EXHIBIT
10.17


 


LEASE TERMINATION AGREEMENT


 


                This
LEASE TERMINATION AGREEMENT (“Agreement”)  is entered into on March 27, 2002 (“Effective Date”) by and between 2855 E.
COTTONWOOD PARKWAY, L.C. (“Landlord”)  and OVERSTOCK.COM, INC., formally known as
deals.com, inc., and DiscountsDirect (“Tenant”).


 


                WHEREAS, Tenant holds certain Premises (“Premises”) in Salt Lake City, Utah, under a
Lease Agreement with Landlord dated December 21, 1998, as amended by Lease
Addendum No. 1 dated April 6, 1999, Lease Addendum No. 1 dated June 18, 1999,
and Lease Addendum No. 3 dated July 13, 1999 (collectively, the “Lease Agreement”), which Premises are
described as follows:


 


Suite
No. 500 on the 5th floor containing approximately 12,057 of rentable
square feet (10,876 usf), situated at 2855 E. Cottonwood Parkway (the
“Building”) in the City of Salt Lake City, State of Utah.


 


                WHEREAS, Tenant has requested that the
Landlord consider the conditions upon which Tenant may be released from any
further obligations under the Lease Agreement for the benefit of the Tenant;
and


 


                WHEREAS, Subject to and in consideration of
Landlord’s receipt from Tenant of the Consideration (defined below) and the
general releases contained herein (collectively, the “Conditions”), Landlord is willing to effectuate
with Tenant, in settlement and compromise of obligations of Tenant and claims
otherwise available to Landlord under the Lease Agreement, a mutually agreed
termination of the Lease Agreement as of the Effective Date;


 


                NOW, THEREFOR, IN CONSIDERATION of the
mutual covenants hereinafter set forth, but subject to and conditioned upon the
satisfaction of the Conditions, it is agreed by the parties hereto as follows:


 


1.     Recitals — The recitals to this
Agreement are an integral part of the agreement and understanding of the
parties, and are incorporated by reference in this Agreement not expressly
defined in this Agreement will have the same meanings as set forth in the Lease
Agreement.


 


2.     Consideration — In consideration of
this Agreement and the release and termination contained herein, Tenant does
hereby agree, concurrently with the execution of this Agreement by Landlord, to
make, execute and deliver to Landlord consideration (collectively, the “Consideration”) consisting of the following


 


(i)            a
payment to Landlord by cashier’s check, wire transfer or other immediately
available funds in the sum of Three Hundred and Forty Thousand Dollars
($340,000.00), plus


 

















 


(ii)           the transfer and assignment to
Landlord, which Tenant does hereby make and grant to Landlord, of all fixtures,
tenant improvements, and other items currently located in Suite 500 of the
Building (the “Property”).


 


3.       Accord
And Satisfaction — Landlord and Tenant shall accept said Consideration and
the general releases contained herein as an accord and satisfaction with
respect to all monies owed or owing to Landlord by Tenant pursuant to the Lease
Agreement regarding the Premises leased by the Lease Agreement, including, but
not limited to, Base and Additional Rent amounts, Parking Charges, and common
area and Operating Expenses.  Tenant
fully acknowledges that there are substantial present and valuable benefits
realized by reason of the Landlord’s agreements and actions hereunder,
including the immediate and present benefit of relief from ongoing rental
payment and other expenses liabilities associated with the use and occupancy of
the Premises under the Lease Agreement. 
Tenant and Landlord acknowledge that the value realized is a present and
contemporaneous reasonable value exchanged for the Consideration paid and made
by Tenant to the Landlord hereunder.


 


4.     Termination of Obligations Under Lease
Agreement — Except as set forth herein, upon the Effective Date all
obligations of the parties under the Lease Agreement shall terminate, and any
and all rights and obligations of the Landlord and Tenant arising from the
Lease Agreement shall be extinguished.


 


5.     Premises — Immediately upon the
Effective Date, the Tenant will fully and forever surrender the Premises and
deliver possession of the same to the Landlord, notwithstanding the terms of
the Lease Agreement.


 


6.     General Release By Landlord — Except
as set forth herein, Landlord hereby releases, acquits and forever discharges
Tenant, and each of its parent and/or related corporations, subsidiaries,
successors, individual directors, officers, employees, agents, insurers and
assigns, individually and collectively, and any and all other persons who might
be claimed to be liable (collectively, “Tenant Parties”), of and from any and
all claims of every nature and kind whatsoever, known or unknown, suspected or
unsuspected, past, present or future, which Landlord has had or might have
asserted or could assert against Tenant Parties arising out of or in connection
with the subject Lease Agreement, including, without limitations, any claim,
damage, right, accounting, Tenant Improvement Allowance, performance, payment
or reimbursement.


 


7.     General Release By Tenant — Except
as set forth herein, Tenant hereby releases, acquits and forever discharges Landlord
and each of its parent and/or related corporations, subsidiaries, successors,
individual directors, officers, employees, agents, insurers and assigns,
individually and collectively, and any and all other persons who might be
claimed to be liable (collectively, “Landlord Parties”), of and from any and
all claims of every nature and kind whatsoever, known or unknown, suspected or
unsuspected, past, present or future, which Tenant has had or might have
asserted or could assert against Landlord Parties arising out of or in
connection with the subject


 

















 


Lease Agreement, including,
without limitation, any claim, damage, right, accounting, Tenant Improvement
Allowance, performance, payment or reimbursement.


 


8.     Representations and Warranties


 


(i)            Tenant
represents and warrants to Landlord as follows, which representations and
warranties shall survive the Effective Date, and Tenant acknowledges that but
for such representations and warranties, Landlord would not execute this
Agreement:


 


a.     That
Tenant has the full capacity, right, power and authority to execute, deliver
and perform this Agreement and all documents to be executed by Tenant pursuant
hereto, and all required action and approvals therefore have been
obtained.  The individuals signing this
Agreement and all other documents executed or to be executed pursuant hereto on
behalf of Tenant are and shall be duly authorized to sign the same on behalf of
Tenant and to bind Tenant thereto.  This
Agreement and the transactions contemplated by and under this Agreement will
not result in a breach of, or constitute a default under, any agreement to
which Tenant is subject or by which Tenant is bound.  The execution of this Agreement or any instrument or document
required by the terms of this Agreement by Tenant and the consummation of the
transactions contemplated by the Agreement by Tenant will not violate any
Federal, State or local law, order, ruling, certificate or license, regulation
or demand of any statute, court, regulatory agency or other tribunals to which
Tenant is subject.


 


b.     That
Overstock.com is the Tenant under the Lease Agreement, and that there are no
claims, causes of action or litigation or proceedings initiated by or pending
against Tenant, or to the best of Tenant’s knowledge, threatened against Tenant
in respect to the right, title and interest of Tenant under the Lease
Agreement.


 


c.     That there are no
subleases, assignments or other agreements or contracts in existence to which
Tenant is a party and that affect any of Tenant’s interest in the Lease
Agreement or the Property and will be binding on Landlord after the Effective
Date.  Tenant agrees to indemnify,
defend and hold harmless Landlord from any claim that may be filed or asserted
against the Property of asserting any right, title or interest of Tenant to the
Property or the Lease Agreement that would affect the enforceability of this
Agreement.  Tenant hereby indemnifies
and agrees to defend and hold Landlord harmless from and against any and all
loss, damage, liability and expense (including reasonable attorney fees and
other litigation expenses) Landlord may suffer, sustain or incur as a result of
any breach of the representations, warranties and covenants by Tenant
specifically set forth in this Paragraph 8.


 

















 


d.     Tenant has not (i) made a
general assignment for the benefit of creditors, (ii) filed any voluntary
petition in bankruptcy or suffered the filing of any involuntary petition by
its creditors, (iii) suffered the appointment of a receiver to take possession
of all or substantially all of its assets, or (iv) suffered the attachment or
other judicial seizure of all or substantially all of its assets.  There are no claims, actions suits or
proceedings continuing, pending or, to the best of Tenant’s knowledge,
threaten, involving the validity or enforceability of this Agreement or any
other documents or instruments to be delivered by Tenant in connection
therewith.  To the best of Tenant’s
knowledge, to the extent relevant to the transactions contemplated hereunder,
Tenant is not subject to or in default under any notice, order, writ,
injunction, decree or demand of any court or any governmental department,
board, commission, bureau, agency or instrumentality that would effect the
enforceability of this Agreement.


 


(ii)           Landlord
represents and warrants to Tenant as follows, which representations and
warranties shall survive the Effective Date, and Landlord acknowledges that but
for such representations and warranties, Tenant would not execute the
Agreement:


 


a.     That Landlord has the full
capacity, right, power and authority to execute, deliver and perform this
Agreement and all documents to be executed by Landlord pursuant hereto, and all
required action and approvals therefore have been obtained.  The individuals signing this Agreement and
all other documents executed or to be executed pursuant hereto on behalf of
Landlord, and to bind Landlord thereto. 
This Agreement and the transactions contemplated by and under this
Agreement will not result in a breach of, or constitute a default under any
agreement to which Landlord is subject or by which Landlord is bound.  The execution of this Agreement or any
instrument or document required by the terms of this Agreement by Landlord and
the consummation by Landlord of the transactions contemplated by this Agreement
will not violate any order, ruling, certificate or license, regulation or
demand of any court, regulatory agency or other tribunals to which Landlord is
subject.


 


b.     That 2855 E. Cottonwood
Parkway, L.C. is the Landlord under the Lease Agreement and the owner of the
Premises and that there are not claims, causes of action or litigation or
proceedings initiated by or pending against Landlord, or to be the best of
Landlord’s knowledge, threatened against Landlord in respect to the right,
title and interest of Landlord in the Lease Agreement.


 


c.     Landlord agrees to
indemnify, defend and hold harmless Tenant from any claim that may be files or
asserted against the right, title or interest of Landlord to the Lease
Agreement that would affect the


 


 

















 


enforceability
of this Agreement.  Landlord hereby
indemnifies and agrees to defend and hold Tenant harmless from and against any
and all loss, damage, liability and expense (including reasonable attorney fees
and other litigation expenses) Tenant may suffer, sustain or incur as a result
of any breach of the representations, warranties and covenants by Landlord
specifically set forth in this Paragraph 8.


 


d.     Landlord has not (i) made
general assignments for the benefit of creditors, (ii) filed any voluntary
petition in bankruptcy or suffered the filing of any involuntary petition by
its creditors, (iii) suffered the appointment of a receiver to take possession
of all or substantially all of its assets, or (iv) suffered the attachment or
other judicial seizure of all or substantially all of its assets.  There are no claims, actions, suits or
proceedings continuing, pending or, to the best of Landlord’s knowledge,
threaten, involving the validity or enforceability of this Agreement or any
other documents or instruments to be delivered by Landlord in connection
therewith.  To the best of Landlord’s
knowledge, to the extend relevant to the transactions contemplated hereunder,
Landlord is not subject to or in default under any notice, order, writ, injunction,
decree or demand of any court or any governmental department, board,
commission, bureau, agency or instrumentality that would effect the
enforceability of this Agreement.


 


9.     Voluntary Agreement
— Both Landlord and Tenant acknowledge and agree that they have read and
understood the foregoing Agreement and that they have entered into this
Agreement voluntarily and of their own free will, having had full opportunity
to have the same reviewed by their respective legal counsel or other advisors.


 


10.   General Provisions —
This Agreement shall be governed by, and construed in accordance with, the laws
of the State of Utah.  The persons
executing this Agreement warrant and represent that (a) Tenant or Landlord, as
applicable, is a duly organized and existing legal entity, in good standing in
the state of its formation, and (b) Tenant or Landlord, as applicable, has full
right and authority to execute, deliver and perform this Agreement.  This Agreement shall be binding upon and
inure to the benefit of the respective legal representatives, and any
authorized successors and assigns of the parties.  If for any reason a court of competent jurisdiction finds any
provision of this Agreement, or portion thereof, to be unenforceable, that
provision of the Agreement will be enforced to the maximum extent permissible
so as to affect the economic intent of the parties, and the remainder of the
Agreement will continue in full force and effect.


 

















 


 


 


 


                        EXECUTED as of the date and year above first
written.


 


 


	
   

  	
   

  	
   

  	
  LANDLORD:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  2855 E. COTTONWOOD
  PARKWAY,

  	
   

  
	
   

  	
   

  	
   

  	
  L.C, a Utah limited
  liability company, by its manager, Cottonwood Partners Management, Ltd., by
  its general partner, CotNet Management, Inc., a Utah corporation

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  John L. West

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  John
  L. West, President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  TENANT:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  OVERSTOCK.COM, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  Jason Lindsey

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  Jason Lindsey

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  CFO, Director