles, consistently
applied.

 

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(ii)   “Liquid Assets” shall mean, as of a given date, the sum of Guarantor’s
consolidated assets comprised of Cash and Cash equivalents, determined in
accordance with GAAP and consistent with public disclosures.

 

(iii)  “Net Worth” shall mean, as of a given date, Guarantor’s consolidated
Total Stockholders’ Equity determined in accordance with GAAP and consistent
with public disclosures.

 

(b)           Until all of the Guaranteed Obligations have been paid in full,
Guarantor (i) shall maintain (A) a Net Worth in excess of $30,000,000.00 (the
“Net Worth Threshold”) and (B) Liquid Assets having a market value of at least
$3,000,000.00 (the “Liquid Assets Threshold”) and (ii) shall not sell, pledge,
mortgage or otherwise transfer any of its assets, or any interest therein, which
would cause Guarantor’s Net Worth to fall below the Net Worth Threshold or
Guarantor’s Liquid Assets to fall below the Liquid Assets Threshold.

 

(c)           Guarantor shall not, at any time while a default in the payment of
the Guaranteed Obligations has occurred and is continuing, beyond all applicable
notice and cure periods, either (i) enter into or effectuate any transaction
with any Affiliate which would reduce the Net Worth of Guarantor below the
amounts required above (including the payment of any dividend or distribution to
a shareholder, or the redemption, retirement, purchase or other acquisition for
consideration of any stock or interest in Guarantor) or (ii) sell, pledge,
mortgage or otherwise transfer to any Person any of Guarantor’s assets, if such
transaction would result in a breach of the requirements set forth above.

 

(d)           Guarantor shall do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its existence and all rights,
licenses, permits, franchises and all applicable governmental authorizations
necessary for the operation of its business and comply with all Legal
Requirements applicable to it and its assets.  Guarantor shall not engage in any
dissolution, liquidation or consolidation or merger with or into any other
business entity without obtaining the prior consent of Lender.

 

(e)           Guarantor shall give prompt notice to Lender of any litigation or
governmental proceedings pending or threatened against Guarantor which could
reasonably be expected to materially adversely affect Guarantor’s condition
(financial or otherwise) or business (including Guarantor’s ability to perform
the Guaranteed Obligations hereunder or under the other Loan Documents to which
it is a party).

 

(f)            Guarantor will use its good faith and commercially reasonable
efforts to comply with the Patriot Act and all applicable requirements of
Governmental Authorities having jurisdiction over Guarantor, including those
relating to money laundering and terrorism.

 

(g)           Guarantor shall, at Guarantor’s sole cost and expense:

 

(i)    cure any defects in the execution and delivery of the Loan Documents to
which Guarantor is a party and execute and deliver, or cause to be executed and
delivered, to Lender such documents, instruments, certificates, assignments and
other writings, and do such other acts necessary, to correct any omissions in
the Loan Documents to which Guarantor is a party, as Lender may reasonably
require; and

 

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(ii)   do and execute all and such further lawful and reasonable acts,
conveyances and assurances for the better and more effective carrying out of the
intents and purposes of this Guaranty and the other Loan Documents to which
Guarantor is a party, as Lender may reasonably require from time to time.

 

7.         Entire Agreement/Amendments.  This instrument represents the entire
agreement between the parties with respect to the subject matter hereof.  The
terms of this Guaranty shall not be waived, altered, modified, amended,
supplemented or terminated in any manner whatsoever except by written instrument
signed by Lender and Guarantor.

 

8.         Successors and Assigns.  This Guaranty shall be binding upon
Guarantor, and Guarantor’s estate, heirs, personal representatives, successors
and assigns, may not be assigned or delegated by Guarantor and shall inure to
the benefit of Lender and its successors and assigns.

 

9.         Governing Law.

 

(a)           THIS GUARANTY WAS NEGOTIATED IN THE STATE OF NEW YORK AND THE
PROCEEDS OF THE NOTE DELIVERED PURSUANT TO THE LOAN AGREEMENT WERE DISBURSED
FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL
RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY,
AND IN ALL RESPECTS, INCLUDING MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS GUARANTY AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE AND ANY APPLICABLE LAW
OF THE UNITED STATES OF AMERICA.  TO THE FULLEST EXTENT PERMITTED BY LAW,
GUARANTOR HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT
THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS GUARANTY AND THE NOTE, AND THIS
GUARANTY AND THE NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK PURSUANT TO § 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.

 

(b)           ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR GUARANTOR
ARISING OUT OF OR RELATING TO THIS GUARANTY SHALL BE INSTITUTED IN ANY FEDERAL
OR STATE COURT IN NEW YORK COUNTY, NEW YORK  AND GUARANTOR WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING, AND GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING.  GUARANTOR
DOES HEREBY DESIGNATE AND APPOINT CT CORPORATION SYSTEMS AT 111 EIGHTH AVENUE,
13TH FLOOR, NEW YORK, NEW YORK 10005, AS ITS AUTHORIZED AGENT TO ACCEPT AND
ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN
ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK,
NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID

 

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ADDRESS AND WRITTEN NOTICE OF SAID SERVICE OF GUARANTOR MAILED OR DELIVERED TO
GUARANTOR IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT
EFFECTIVE SERVICE OF PROCESS UPON GUARANTOR (UNLESS LOCAL LAW REQUIRES ANOTHER
METHOD OF SERVICE), IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW
YORK.  GUARANTOR (i) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS
OF ITS AUTHORIZED AGENT HEREUNDER, (ii) MAY AT ANY TIME AND FROM TIME TO TIME
DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK
(WHICH OFFICE SHALL BE DESIGNATED AS THE ADDRESS FOR SERVICE OF PROCESS), AND
(iii) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES
TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A
SUCCESSOR.  NOTWITHSTANDING THE FOREGOING, LENDER SHALL HAVE THE RIGHT TO
INSTITUTE ANY LEGAL SUIT, ACTION OR PROCEEDING FOR THE ENFORCEMENT OR
FORECLOSURE OF ANY LIEN ON ANY COLLATERAL FOR THE LOAN IN ANY FEDERAL OR STATE
COURT IN ANY JURISDICTION(S) THAT LENDER MAY ELECT IN ITS SOLE AND ABSOLUTE
DISCRETION, AND GUARANTOR WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND
GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN
ANY SUIT, ACTION OR PROCEEDING.

 

10.       Section Headings.  The headings of the sections and paragraphs of this
Guaranty have been inserted for convenience of reference only and shall in no
way define, modify, limit or amplify any of the terms or provisions hereof.

 

11.       Severability.  Any provision of this Guaranty which may be determined
by any competent authority to be prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.  To
the extent permitted by applicable law, Guarantor hereby waives any provision of
law which renders any provision hereof prohibited or unenforceable in any
respect.

 

12.       WAIVER OF TRIAL BY JURY.  GUARANTOR HEREBY WAIVES THE RIGHT OF TRIAL
BY JURY IN ANY LITIGATION, ACTION OR PROCEEDING ARISING HEREUNDER OR IN
CONNECTION THEREWITH.

 

13.       Other Guaranties.  The obligations of Guarantor hereunder are separate
and distinct from, and in addition to, the obligations of Guarantor now or
hereafter arising under any other guaranties, indemnification agreements or
other agreements to which Guarantor is now or hereafter becomes a party.  In no
event shall Guarantor be entitled to any credit against amounts due under this
Guaranty by reason of amounts paid to Lender by Guarantor or any other person
under or by reason of the other guaranties, indemnification agreements or other
agreements to which Guarantor is now or hereafter becomes a party.

 

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14.       Notices.   All notices, demands, requests, consents, approvals or
other communications (collectively called “Notices”) required or permitted to be
given hereunder to Lender or Guarantor or which are given to Lender or the
Guarantor with respect to this Guaranty shall be in writing and shall be sent by
United States registered or certified mail, return receipt requested, postage
prepaid, addressed as set forth below, or personally delivered with receipt
acknowledged to such address, or in either case, to such other address(es) as
the party in question shall have specified most recently by like Notice.

 

If to Lender, to:

 

c/o LoanCore Capital

 

55 Railroad Avenue, Suite 100

 

Greenwich, Connecticut 06830

 

Attention: Brett Kaplan

 

Facsimile No.: (203) 861-6006

 

E-mail: BKaplan@LoanCoreCapital.com

 

with a copy to:

 

c/o LoanCore Capital

 

55 Railroad Avenue, Suite 100

 

Greenwich, Connecticut 06830

 

Attention: Notices

 

E-mail: notices@loancorecapital.com

 

with a copy to:

 

Winstead PC

 

201 North Tryon Street, Suite 2000

 

Charlotte, North Carolina 28202

 

Attention: Christian G. Beltz, Esq.

 

Email: cbeltz@winstead.com

 

If to Guarantor, to:

 

 

 

Overstock.com, Inc.

 

799 W. Coliseum Way

 

Midvale, Utah 84047

 

with a copy to:

 

 

 

Parr Brown Gee & Loveless

 

101 South 200 East

 

Suite 700

 

Salt Lake City, Utah 84111

 

Attention: Lamont Richardson

 

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Notices which are given in the manner aforesaid shall be deemed to have been
given or served for all purposes hereunder (i) on the date on which such notice
shall have been personally delivered as aforesaid, (ii) on the date of delivery
by mail as evidenced by the return receipt therefor, or (iii) on the date of
failure to deliver by reason of refusal to accept delivery or changed address of
which no Notice was given.

 

15.       Guarantor’s Receipt of Loan Documents.  Guarantor by its execution
hereof acknowledges receipt of true copies of all of the Loan Documents, the
terms and conditions of which are hereby incorporated herein by reference.

 

16.       Interest; Expenses.

 

(a)           If Guarantor fails to pay all or any sums due hereunder upon
demand by Lender, the amount of such sums payable by Guarantor to Lender shall
bear interest from the date of demand until paid at the Default Rate in effect
from time to time.

 

(b)           Guarantor hereby agrees to pay all costs, charges and expenses,
including reasonable attorneys’ fees and disbursements, that may be incurred by
Lender in enforcing the covenants, agreements, obligations and liabilities of
Guarantor under this Guaranty.

 

17.       Intentionally Omitted.

 

18.       Joint and Several Obligations.  If Guarantor consists of more than one
Person, each such Person shall have joint and several liability for the
obligations of Guarantor hereunder.

 

19.       Certain Payments to Senior Lender.  Lender has advised Borrower and
Guarantor that, pursuant to the Intercreditor Agreement, Lender may be required
in certain circumstances to turn over to Senior Lender certain payments received
by Lender from Guarantor.  If Lender turns over any such payments to Senior
Lender, then Senior Lender shall apply such amount as an optional prepayment in
accordance with the Section 2.3.3 of the Senior Loan Agreement.

 

[Remainder of Page Intentionally Left Blank; Signature Page Follows]

 

11

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IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date first
above written.

 

 

GUARANTOR:

 

 

 

OVERSTOCK.COM, INC.,

 

a Delaware corporation

 

 

 

By:

 /s/ Carter Lee

 

Name:

 Carter Lee

 

Title:

 Chief Administrative Officer

 

MEZZANINE GUARANTY OF RECOURSE OBLIGATIONS – Signature Page

 

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