OSTK » Topics » Item 1.01 Entry into a Material Definitive Agreement.

This excerpt taken from the OSTK 8-K filed Jan 26, 2009.

Item 1.01               Entry into a Material Definitive Agreement.

 

On January 21, 2009, Overstock.com, Inc. (the “Company”) entered into a Note Purchase Agreement, First Amendment to Stock Purchase Agreement and First Amendment to Sub-Lease Agreement, by and among the Company, Mountain Reservations, Inc., (“Mountain”) and Castles Travel, Inc. (“Castles Travel”) dated January 21, 2009 (the “Note Purchase Agreement”).  Previously, on August 25, 2007 the Company entered into a Stock Purchase Agreement (the Stock Purchase Agreement), pursuant to which the Company sold all of its interest in the outstanding capital stock of OTravel.com, Inc, (“OTravel”) to Castles Travel, which Stock Purchase Agreement required the delivery to the Company of senior and subordinated promissory notes made by OTravel in the aggregate principal amount of $6.0 million. The $3.0 million Senior Promissory Note (“Senior Note”) was secured by all of the capital stock of OTravel, to be held in possession of the Company, and the Senior Note was payable on the third anniversary of the sale.  The $3.0 million Subordinated Promissory Note (“Junior Note”) was unsecured, and was payable on the fifth anniversary of the sale. Prior to the transaction, Mountain had requested that the Company subordinate its Senior Note in connection with a necessary, third-party capital infusion for Mountain.  Discussions between the parties ensued and resulted in the Company’s agreement to sell the notes to Mountain. In the Note Purchase Agreement, the Company sold both the Senior and Junior Notes for $1,250,000.00 in cash, and agreed that the notes were thereafter canceled.  The parties also amended the Stock Purchase Agreement to remove a non-compete provision to allow the Company to engage in the sale of travel-related services   Reference is hereby made to the terms of the Note Purchase Agreement, a copy of which is filed herewith as Exhibit 10.1, for additional information regarding the terms of the Purchase Agreement.

 

This excerpt taken from the OSTK 8-K filed Dec 17, 2008.

Item 1.01                    Entry into a Material Definitive Agreement.

 

On December 16, 2008, Overstock.com, Inc. (the “Company”) entered into a First Amendment to Lease (the “Amendment”) amending the terms of the Lease Agreement (the “Lease”) with Natomas Meadows, LLC (“Natomas”).  The Lease is for a 686,865 square foot warehouse facility, located at 4800 West 1862 South, Salt Lake City, Utah (the “New Warehouse”).  The Amendment provides for financing of the costs of certain tenant improvements to the New Warehouse, consisting of a Company call center and related facilities, constructed within the New Warehouse at a total cost of $2,733,733.  The Amendment establishes that the costs for the improvements will be financed by the Company’s payment upon Amendment execution of $1,000,000 to Natomas , providing also that the Company will pay the remaining balance of $1,733,733 (the “Remaining Balance”), together with interest of  9% on that remaining amount, by an increase of  $27,428 in the base rent the Company shall pay to Natomas over the term of the Lease.  The increase in base rent will, commence on January 1, 2009 and continue through February 28, 2016.  Also in connection with the financing, the Amendment specifies the Company will provide to Natomas a short term loan of $750,000, to be repaid no later than December 30, 2008, and that the Company will also provide to Natomas a letter of credit in the amount of $1,000,000 upon which Natomas may draw in the event that the Company either fails to make a payment of base rent when due or fails to replace the letter of credit annually with another letter of credit, 30 days before the letter of credit’s expiration.  Other changes to the Lease accomplished by the Amendment are a two-month extension in the termination date of the Lease: from December 31, 2015 to February 28, 2016; provisions for liquidated damages payable to Natomas in the event of an uncured default in the payment of  base rent, which damages shall be the unamortized principal amount of the Remaining Balance,  reduced by the intervening payments of additional rent, such liquidated damages being in addition to other damages to which Natomas may otherwise be entitled; the establishment of  a staged  rent credit available to the Company upon the Company’s vacation of other warehouse space currently leased from Natomas,  which credit shall run through May 31, 2010; and providing for cooperation between Natomas and the Company in the construction of any future tenant improvements to the New Warehouse.

 

Including the space now leased in the New Warehouse, the Company currently has warehouse operations in three facilities in Salt Lake City.  Over the course of the staged Natomas Lease, the Company plans to consolidate warehousing operations from three facilities to two leased warehouse facilities, in February 2009.  The warehouse operations being consolidated are located in a warehouse facility  under common ownership with Natomas.

 

Reference is hereby made to the terms of the First Amendment to Lease, a copy of which is filed herewith as Exhibit 10.1, for additional information regarding the terms of the Lease Agreement.

 

This excerpt taken from the OSTK 8-K filed Jan 15, 2008.

Item 1.01               Entry into a Material Definitive Agreement.

 

On January 14, 2008 Overstock.com, Inc. (the “Company”) entered into a Second Amendment (the “Amendment”) to the Loan and Security Agreement dated December 12, 2005 (the “Loan Agreement”) with Wells Fargo Retail Finance, LLC (“WFRF”).  The Amendment decreases the Company’s expenses and reporting obligations under the Loan Agreement until the Company requests funds under the Loan Agreement, and provides that, in addition to other conditions to any advance under the Loan Agreement, the Company must give 45 days advance notice and pay a $50,000 fee to WFRF, and WFRF must receive other information and an audit and appraisal satisfactory to WFRF.  The Amendment is filed as Exhibit 10.1 hereto and reference is hereby made to the text of the Amendment.  We have a separate credit agreement with Wells Fargo Bank, N.A., and certain of our officers and directors have banking relationships with Wells Fargo Bank, N.A.

 

This excerpt taken from the OSTK 8-K filed Jan 3, 2008.
Entry into a Material Definitive Agreement.

 

On December 31, 2007 Overstock.com, Inc. (the “Company”) entered into an Amendment (the “Amendment”) to the Credit Agreement dated February 13, 2004 (the “Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”).  The Amendment extended the expiration date of the Credit Agreement from December 31, 2007 to January 1, 2010, and decreased the interest rate on fixed rate advances under the credit facility from 1.35% above LIBOR to 1.0% above LIBOR in effect on the first day of each fixed rate term under the credit facility.  In connection with the Amendment, the Company also executed a revised Revolving Line of Credit Note note dated January 1, 2008.  The Amendment is filed as Exhibit 10.1 hereto and the Revolving Line of Credit note is filed as Exhibit 10.2 hereto, and reference is hereby made to the text of such documents.  Certain of our officers and directors have banking relationships with Wells Fargo Bank.

 

This excerpt taken from the OSTK 8-K filed Apr 25, 2007.

Item 1.01               Entry into a Material Definitive Agreement.

On April 25, 2007 Overstock.com, Inc. (the “Company”) entered into a Stock Purchase Agreement by and among the Company, OTravel.com, Inc., a wholly owned subsidiary of the Company (“OTravel”) and Castles Travel, Inc. (“Castles Travel”) dated April 25, 2007 (the “Purchase Agreement”), pursuant to which the Company sold all of the outstanding capital stock of OTravel to Castles Travel effective April 25, 2007 for $17.0 million, subject to certain post-closing adjustments to the purchase price.  The purchase price was paid by wire transfer to the Company of $11.0 million in cash and the delivery of senior and subordinated promissory notes made by OTravel in the aggregate principal amount of $6.0 million. The $3.0 million senior promissory note is secured by all of the capital stock of OTravel and is payable on the third anniversary of the sale; the $3.0 million subordinated promissory note is unsecured and is payable on the fifth anniversary of the sale.  In connection with the transactions contemplated by the Purchase Agreement, the Company terminated the escrow agreement it had previously entered into in connection with the Company’s purchase of OTravel (then named Ski West, Inc.) from the prior owners (the “Ski West Sellers”), released the amounts held in escrow under that agreement, and assigned all rights of the Company against the Ski West Sellers to Castles Travel.  Reference is hereby made to the terms of the Purchase Agreement, a copy of which is filed herewith as Exhibit 10.1, for additional information regarding the terms of the Purchase Agreement.

This excerpt taken from the OSTK 8-K filed Jul 5, 2006.

Item 1.01               Entry into a Material Definitive Agreement.

On June 30, 2006 Overstock.com, Inc. (the “Company”) entered into a letter agreement (the “Amendment”) which amends the Stock Purchase Agreement dated June 24, 2005 (the “Purchase Agreement”) by and among the Company, Ski West, Inc. (now OTravel.com, Inc.) and the former shareholders of Ski West, Inc. (the “Sellers”), as well as the escrow agreement entered into in connection with the Purchase Agreement, by (i) permitting the Company to make an unspecified claim for $750,000 against the portion of the purchase price remaining in escrow, (ii) limiting the potential liabilities of the Sellers under the Purchase Agreement and all documents relating thereto to $750,000, and (iii) providing that $750,000 shall remain in escrow until at least June 29, 2007. Reference is hereby made to the terms of the Amendment, a copy of which is filed herewith as Exhibit 10.1, for additional information regarding the terms of the Amendment.

The former shareholders of Ski West, Inc. (now OTravel.com, Inc.) are parties to the Amendment and are currently employees of OTravel.com, Inc., which is a wholly owned subsidiary of the Company.

This excerpt taken from the OSTK 8-K filed May 1, 2006.

Item 1.01 Entry into a Material Definitive Agreement

 

On April 25, 2006 the Compensation Committee of the Board of Directors of Overstock.com, Inc. (the “Company”) approved additional grants under the Company’s Performance Share Plan, including grants of 25,000 performance shares to each of Patrick Byrne, who, effective April 25, 2006, was appointed Chairman and Chief Executive Officer, and to Jason Lindsey, who, effective April 25, 2006, was appointed President and Chief Operating Officer of the Company.  Each of Dr. Byrne and Mr. Lindsey is also a member of the Board of Directors.  The terms of the grants are substantially identical to those of the grants to other officers of the Company described in the Company’s Report on Form 8-K/A filed January 31, 2006.

 

This excerpt taken from the OSTK 8-K filed Apr 4, 2006.

Item 1.01               Entry into a Material Definitive Agreement.

 

On April 3, 2006 Overstock.com, Inc. (the “Company”) obtained a Waiver from Hamblin Watsa Investment Counsel Ltd. In its capacity as the investment manager for Odyssey America Reinsurance Corporation and its insurance subsidiaries, as a holder of 3.75% Convertible Senior Notes issued by the Company (collectively, the “Holder”).

 

The Indenture relating to the 3.75% Convertible Senior Notes issued by the Company in November 2004 (the “Senior Notes”) contains a “Fundamental Change” provision as defined in Section 3.7(a) of the Indenture.  In general, and subject in all respects to the terms of the Indenture, the “Fundamental Change” provision could require the Company to offer to repurchase the outstanding Senior Notes upon the occurrence of a “Fundamental Change”, as defined in the Indenture.

 

Subject to a number of limitations, the Waiver waives any right of the Holder to require the Company to repurchase any Senior Notes then held by the Holder or any of its subsidiaries, or to otherwise make any payment to the Holder or any of its insurance subsidiaries, as a result of, or in connection with, the occurrence of any “Fundamental Change”, to the extent that the “Fundamental Change” results solely from any acquisition by Patrick Byrne and/or John Byrne and/or immediate members of the Byrne family and/or wholly-owned affiliates of Patrick Byrne or John Byrne of additional shares of the Company’s common stock or the ownership by any or all of such persons of a number of shares sufficient to constitute a “Fundamental Change” for purposes of the Indenture.

 

The Waiver provides that it will become void two years after its date.  In addition, the Waiver provides that it will become void to the extent that (1) John Byrne is no longer a director of the Company, (2) Patrick Byrne is no longer an executive officer of the Company, (3) the individual or aggregate effect of any acquisitions by the persons described above constitutes a going private transaction, (4) the Company is delisted from Nasdaq, or (5) the Company’s common stock becomes subject to any cease trade, halt or freeze order that lasts for more than one trading day.

 

To the knowledge of the Company, the Holder and/or its affiliates holds an aggregate of $23.725 million principal amount of the Senior Notes at September, 2005, the date of Holder’s latest public filing.  To the knowledge of the Company, the Holder and/or its affiliates also beneficially owned an aggregate of 1,377,470 shares of the Company’s common stock at December 31, 2005 (including shares issuable upon conversion of Senior Notes), the date of Holder’s latest public filing, representing approximately 7.1% of the Company’s outstanding common stock.  There are no other material relationships between the Company or its affiliates and any of the parties to the Waiver, other than in respect of the terms of the Waiver.  The Company paid the Holder $50,000 as partial consideration for the execution and delivery of the Waiver.

 

The Waiver is filed or furnished as Exhibit 10.1 to this Current Report on Form 8-K, and reference is hereby made to such document for a more complete description of its terms.

 

This excerpt taken from the OSTK 8-K filed Mar 6, 2006.

Item 1.01               Entry into a Material Definitive Agreement.

 

On March 1, 2006 Overstock.com, Inc. (the “Company”) entered into an Amendment No. 1 to Stock Purchase Agreement (the “Amendment”).  The Amendment amends the Stock Purchase Agreement (the “Purchase Agreement”) dated June 24, 2005 by and among the Company, Ski West, Inc. (now OTravel.com, Inc.) and the former shareholders of Ski West, Inc. by changing the time periods for the measurement of operating profits of OTravel.com, Inc. to be used for purposes of calculating a bonus pool for employees of OTravel.com, Inc. in acordance with the terms of the Purchase Agreement.  Reference is hereby made to the terms of the Amendment, a copy of which is filed herewith as Exhibit 10.1, for additional information regarding the terms of the Amendment.

The former shareholders of Ski West, Inc./OTravel.com, Inc. are parties to the Amendment and are currently employees of OTravel.com, Inc., which is a wholly owned subsidiary of the Company.

 

This excerpt taken from the OSTK 8-K filed Jan 6, 2006.

Item 1.01               Entry into a Material Definitive Agreement.

 

On December 31, 2005 Overstock.com, Inc. (the “Company”) entered into a Seventh Modification to Credit Agreement (the “Amendment”) to a Credit Agreement dated February 13, 2004 (the “Original Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”).  The Amendment extends the termination date of the Original Credit Agreement from its scheduled expiration date of December 31, 2005 to January 1, 2008 and provides for pricing and funding adjustments upon the substitution of collateral for certain assets securing the credit facility.

 

In connection with the Amendment, the Company executed a Revolving Line of Credit Note (the “Note”) to evidence the $30 million maximum principal amount available under the credit facility.  Borrowings under the credit facility are collateralized by all or substantially all of the Company’s assets.

 

The Company is a party to a Loan and Security Agreement and related security and other agreements with Wells Fargo Retail Finance, LLC, which is an affiliate of Wells Fargo.  Certain of our officers and directors have banking relationships with Wells Fargo.

 

The Amendment and Note are filed as Exhibits 10.1 and 10.2 respectively, to this Current Report on Form 8-K.

 

This excerpt taken from the OSTK 8-K filed Oct 21, 2005.

Item 1.01               Entry into a Material Definitive Agreement.

 

On October 18, 2005 Overstock.com, Inc. (the “Company”) entered into a Sixth Amendment (the “Amendment”) to a Credit Agreement dated February 13, 2004 with Wells Fargo Bank, National Association (“Wells Fargo”).  The Amendment increases the aggregate amount available under the credit facility from $20 million to $30 million.  The Amendment also eliminates the requirement that the Company maintain specified cash balances with Wells Fargo as a condition to the availability of advances under the facility, and substitutes collateral consisting of securities owned by the Company in an aggregate principal amount of $50 million to secure the Company’s obligations under the facility.

 

In connection with the Amendment, the Company executed a Second Modification to Promissory Note (the “Modification”) to modify a previously executed promissory note to the Bank so as to evidence the maximum principal amount available under the credit facility described above as $30.0 million, and to increase the interest rate on fixed rate advances under the credit facility to 1.35% above LIBOR on the first day of each fixed rate term under the credit facility.  Borrowings under the credit facility are collateralized by certain securities owned by the Company as described above.

 

The Amendment permits the Company to continue to procure letters of credit from time to time under the facility.  The aggregate amount of all outstanding letters of credit shall not exceed $15.0 million.

 

Certain of our officers and directors have banking relationships with Wells Fargo Bank.

 

The Amendment and Modification are filed as Exhibits 10.1 and 10.2 respectively, to this Current Report on Form 8-K.

 

This excerpt taken from the OSTK 8-K filed Jun 27, 2005.

Item 1.01 Entry into a Material Definitive Agreement.

 

On June 21, 2005, Overstock.com, Inc. (the “Company”) signed a Fifth Amendment (the “Amendment”) to a Credit Agreement dated February 13, 2004 with Wells Fargo Bank, National Association (the “Bank”).  The Amendment decreases the aggregate amount available under the facility from $30 million to $20 million, and decreases the amount of the cash balance the Company is required to maintain with the Bank to $21.1 million.  The Company maintains its primary depository and operating accounts at the Bank.

 

As part of the Amendment, the Company executed a promissory note (the “Note”) to the Bank for $20.0 million, or so much thereof as may be advanced and outstanding, and the previously outstanding $30 million promissory note was cancelled.  Interest on borrowings under the Note is payable monthly and accrues at either (i) one-half of one percentage point (0.50%) above LIBOR in effect on the first day or an applicable Fixed Rate Term, or (ii) at a fluctuating rate per annum determined by the Bank to be one half a percent (0.50%) above daily LIBOR in effect on each business day a change in daily LIBOR is announced by the Bank. Unpaid principal, together with accrued and unpaid interest is due on the maturity date, December 31, 2005. Borrowings under the facility are collateralized by the Company’s cash accounts described above.

 

The Amendment permits the Company to continue to procure letters of credit from time to time under the facility. The aggregate amount of all outstanding letters of credit shall not exceed $15.0 million.

 

Certain of our officers and directors have banking relationships with Wells Fargo Bank.

 

The Credit Agreement and Note are filed as Exhibits 99.1 and 99.2, respectively, to this Current Report on Form 8-K.

 

This excerpt taken from the OSTK 8-K filed Jun 24, 2005.

Item 1.01 Entry into a Material Definitive Agreement

 

On June 24, 2005 Overstock.com, Inc. (the “Company”) entered into a definitive Stock Purchase Agreement (the “Stock Purchase Agreement”) with Ski West, Inc. (“Ski West”) and all of its shareholders (the “Shareholders”).  The Stock Purchase Agreement provides for the Company’s purchase of all of the outstanding capital stock of Ski West for an aggregate of $25 million, subject to reduction under certain circumstances.  The closing is expected to occur on July 1, 2005.  A copy of the Stock Purchase Agreement is filed as Exhibit 99.1 to this Report on Form 8-K.

 

The Stock Purchase Agreement superseded a letter of intent the Company had entered into on June 20, 2005 with Ski West and certain of the Shareholders.  The letter of intent is also described in this Report on Form 8-K, but is no longer in effect.

 

The Stock Purchase Agreement contains representations and warranties of the parties, covenants, conditions to closing, indemnification provisions, non-competition agreements and other customary provisions.  The Stock Purchase Agreement also provides that Shareholders Jonathan Cardella and James Moyle (the “Founders”) will be responsible for continuing to manage the Ski West business after the acquisition.  The Stock Purchase Agreement further provides that after the closing, the Company will cause Ski West to create an annual bonus pool tied to the performance of Ski West, and that the Founders, in their sole discretion, will have the right to allocate the bonus pool among themselves and the employees of Ski West.  The Stock Purchase Agreement provides that the bonus pool will consist of a percentage of the operating profit of the Ski West business as follows:

 

(1)  Year 1 (July 1, 2005 – June 30, 2006): 50% of operating profit

(2)  Year 2 (July 1, 2006 – June 30, 2007): 33.3% of operating profit

(3)  Year 3 (July 1, 2007 – June 30, 2008): 20% of operating profit

(4)  Year 4 (July 1, 2008 – June 30, 2009): 10% of operating profit

 

On June 20, 2005 the Company entered into a letter of intent with Ski West and the Founders contemplating the purchase by the Company of all of the outstanding shares of capital stock of Ski West.  The letter of intent contemplated that the Company would pay $25 million in cash upon the closing of the acquisition and contemplated the material provisions of the Stock Purchase Agreement.  The letter of intent contemplated that it created binding obligations.  The letter of intent was superseded by the Stock Purchase Agreement described above.  A copy of the letter of intent is filed as Exhibit 99.2 to this Report on Form 8-K, but is no longer in effect.

 

There is no material relationship between the Company or its affiliates and any of the parties to the Stock Purchase Agreement or to the letter of intent other than in respect of the Stock Purchase Agreement and the letter of intent.

 

This excerpt taken from the OSTK 8-K filed Feb 11, 2005.

Item 1.01 Entry into a Material Definitive Agreement

 

On February 11, 2005, Overstock.com, Inc. (the “Company”) and Old Mill Corporate Center III, LLC (“Lessor”) entered into a Tenant Improvement Agreement (the “Agreement”) relating to office space the Company has leased in a building under construction in Salt Lake City.  The Agreement sets forth the terms on which the Company will pay the costs of certain improvements to the leased office space.  The amount of the costs is estimated to be approximately $2.0 million.  The Agreement requires the Company to reimburse the Lessor for the amount of the costs within 30 days after presentation of invoices or written requests for reimbursement.  The Agreement also requires the Company to provide either a cash deposit or a letter of credit in the amount of $500,000 to the Lessor to provide funds for the removal of the improvements upon the termination of the lease.  A copy of the Agreement is filed as Exhibit 99.1 hereto.

 

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