Overstock.com 2003 Annual Report Download - page 67

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CREDIT AGREEMENT
THIS AGREEMENT is entered into as of February 13, 2004, by and between OVERSTOCK.COM, INC., a Delaware corporation ("Borrower"), and
WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank").
RECITALS
Borrower has requested that Bank extend or continue credit to Borrower as described below, and Bank has agreed to provide such credit to Borrower on
the terms and conditions contained herein.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Bank and Borrower hereby agree as
follows:
ARTICLE I
CREDIT TERMS
SECTION 1.1. LETTER OF CREDIT LINE.
(a) Letter of Credit Line. Subject to the terms and conditions of this Agreement, Bank hereby agrees to establish a letter of credit line ("Letter of Credit
Line") under which Bank shall issue or cause an affiliate to issue commercial/standby letters of credit for the account of Borrower to finance working capital
(each, a "Letter of Credit" and collectively, "Letters of Credit") from time to time up to and including June 30, 2005; provided however, that the aggregate of
all undrawn amounts, and all amounts drawn and unreimbursed, under any Letters of Credit issued under the Letter of Credit Line shall not at any time exceed
the principal amount of Three Million Five Hundred Thousand Dollars ($3,500,000.00). 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 June 30, 2005. Each Letter of Credit shall be subject to
the additional terms of the Letter of Credit agreements, applications and any related documents required by Bank in connection with the issuance thereof
(each, a "Letter of Credit Agreement").
(b) Repayment of Drafts. Each drawing paid under any Letter of Credit shall be repaid by Borrower in accordance with the provisions of the applicable
Letter of Credit Agreement.
SECTION 1.2. INTEREST/FEES.
(a) Interest. The outstanding principal balance of each credit subject hereto shall bear interest, and the amount of each drawing paid under the
Commercial/Standby Letter of Credit shall bear interest from the date such drawing is paid to the date such amount is fully repaid by Borrower, at the rate of
interest set forth in each promissory note or other instrument or document executed in connection therewith.
(b) Computation and Payment. Interest shall be computed on the basis of a 360-day year, actual days elapsed. Interest shall be payable at the times and
place set forth in each promissory note or other instrument or document required hereby.
(c) Commitment Fee. Borrower shall pay to Bank a non-refundable commitment fee for the Letter of Credit Line equal to one quarter of one percent
(0.250%), which fee shall be due and payable in full upon the execution of this agreement.
(d) Unused Commitment Fee. Borrower shall pay to Bank a fee equal to one eighth of one percent (0.125%) per annum (computed on the basis of a 360-
day year, actual days elapsed) on the average daily unused amount of the Letter of Credit Line, which fee shall be calculated on a quarterly basis by Bank and
shall be due and payable by Borrower in arrears each May 1, August 1 and November 1.
(e) Letter of Credit Fees. Borrower shall pay to Bank fees upon the issuance of each Letter of Credit, upon the payment or negotiation of each drawing
under any Letter of Credit and upon the occurrence of any other activity with respect to any Letter of Credit (including without limitation, the transfer,
amendment or cancellation of any Letter of Credit) determined in accordance with Bank's standard fees and charges then in effect for such activity.
SECTION 1.3. COLLATERAL.
As security for all indebtedness of Borrower to Bank subject hereto, Borrower hereby grants to Bank security interests of first priority in all Borrower's
securities account #12050000 maintained with Wells Capital Management.
All of the foregoing shall be evidenced by and subject to the terms of such security agreements, financing statements, deeds of trust and other documents
as Bank shall reasonably require, all in form and substance satisfactory to Bank. Borrower shall reimburse Bank immediately upon demand for all costs and
expenses incurred by Bank in connection with any of the foregoing security, including without limitation, filing and recording fees and costs of appraisals,
audits and title insurance.
ARTICLE II
REPRESENTATIONS AND WARRANTIES