Overstock.com 2010 Annual Report Download - page 75

Table of Contents
Borrowings
Wells Fargo Credit Agreement.
Prior to December 23, 2009, we had a credit agreement (the "Wells Fargo Credit Agreement") with Wells Fargo Bank, National Association ("Wells
Fargo"). The Wells Fargo Credit Agreement provided a revolving line of credit to us of up to $30.0 million which we used primarily to obtain letters of credit
to support inventory purchases.
On December 23, 2009, we terminated the Wells Fargo Credit Agreement, 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 on December 31, 2009, and were replaced by 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").
On August 3, 2009, we terminated the WFRF Agreement.
Wells Fargo Commercial Purchasing Card Agreement
Prior to January 1, 2010, we had a commercial purchasing card agreement (the "WF Purchasing Card") with Wells Fargo. The WF Purchasing Card
expired on January 1, 2010.
U.S. Bank Financing Agreements
We entered into (i) a Financing Agreement dated December 22, 2009 (the "Financing Agreement") with U.S. Bank, and (ii) a Security Agreement dated
December 22, 2009 with U.S. Bank (the "Security Agreement") and related agreements described in the Financing Agreement and/or Security Agreement.
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 the Company's 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 Base (as defined in the Financing Agreement). The
Financing Agreement and the credit facility terminate on October 2, 2011.
Subject to certain interest rate floors and other exceptions, advances under the Financing Agreement bear interest at either (a) Libor plus 1% for cash-
collateralized financing, including letters
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