Overstock.com 2012 Annual Report Download - page 109

Table of Contents
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the Financing Agreement and all related agreements were secured by all or substantially all of our assets, excluding our interest in certain litigation.
Advances under the Financing Agreement bore interest at one-month LIBOR plus 2.5%. We had also entered into an interest rate cap agreement
with U.S. Bank with an effective date of October 1, 2011 which limited our exposure for one-month LIBOR at 0.5% for the term of the Financing
Agreement.
Amounts outstanding under the Financing Agreement at December 31, 2012 and December 31, 2011 were zero and $17.0 million, respectively,
and letters of credit totaling $1.8 million and $2.0 million, respectively, were issued on our behalf collateralized by compensating cash balances held at
U.S. Bank, which are included in Restricted cash in the accompanying consolidated balance sheets.
Prior to December 27, 2011, we were a party to a Master Lease Agreement and a Financial Covenants Rider and related documents (collectively,
the "Master Lease Agreement") dated September 17, 2010 with U.S. Bancorp Equipment Finance, Inc.—Technology Finance Group ("Lessor"), an
affiliate of U.S. Bank National Association. Under the Master Lease Agreement we entered into four separate leases, pursuant to which we sold certain
information technology hardware ("IT Assets") to Lessor, which were simultaneously leased back for a period of 48 months and financed certain
software licenses for a period of 48 months for proceeds totaling $16.4 million. Subsequently, we entered into eleven additional leases; whereby we
leased $8.2 million in IT Assets and financed certain software licenses directly from the Lessor. We had the right to repurchase the IT Assets at the end
of the 48-month term for $1.00. Payments on the Master Lease Agreement were due monthly. The weighted average effective interest rate under the
Master Lease Agreement was 6.29%. We had accounted for the Master Lease Agreement as a financing transaction and amounts owed were included in
Finance Obligations, current and non-current in the consolidated balance sheets. We recorded no gain or loss as a result of entering into these
transactions.
On December 27, 2011, we and the Lessor agreed to terminate the Master Lease Agreement and all related schedules. We paid approximately
$20.1 million to Lessor in connection with the amendment and agreement to terminate the Master Lease Agreement, resulting in a $1.2 million loss on
early retirement of debt included in Other income, net in our consolidated statements of operations. As of December 31, 2011 no amounts under the
finance obligations remained outstanding.
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We have a commercial purchasing card (the "Purchasing Card") agreement with U.S. Bank. We use the Purchasing Card for business purpose
purchasing and must pay it in full each month. At December 31, 2012, $3.9 million was outstanding and $1.1 million was available under the
Purchasing Card. At December 31, 2011, $3.4 million was outstanding and $1.6 million was available under the Purchasing Card.
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In November 2004, we completed an offering of $120.0 million of 3.75% Convertible Senior Notes due 2011 (the "Senior Notes"). Proceeds to us
were $116.2 million, net of $3.8 million of initial purchaser's discount and debt issuance costs. The discount and debt issuance costs were amortized
using the straight-line method which approximated the effective interest method. We recorded
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