Overstock.com 2004 Annual Report Download - page 98

any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Offering Memorandum; and, since such
date, there has not been any change in the capital stock or long-term debt of the Company or any of its subsidiaries or any Material Adverse Effect, or any
development that could reasonably be expected to have a Material Adverse Effect, otherwise than as set forth or contemplated in the Offering Memorandum.
(p) The financial statements (including the related notes and supporting schedules) incorporated by reference in the Offering Memorandum present fairly
the financial condition and results of operations of the entities purported to be shown thereby, at the dates and for the periods indicated, and have been
prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved, except as otherwise
disclosed therein and subject, in the case of interim financial statements, to normal year-end adjustments, none of which, individually or in the aggregate, shall
result in any material adverse change thereto.
(q) PricewaterhouseCoopers LLP, who have certified certain financial statements of the Company, whose report is incorporated by reference in the
Offering Memorandum and who have delivered the initial letter referred to in Section 5(e) hereof, is an independent registered public accounting firm as
required by the Act and the rules and regulations promulgated thereunder.
(r) Neither the Company nor its subsidiaries owns any real property. The Company and its subsidiaries have good and marketable title to all personal
property owned by them, in each case free and clear of all liens, encumbrances and defects, except such as are described in the Offering Memorandum or such
as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries; and all assets held under lease by the Company and its subsidiaries are held by them under valid, subsisting and enforceable
leases, with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the
Company and its subsidiaries.
(s) The Company and each of its subsidiaries carry, or are covered by, insurance in such amounts and covering such risks as the Company considers
adequate for the conduct of their respective businesses and the value of their respective properties and as is customary for companies engaged in similar
businesses in similar industries.
(t) Except as set forth or contemplated in the Offering Memorandum, the Company and each of its subsidiaries own, or possess adequate rights to use, all
material patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights and licenses
(collectively, the "Intellectual Property") necessary for the conduct of their respective businesses and no valid U.S. patent is, or to the knowledge of the
Company would be, infringed by the activities of the Company or any of its subsidiaries in the use or sale of any product or service as described in the
Offering Memorandum. There are no actions, suits or judicial proceedings pending relating to patents or proprietary information to which the Company and
each of its subsidiaries are parties or of which any property of the Company and each of its subsidiaries is subject, and, to the knowledge of the Company, no
actions, suits or judicial proceedings are threatened by governmental authorities, except as set forth or contemplated in the Offering Memorandum or as
disclosed to the Representative in writing. The Company is not aware of, except as set forth or contemplated in the Offering Memorandum, any claim by
others that the Company or any of its subsidiaries is infringing or otherwise violating any patents or other intellectual property rights of others and is not
aware of any rights of third parties to any of the Company and its subsidiaries' patent applications, licensed patents or licenses which could affect materially
the use thereof by the Company and its subsidiaries.
(u) There are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or to which any property or assets
of the Company or any of its subsidiaries is the subject which, if determined adversely to the Company or any of its subsidiaries, would reasonably be
expected to have a Material Adverse Effect; and to the best of the Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(v) There are no contracts or other documents which would be required to be described in the Offering Memorandum if the Offering Memorandum were
a prospectus included in a registration statement on Form S-1 that have not been so described in the Offering Memorandum or incorporated therein by
reference.
(w) No relationship, direct or indirect, exists between or among the Company on the one hand, and the directors, officers, stockholders, customers or
suppliers of the Company on the other hand, which would be required to be described in the Offering Memorandum if the Offering Memorandum were a
prospectus included in a registration statement on Form S-1 that have not been so described in the Offering Memorandum or incorporated therein by
reference.
(x) No labor disturbance by the employees of the Company or any of its subsidiaries exists or, to the knowledge of the Company, is imminent, which
might be expected to have a Material Adverse Effect.
(y) The Company is in compliance in all material respects with all presently applicable provisions of the Employee Retirement Income Security Act of
1974, as amended, including the regulations and published interpretations thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension plan" (as defined in ERISA) for which the Company would have any liability; the Company has not incurred and does not expect
to incur liability under (i) Title IV of ERISA with respect to the termination of, or withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations and published interpretations thereunder (the "Code"); and each "pension plan" for
which the Company would have any liability that is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects and
nothing has occurred, whether by action or by failure to act, which would cause the loss of such qualification.
(z) The Company has timely and properly filed with the Commission all reports and other documents required to have been filed by it with the
Commission pursuant to the Exchange Act and the rules and regulations promulgated under the Exchange Act.
(aa) The Company has filed all federal, state and local income and franchise tax returns required to be filed through the date hereof and has paid all taxes
due thereon, and no tax deficiency has been determined adversely to the Company or any of its subsidiaries which has had (nor does the Company have any
knowledge of any tax deficiency which, if determined adversely to the Company or any of its subsidiaries, might have) a Material Adverse Effect.
(bb) Since the date as of which information is given in the Preliminary Offering Memorandum through the date hereof, and except as may otherwise be
disclosed in the Offering Memorandum, the Company has not (i) issued or granted any securities (except for shares issued pursuant to outstanding options or