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.

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