Overstock.com 2010 Annual Report Download - page 115

Table of Contents
Overstock.com, Inc.
Notes to Consolidated Financial Statements (Continued)
13. BORROWINGS (Continued)
On December 23, 2009, we terminated our credit facility with Wells Fargo, subject to provisions relating to outstanding letters of credit issued by Wells
Fargo for our account and other transitional provisions. On December 31, 2009, per the provisions relating to the outstanding letters of credit, the letters of
credit issued by Wells Fargo expired and were replaced by $2.6 million of letters of credit issued by U.S. Bank National Association ("U.S. Bank") on behalf
of the Company.
Wells Fargo Retail Finance Agreement
On January 6, 2009 we entered into an Amended and Restated Loan and Security Agreement dated January 6, 2009 (the "WFRF Agreement") with Wells
Fargo Retail Finance, LLC ("WFRF"). The WFRF Agreement replaced our Loan and Security Agreement dated December 12, 2005 with WFRF, which had
previously been amended and had terminated in accordance with its terms.
On August 3, 2009, we terminated the WFRF Agreement.
Wells Fargo Commercial Purchasing Card Agreement
We had a commercial purchasing card agreement (the "Prior Purchasing Card") with Wells Fargo that expired on January 1, 2010. We used the Prior
Purchasing Card for business purpose purchasing and were required to pay it in full each month. We were required to maintain a cash balance of $1.4 million
at Wells Fargo. as collateral for the Prior Purchasing Card, and these amounts are included in Restricted cash in the accompanying consolidated balance
sheets, and therefore the facility did not provide additional liquidity to us. At December 31, 2009, $1.0 million was outstanding. No further amounts were
available to the Purchasing Card as of December 31, 2009.
U.S. Bank Financing Agreements
We entered into a Financing and Security Agreement dated December 22, 2009 (the "Financing Agreement") with U.S. Bank. The Financing Agreement
replaced the former credit agreement with Wells Fargo.
The Financing Agreement provides for revolving loans and other financial accommodations to or for our benefit of (i) up to $10 million for cash-
collateralized advances, and (ii) up to $10 million for advances supported by our non-cash collateral. The maximum credit potentially available under the
revolving facility is $20 million. Our obligations under the Financing Agreement and all related agreements are secured by all or substantially all of our
assets, excluding our interest in certain litigation. Subject to certain exceptions, the full amount of the revolving facility is expected to be available to us as
long as $20 million is maintained on deposit with U.S. Bank. The obligation of U.S. Bank to make advances under the Financing Agreement is subject to the
conditions set forth in the Financing Agreement.
Our failure to keep at least $20 million on deposit in certain accounts with U.S. Bank would constitute a "triggering event" under the Financing
Agreement. If a triggering event occurs, we would become subject to financial covenants (i) limiting our capital expenditures to $20 million annually, and
(ii) requiring us to maintain a Financing Agreement defined fixed charges coverage ratio of at least 1.10 to 1.00 as of the end of any fiscal quarter for the
period of the prior four quarters. The occurrence of a triggering event could also result in a decrease in the amount available to us under the non cash-
collateralized portion of the facility, as availability would then depend, in part, on the Borrowing
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