Letter Agreement Regarding Escrow Claim and Liability Cap between Overstock.com, Inc. and OTravel.com, Inc. Sellers
This agreement is between Overstock.com, Inc. and the sellers of OTravel.com, Inc. It modifies a previous escrow arrangement by allowing Overstock.com to make a $750,000 claim against the escrow fund, with the sellers agreeing not to dispute this claim. In return, the sellers' total liability under the related stock purchase agreement is capped at $750,000. The claim will remain in escrow until June 29, 2007, after which both parties will decide on its disbursement or extension. Both sides will share escrow agent fees equally. All other terms of the original agreements remain in effect.
Exhibit 10.1
| Overstock.com, Inc. | |
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| 6350 South 3000 East |
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| Salt Lake City, UT 84121 |
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| Phone: (801) 947-3100 |
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| Fax: (801) 944-4629 |
June 30, 2006
Jonathan Cardella
Alan Mao
OTravel.com, Inc.
6350 S. 3000 E.
Salt Lake City, UT 84121
James Moyle
Thomas Raudorf
Joe Illescas
OTravel.com, Inc.
1700 Park Avenue
Park City, UT 84060
Re: Letter Agreement Regarding that Escrow Agreement Dated July 1, 2005 by and between Overstock.com, Inc. and Jonathan Cardella, James Moyle, Thomas Raudorf, Joe Illescas and Alan Mao
Messrs Cardella, Moyle, Raudorf, Illescas and Mao:
This letter agreement (“Letter Agreement”) sets forth the understanding between Overstock.com, Inc. (“Purchaser”) and Jonathan Cardella, James Moyle, Thomas Raudorf, Joe Illescas and Alan Mao (“Sellers”) with respect to that Escrow Agreement dated July 1, 2005 as contemplated in the Stock Purchase Agreement (“SPA”) dated June 24, 2005 by and among Purchaser and Sellers.
Sellers agree to allow Purchaser to make an unspecified Claim in the amount of $750,000.00 (“Reserved Claim”) against the Escrow Fund ($1,875,000 plus increases of any earnings thereon) and for which Sellers will not submit a Counter Notice in exchange for Purchaser capping any and all past, present and future liabilities of Sellers arising out of the SPA and any documents relating thereto at $750,000.00. The Reserved Claim shall remain in escrow until June 29, 2007 at which time the parties shall mutually agree on how the Reserved Claim shall be disbursed or whether there is reason to extend. Purchaser and Sellers shall be jointly responsible (50% for Purchaser and 50% for Sellers) to pay all Escrow Agent compensation. All terms of the Escrow Agreement and Stock Purchase Agreement not modified herein shall remain in effect. However, for avoidance of doubt all Claims made prior to June 29, 2007 shall survive. This Letter Agreement is intended to be relied upon only by Escrow Agent, Purchaser and Seller, their successors and assigns, but shall in no way be interpreted to benefit any other third party. This
Letter Agreement may be executed in any number of counterparts, each of which shall be deemed an original and together which shall constitute one and the same instrument.
| Sincerely, |
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| /s/ Jonathan E. Johnson, III |
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| Jonathan E. Johnson, III |
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| SVP, Corporate Affairs |
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| AGREED TO AND ACCEPTED BY: |
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| /s/ Jonathan Cardella |
| 6/30/06 |
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| Jonathan Cardella |
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| /s/ James Moyle |
| 6/30/06 |
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| James Moyle |
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| /s/ Thomas Raudorf |
| 6/30/06 |
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| Thomas Raudorf |
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| /s/ Joe Illescas |
| 6/30/06 |
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| Joe Illescas |
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| /s/ Alan Mao |
| 6/30/06 |
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| Alan Mao |
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