Exhibit
10.1


 


SECOND
AMENDMENT TO LOAN AND SECURITY AGREEMENT


 


THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
(this “Agreement”) is entered into
as of January 14, 2008, by and between WELLS
FARGO RETAIL FINANCE, LLC, a Delaware limited liability company with
offices at One Boston Place - 19th Floor, Boston, Massachusetts 02109 (“Lender”), and OVERSTOCK.COM, INC., a Delaware corporation (“Borrower”).


 


Background


 


Borrower and Lender are parties to that certain Loan
and Security Agreement dated as of December 12, 2005 (as amended from time
to time, the “Loan Agreement”), as
amended by that certain First Amendment to Loan and Security Agreement and
Limited Waiver dated as of March 30, 2007. 
Capitalized terms used herein without definition shall have the
respective meanings as set forth in the Loan Agreement.


 


At this time, the Borrower has requested that the
Lender amend certain terms and conditions of the Loan Agreement.  The Lender has agreed to do so, but only upon
the terms and conditions set forth herein.


 


NOW THEREFORE, in consideration of the mutual promises
and agreements contained herein, the parties hereto hereby agree as follows:


 


1.                                       Incorporation of Terms and Conditions of
Loan Agreement.   All of the terms and conditions of the Loan
Agreement (including, without limitation, all definitions set forth therein)
are specifically incorporated herein by reference.


 


2.                                       Conditions Precedent. 
This Agreement shall not become effective unless and until each of the
following conditions has been satisfied, in each case to the satisfaction of
the Lender:


 


(a)                                  The Lender shall have received original
counterparts of this Agreement and all documents, instruments and agreements
required to be delivered pursuant to the terms of this Agreement, duly executed
by each of the parties hereto and thereto;


 


(b)                                 All actions on the part of the Borrower
necessary for the valid execution, delivery and performance by the Borrower of
this Agreement and all documents, instruments and agreements required to be
delivered pursuant to the terms of this Agreement, shall have been duly and
effectively taken and evidence thereof satisfactory to the Lender shall have
been provided to the Lender; and


 


(c)                                  The Borrower shall have paid to the
Lender all costs and expenses of the Lender, including, without limitation,
reasonable attorneys’ fees, in connection with the preparation, negotiation,
execution and delivery of this Agreement.


 


3.                                       Amendments to Loan Agreement. 
From and after the effectiveness of this Agreement, the Loan Agreement shall
be amended as follows:


 


(a)                                  Until such time as the Borrower has
requested a Borrowing in accordance with Paragraph 4 below, the Lender shall
waive the monthly agency fee required to be paid pursuant to the Fee Letter.


 


(b)                                 Until such time as the Borrower has
requested a Borrowing in accordance with Paragraph 4 below, the Lender shall
not issue a Cash Sweep Instruction pursuant to Section 2.7(b) of
the Loan Agreement.


 


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(c)                                  Until such time as the Borrower has
requested a Borrowing in accordance with Paragraph 4 below, the Borrower shall
not be responsible to pay for the costs and expenses of any audits or
appraisals conducted by the Lender pursuant to Section 2.11(c) of the
Loan Agreement.


 


(d)                                 Until such time as the Borrower has
requested a Borrowing in accordance with Paragraph 4 below, the Borrower shall
not be required to deliver the financial and other reports specified in Section 6.2(a)-(h) of
the Loan Agreement on a weekly basis; provided, however, that the
Borrower shall continue to deliver the Lender a monthly borrowing base
certificate (in a form approved by Lender), and a monthly statement of cash
deposits; and on a quarterly basis, a Compliance Certificate with the quarterly
financial statements and other reports including the reports specified in Section 6.2(a)-(h) to
the Lender which are required by the Loan Agreement.


 


4.                                       Additional Conditions to Advances. 
In addition to all other conditions to the obligation of Lender to make
any Advances under the Loan Agreement (or to extend any other credit
thereunder), the Lender shall have no obligation to make any Advances or other
financial accommodations thereunder unless:


 


(a)                                  The Borrower shall have first provided
the Lender with not less than forty-five (45) Business Days’ prior written
notice of the Borrower’s intention to request a Borrowing, together with (i) all
of the information required pursuant to Section 2.3(a) of the
Loan Agreement, (ii) a current Compliance Certificate, (iii) a
certification that all representations and warranties contained in the Loan
Agreement and the other Loan Documents (collectively, the “Representations and Warranties”) are
(except with respect to those Representations and Warranties which relate
solely to an earlier date) true, correct and complete in all respects as of the
date thereof (and shall be correct as of the date of the requested Borrowing)
and, to the extent any of the Representations and Warranties shall not be true,
correct and complete in all respects, the Borrower shall provide the Lender
with updates thereto and such supporting documentation reasonably requested by
the Lender, which Representations and Warranties, as updated, shall be
acceptable to the Lender and (iv) and such other information as the Lender
may reasonably request; and


 


(b)                                 The Lender shall have received a
satisfactory audit and appraisal of the Borrower’s financial condition and the
assets;


 


(c)                                  The Lender shall have received a business
plan containing the Borrower’s Projections for the twelve month period
following any notice under clause (a) above, on a month-by-month basis, in
form and substance (including as to scope and underlying assumptions)
satisfactory to Lender; and


 


(d)                                 The Borrower shall have paid the Lender a
line reactivation fee in the amount of $50,000.00, such fee to be retained by
the Lender as a fee in all instances and shall not be applied in reduction of
any other Obligations.


 


Further, upon any
Borrowing, all terms and covenants of the Loan Agreement (including any such
terms previously suspended by agreement of the Lender) shall be automatically
reactivated and shall be in full force and effect.


 


5.                                       No Further Modification.   
Except as expressly modified in the manner set forth above, the Loan
Agreement and the other Loan Documents shall remain unmodified and in full
force and effect.


 


6.                                       No Claims; Waiver. 
The Borrower acknowledges, confirms and agrees that, as of the date
hereof, the Borrower has no knowledge of any offsets, defenses, claims or
counterclaims against the Lender with respect to, under or relating to the
Obligations, the Loan Documents, or the 


 


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transactions
contemplated therein, and, to the extent that the Borrower has or has ever had
any such offsets, defenses, claims or counterclaims arising on or before the
date hereof, the Borrower hereby specifically WAIVES
and RELEASES any and all rights to
such offsets, defenses, claims or counterclaims.


 


7.                                       Binding Agreement. 
The terms and provisions hereof shall be binding upon and inure to the
benefit of the parties hereto and their heirs, representatives, successors and
assigns.


 


8.                                       Multiple Counterparts. 
This Agreement may be executed in multiple counterparts, each of which
shall constitute an original and together which shall constitute but one and
the same instrument.


 


9.                                       Governing Law; Sealed Instrument. 
This Agreement shall be construed, governed, and enforced pursuant to
the law of the Commonwealth of Massachusetts, and shall take effect as a sealed
instrument.


 


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IN WITNESS WHEREOF, this Agreement has been duly
executed and delivered by each of the parties hereto as of the date first above
written.


 


	
  BORROWER:

  
	
   

  	
   

  
	
  OVERSTOCK.COM,
  INC.

  
	
   

  
	
  By:

  	
  /s/David K.
  Chidester

  
	
  Name:

  	
  David K.
  Chidester

  
	
  Title:

  	
  CFO — SVP
  Finance

  
	
   

  	
   

  
	
   

  	
   

  
	
  LENDER:

  
	
   

  	
   

  
	
  WELLS
  FARGO RETAIL FINANCE, LLC

  
	
   

  	
   

  
	
  By:

  	
  /s/ William Chan

  
	
  Name:

  	
  William Chan

  
	
  Title:

  	
  Vice President