Document:

Exhibit 10.1

 

NINTH AMENDMENT TO CREDIT AGREEMENT

 

                THIS AMENDMENT TO CREDIT
AGREEMENT (this “Amendment”) is entered into as of January 1, 2008, by and
between OVERSTOCK.COM, INC., a Delaware corporation (“Borrower”), and WELLS
FARGO BANK, NATIONAL ASSOCIATION (“Bank”).

 

RECITALS

 

                WHEREAS,
Borrower is currently indebted to Bank pursuant to the terms and conditions of
that certain Credit Agreement between Borrower and Bank dated as of February 13,
2004, as amended from time to time (“Credit Agreement”).

 

                WHEREAS, Bank and Borrower have
agreed to certain changes in the terms and conditions set forth in the Credit
Agreement and have agreed to amend the Credit Agreement to reflect said
changes.

 

                NOW, THEREFORE, for valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree that the Credit Agreement shall be amended as follows:

 

                1.             Section 1.1 is hereby deleted in its entirety, and
the following substituted therefor:

 

             “SECTION 1.1.         LINE OF CREDIT.

 

             (a)               Line
of Credit.  Subject to the terms and
conditions of this Agreement, Bank hereby agrees to make advances to Borrower
from time to time up to and including January 1, 2010, not to exceed at
any time the aggregate principal amount of Thirty Million Dollars ($30,000,000.00)
(“Line of Credit”), the proceeds of which shall be used to finance Borrower’s
working capital requirements.  Borrower’s
obligation to repay advances under the Line of Credit shall be evidenced by a
promissory note dated as of January 1, 2008  (“Line of Credit Note”), all terms of which
are incorporated herein by this reference.

 

             (b)              Letter
of Credit Subfeature.  As a
subfeature under the Line of Credit, Bank agrees from time to time during the
term thereof to issue or cause an affiliate to issue commercial or standby
letters of credit for the account of Borrower to finance working capital (each,
a “Letter of Credit” and collectively, “Letters of Credit”); provided however,
that the aggregate undrawn amount of all outstanding Letters of Credit shall
not at any time exceed Thirty Million Dollars ($30,000,000.00).  The form and substance of each Letter of
Credit shall be subject to approval by Bank, in its sole discretion.  No Letter of Credit shall have an expiration
date subsequent to the Line of Credit. 
The undrawn amount of all Letters of Credit shall be reserved under the
Line of Credit and shall not be available for borrowings thereunder.  Each Letter of Credit shall be subject to the
additional terms and conditions of the Letter of Credit agreements,
applications and any related documents required by Bank in connection with the
issuance thereof.  Each drawing paid
under a Letter of Credit shall be deemed an advance under the Line of Credit
and shall be repaid by Borrower in accordance with the terms and conditions of
this Agreement applicable to such advances; provided however, that if advances
under 

 

1

 

the
Line of Credit are not available, for any reason, at the time any drawing is
paid, then Borrower shall immediately pay to Bank the full amount drawn,
together with interest thereon from the date such drawing is paid to the date
such amount is fully repaid by Borrower, at the rate of interest applicable to
advances under the Line of Credit.  In
such event Borrower agrees that Bank, in its sole discretion, may debit any
account maintained by Borrower with Bank for the amount of any such drawing.

 

                (c)           Borrowing and Repayment.  Borrower may from time to time during the
term of the Line of Credit borrow, partially or wholly repay its outstanding
borrowings, and reborrow, subject to all of the limitations, terms and
conditions contained herein or in the Line of Credit Note; provided however,
that the total outstanding borrowings under the Line of Credit shall not at any
time exceed the maximum principal amount available thereunder, as set forth
above.”

 

                2.             Section 1.2 (d) is hereby deleted in its
entirety, and the following substituted therefor:

 

             “(d)            Unused Commitment Fee.  Borrower shall pay to Bank a fee equal to one
tenth percent (0.10%) per annum (computed on the basis of a 360-day year,
actual days elapsed) on the average daily unused amount of the Line of Credit,
which fee shall be calculated on a quarterly basis by Bank and shall be due and
payable by Borrower in arrears each February 1, May 1, August 1,
and November 1.”

 

                3.  The following is hereby added to the Credit
Agreement as Section 3.2 (c):

 

                “(c)         Additional Letter of Credit Documentation.  Prior to the issuance of each Letter of
Credit, Bank shall have received a Letter of Credit Agreement, properly
completed and duly executed by Borrower.”

 

                4.             In consideration of the changes set forth herein and as
a condition to the effectiveness hereof, immediately upon signing this Amendment
Borrower shall pay to Bank a non-refundable fee of $37,500.00.

 

                5.             Except as specifically provided herein, all terms and
conditions of the Credit Agreement remain in full force and effect, without
waiver or modification.  All terms
defined in the Credit Agreement shall have the same meaning when used in this
Amendment.  This Amendment and the Credit
Agreement shall be read together, as one document.

 

                6.             Borrower hereby remakes all representations and
warranties contained in the Credit Agreement and reaffirms all covenants set
forth therein.  Borrower further
certifies that as of the date of this Amendment there exists no Event of
Default as defined in the Credit Agreement, nor any condition, act or event
which with the giving of notice or the passage of time or both would constitute
any such Event of Default.

 

2

 

                IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be executed as of the day and year first written above.

 

	
   

  	
   

  	
   

  	
  WELLS FARGO BANK,

  
	
  OVERSTOCK.COM, INC.

  	
   

  	
  NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ David K. Chidester

  	
   

  	
  By:

  	
  /s/ Lisbeth Hopper

  
	
   

  	
   

  	
   

  	
   

  	
  Lisbeth Hopper,

  
	
  Title:

  	
  Senior Vice President,
  Finance

  	
   

  	
   

  	
  Vice President

  
							

 

3Exhibit 10.2

 

REVOLVING LINE OF CREDIT
NOTE

 

	
  $30,000,000.00

  	
   

  	
  Salt Lake City, Utah

  
	
   

  	
   

  	
  January 1, 2008

  

 

                FOR VALUE RECEIVED, the
undersigned OVERSTOCK.COM, INC. (“Borrower”) promises to pay to the order of
WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”) at its office at 299 South
Main, 9th Floor, Salt Lake City, Utah, or at such other place as the
holder hereof may designate, in lawful money of the United States of America
and in immediately available funds, the principal sum of Thirty Million Dollars
($30,000,000.00), or so much thereof as may be advanced and be outstanding,
with interest thereon, to be computed on each advance from the date of its
disbursement as set forth herein.

 

DEFINITIONS:

 

                As used herein, the following
terms shall have the meanings set forth after each, and any other term defined
in this Note shall have the meaning set forth at the place defined:

 

                (a)           “Business Day” means any day except a Saturday, Sunday or
any other day on which commercial banks in Utah are authorized or required by
law to close.

 

                (b)           “Daily LIBOR” means the fluctuating rate per annum to
apply to all or a portion of the outstanding principal amount of this Note
which bears interest determined in relation to LIBOR, as designated by
Borrower, based upon the Base LIBOR (as defined below) with respect to such
rate.

 

                (c)           “Fixed Rate Term” means a period commencing on a Business
Day and continuing for 1, 2, 3, 6 or 12 months, as designated by Borrower,
during which all or a portion of the outstanding principal balance of this Note
bears interest determined in relation to LIBOR; provided however, that no Fixed
Rate Term may be selected for a principal amount less than Five Hundred
Thousand Dollars ($500,000.00); and provided further, that no Fixed Rate Term
shall extend beyond the scheduled maturity date hereof.  If any Fixed Rate Term would end on a day
which is not a Business Day, then such Fixed Rate Term shall be extended to the
next succeeding Business Day.

 

                (d)           “LIBOR” means the rate per annum (rounded upward, if necessary,
to the nearest whole 1/8 of 1%) and determined pursuant to the following
formula:

 

	
  LIBOR
  =

  	
  Base
  LIBOR

  
	
   

  	
  100%
  - LIBOR Reserve Percentage

  

 

                (i)            “Base LIBOR” means:

 

(A)          With respect to a
LIBOR selection for a Fixed Rate Term, the rate per annum for United States
dollar deposits quoted by Bank as the Inter-Bank Market Offered Rate, with the
understanding that such rate is quoted by Bank for the purpose of calculating
effective rates of interest for loans making reference thereto, on the first
day of a Fixed Rate Term for delivery of funds on said date for a period of
time approximately equal to the number of days in such Fixed Rate Term and in
an amount approximately equal to the principal amount to which such Fixed Rate
Term applies.  Borrower 

 

1

 

understands
and agrees that Bank may base its quotation of the Inter-Bank Market Offered
Rate upon such offers or other market indicators of the Inter-Bank Market as
Bank in its discretion deems appropriate including, but not limited to, the
rate offered for U.S. dollar deposits on the London Inter-Bank Market; and

 

(B)           With respect to a
LIBOR selection based upon Daily LIBOR, the rate per annum for United States
dollar deposits, as the Inter-Bank Market Offered Rate, with the understanding
that such rate is quoted by Bank for the purpose of calculating effective rates
of interest for loans making reference thereto, for delivery of funds on such
Business Day for a period of time equal to one (1) month and in an amount
approximately equal to the principal amount to which such rate shall
apply.  Borrower understands and agrees
that Bank may base its quotation of the Inter-Bank Market Offered Rate upon
such offers or other market indicators of the Inter-Bank Market as Bank in its
discretion deems appropriate including, but not limited to, the rate offered
for U.S. dollar deposits on the London Inter-Bank Market.

 

(ii)           “LIBOR Reserve Percentage” means the
reserve percentage prescribed by the Board of Governors of the Federal Reserve
System (or any successor) for “Eurocurrency Liabilities” (as defined in
Regulation D of the Federal Reserve Board, as amended), adjusted by Bank for
expected changes in such reserve percentage during the applicable Fixed Rate
Term.

 

                (e)           “Prime Rate” means at any time the rate of interest most
recently announced within Bank at its principal office as its Prime Rate, with
the understanding that the Prime Rate is one of Bank’s base rates and serves as
the basis upon which effective rates of interest are calculated for those loans
making reference thereto, and is evidenced by the recording thereof after its
announcement in such internal publication or publications as Bank may
designate.

 

INTEREST:

 

                (a)           Interest. 
The outstanding principal balance of this Note shall bear interest
(computed on the basis of a 360-day year, actual days elapsed) either (i) at
a fixed rate per annum determined by Bank to be one percent (1.00%) above LIBOR
in effect on the first day of an applicable Fixed Rate Term, or (iii) at a
fluctuating rate per annum determined by Bank to be one half of one percent
(.50%) above Daily LIBOR in effect on each Business Day a change in Daily LIBOR
is announced within Bank.  With respect
to each LIBOR selection hereunder, Bank is hereby authorized to note the date,
principal amount, interest rate and Fixed Rate Term, if applicable thereto, and
any payments made thereon on Bank’s books and records (either manually or by
electronic entry) and/or on any schedule attached to this Note, which notations
shall be prima facie evidence of the accuracy of the information noted.

 

                (b)           Selection of Interest Rate Options.  At any time any portion of this Note bears
interest determined in relation to LIBOR, it may be continued by Borrower at
the end of the Fixed Rate Term, if applicable thereto, so that all or a portion
thereof bears interest determined in relation to Daily LIBOR or LIBOR and for a
new Fixed Rate Term if designated by Borrower. 
At such time as Borrower requests an advance hereunder or wishes to
select a LIBOR or Daily LIBOR option for all or a portion of the outstanding
principal balance hereof, and at the end of any Fixed Rate Term, Borrower shall
give Bank notice specifying: (i) the interest rate option selected by
Borrower; (ii) the principal amount subject thereto; and (iii) if
applicable, the length of the applicable Fixed Rate Term.  Any such notice may be given by telephone (or
such other electronic method as Bank may permit) so long as, with respect to a
LIBOR selection for a Fixed Rate Term (A) if requested by Bank, Borrower
provides to Bank written confirmation thereof not 

 

2

 

later
than three (3) Business Days after such notice is given, and (B) such
notice is given to Bank prior to 10:00 a.m. on the first day of the Fixed
Rate Term, or at a later time during any Business Day if Bank, at it’s sole
option but without obligation to do so, accepts Borrower’s notice and quotes a
fixed rate to Borrower.  If Borrower does
not immediately accept a fixed rate when quoted by Bank, the quoted rate shall
expire and any subsequent LIBOR request from Borrower for a Fixed Rate Term
shall be subject to a redetermination by Bank of the applicable fixed
rate.  If no specific designation of
interest is made at the time any advance is requested hereunder or at the end
of any Fixed Rate Term, Borrower shall be deemed to have made a Daily LIBOR
interest selection for such advance or the principal amount to which such Fixed
Rate Term applied.

 

                (c)           Taxes and Regulatory Costs.  Borrower shall pay to Bank immediately upon
demand, in addition to any other amounts due or to become due hereunder, any
and all (i) withholdings, interest equalization taxes, stamp taxes or
other taxes (except income and franchise taxes) imposed by any domestic or
foreign governmental authority and related in any manner to LIBOR or Daily
LIBOR, and (ii) future, supplemental, emergency or other changes in the
LIBOR Reserve Percentage, assessment rates imposed by the Federal Deposit Insurance
Corporation, or similar requirements or costs imposed by any domestic or
foreign governmental authority or resulting from compliance by Bank with any
request or directive (whether or not having the force of law) from any central
bank or other governmental authority and related in any manner to LIBOR or
Daily LIBOR to the extent they are not included in the calculation of LIBOR or
Daily LIBOR.  In determining which of the
foregoing are attributable to any LIBOR or Daily LIBOR option available to Borrower
hereunder, any reasonable allocation made by Bank among its operations shall be
conclusive and binding upon Borrower.

 

                (d)           Payment of Interest.  Interest accrued on this Note shall be
payable on the last day of each month, commencing January 31, 2008.

 

(e)           Default Interest.  From and after the maturity date of this
Note, or such earlier date as all principal owing hereunder becomes due and
payable by acceleration or otherwise, the outstanding principal balance of this
Note shall bear interest until paid in full at an increased rate per annum
(computed on the basis of a 360-day year, actual days elapsed) equal to four
percent (4%) above the rate of interest from time to time applicable to this
Note.

 

BORROWING AND REPAYMENT:

 

                (a)           Borrowing and Repayment.  Borrower may from time to time during the
term of this Note borrow, partially or wholly repay its outstanding borrowings,
and reborrow, subject to all of the limitations, terms and conditions of this
Note and of any document executed in connection with or governing this Note;
provided however, that the total outstanding borrowings under this Note shall
not at any time exceed the principal amount stated above.  The unpaid principal balance of this
obligation at any time shall be the total amounts advanced hereunder by the
holder hereof less the amount of principal payments made hereon by or for any
Borrower, which balance may be endorsed hereon from time to time by the
holder.  The outstanding principal
balance of this Note shall be due and payable in full on January 1, 2010.

 

                (b)           Advances. 
Advances hereunder, to the total amount of the principal sum stated
above, may be made by the holder at the oral or written request of (i) David
Chidester or Lisiate (Rich) Paongo or Jason Lindsey, any one acting alone, who
are authorized to request advances and direct the disposition of any advances
until written notice of the revocation of such authority is received by the
holder at the office designated above, or (ii) any person, with 

 

3

 

respect
to advances deposited to the credit of any deposit account of any Borrower,
which advances, when so deposited, shall be conclusively presumed to have been
made to or for the benefit of each Borrower regardless of the fact that persons
other than those authorized to request advances may have authority to draw
against such account.  The holder shall
have no obligation to determine whether any person requesting an advance is or
has been authorized by any Borrower.

 

                (c)           Application of Payments.  Each payment made on this Note shall be
credited first, to any interest then due and second, to the outstanding
principal balance hereof.  All payments
credited to principal shall be applied first, to the outstanding principal
balance of this Note which bears interest determined in relation to Daily
LIBOR, if any, and second, to the outstanding principal balance of this Note
which bears interest determined in relation to LIBOR for a Fixed Rate Term,
with such payments applied to the oldest Fixed Rate Term first.

 

PREPAYMENT:

 

                (a)           Daily LIBOR. 
Borrower may prepay principal on any portion of this Note which bears
interest determined in relation to Daily LIBOR at any time, in any amount and
without penalty.

 

                (b)           LIBOR for Fixed Rate Term.  Borrower may prepay principal on any portion
of this Note which bears interest determined in relation to LIBOR for a Fixed
Rate Term at any time and in the minimum amount of Five Hundred Thousand
Dollars ($500,000.00); provided however, that if the outstanding principal
balance of such portion of this Note is less than said amount, the minimum
prepayment amount shall be the entire outstanding principal balance
thereof.  In consideration of Bank
providing this prepayment option to Borrower, or if any such portion of this
Note shall become due and payable at any time prior to the last day of the
Fixed Rate Term applicable thereto by acceleration or otherwise, Borrower shall
pay to Bank immediately upon demand a fee which is the sum of the discounted
monthly differences for each month from the month of prepayment through the
month in which such Fixed Rate Term matures, calculated as follows for each
such month:

 

                                                       (i)          Determine the amount of
interest which would have accrued each month on the amount prepaid at the
interest rate applicable to such amount had it remained outstanding until the
last day of the Fixed Rate Term applicable thereto.

 

                                                    (ii)          Subtract from the amount
determined in (i) above the amount of interest which would have accrued
for the same month on the amount prepaid for the remaining term of such Fixed
Rate Term at LIBOR in effect on the date of prepayment for new loans made for
such term and in a principal amount equal to the amount prepaid.

 

                                                 (iii)          If the result obtained in (ii) for
any month is greater than zero, discount that difference by LIBOR used in (ii) above.

 

Borrower
acknowledges that prepayment of such amount may result in Bank incurring
additional costs, expenses and/or liabilities, and that it is difficult to
ascertain the full extent of such costs, expenses and/or liabilities.  Borrower, therefore, agrees to pay the
above-described prepayment fee and agrees that said amount represents a
reasonable estimate of the prepayment costs, expenses and/or liabilities of
Bank.  If Borrower fails to pay any
prepayment fee when due, the amount of such prepayment fee shall thereafter
bear interest until paid at a rate per annum two 

 

4

 

percent
(2.0%) above the Prime Rate in effect from time to time (computed on the basis
of a 360-day year, actual days elapsed). 
Each change in the rate of interest on any such past due prepayment fee
shall become effective on the date each Prime Rate change is announced within Bank.

 

EVENTS OF DEFAULT:

 

                This Note is made pursuant to
and is subject to the terms and conditions of that certain Credit Agreement
between Borrower and Bank dated as of February 13, 2004, as amended from
time to time (the “Credit Agreement”). 
Any default in the payment or performance of any obligation under this
Note, or any defined event of default under the Credit Agreement, shall
constitute an “Event of Default” under this Note.

 

MISCELLANEOUS:

 

                (a)           Remedies. 
Upon the occurrence of any Event of Default, the holder of this Note, at
the holder’s option, may declare all sums of principal and interest outstanding
hereunder to be immediately due and payable without presentment, demand, notice
of nonperformance, notice of protest, protest or notice of dishonor, all of
which are expressly waived by each Borrower, and the obligation, if any, of the
holder to extend any further credit hereunder shall immediately cease and
terminate.  Each Borrower shall pay to
the holder immediately upon demand the full amount of all payments, advances,
charges, costs and expenses, including reasonable attorneys’ fees (to include
outside counsel fees and all allocated costs of the holder’s in-house counsel),
expended or incurred by the holder in connection with the enforcement of the
holder’s rights and/or the collection of any amounts which become due to the
holder under this Note, and the prosecution or defense of any action in any way
related to this Note, including without limitation, any action for declaratory
relief, whether incurred at the trial or appellate level, in an arbitration
proceeding or otherwise, and including any of the foregoing incurred in
connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Bank or any other
person) relating to any Borrower or any other person or entity.

 

                (b)           Obligations Joint and Several.  Should more than one person or entity sign
this Note as a Borrower, the obligations of each such Borrower shall be joint
and several.

 

                (c)           Governing Law. 
This Note shall be governed by and construed in accordance with the laws
of the State of Utah.

 

                IN WITNESS WHEREOF, the undersigned has executed this
Note as of the date first written above.

 

OVERSTOCK.COM,
INC.

 

	
  By:

  	
  /s/ David K. Chidester

  
	
   

  	
   

  
	
  Title:

  	
  Senior Vice President,
  Finance

  
			

 

5

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