Overstock.com 2004 Annual Report Download - page 97

(e) The Preliminary Offering Memorandum and Offering Memorandum have been prepared by the Company for use by the Initial Purchasers in
connection with the Exempt Resales. No order or decree preventing the use of the Preliminary Offering Memorandum or the Offering Memorandum, and no
order asserting that the transactions contemplated by this Agreement are subject to the registration requirements of the Act, has been issued and no proceeding
for that purpose has commenced or is pending or, to the knowledge of the Company, is contemplated.
(f) The Preliminary Offering Memorandum and the Offering Memorandum as of their respective dates and the Offering Memorandum as of any Delivery
Date, did not and will not as of such dates contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except that this representation and
warranty does not apply to statements in or omissions from the Preliminary Offering Memorandum or Offering Memorandum made in reliance upon and in
conformity with information relating to the Initial Purchasers furnished to the Company in writing by or on behalf of the Initial Purchasers expressly for use
therein as specified in Section 7(e) of this Agreement.
(g) The Company and each of its subsidiaries (as defined in Section 13) have been duly incorporated or organized and are validly existing as corporations
or other business entities in good standing under the laws of their respective jurisdictions of incorporation or organization, are duly qualified to do business
and are in good standing in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires
such qualification, except where the failure to be so qualified or to be in good standing would not have a Material Adverse Effect, and have all power and
authority necessary to own or hold their respective properties and to conduct the businesses in which they are engaged. No such subsidiary constitutes a
"significant subsidiary," as such term is defined in Rule 405 of the Rules and Regulations, of the Company. All of the issued shares of capital stock of each
corporate subsidiary of the Company have been duly and validly authorized and issued and are fully paid and non-assessable; and all of the issued and
outstanding shares of capital stock or other equity interests of each subsidiary owned by the Company, directly or indirectly, are owned free and clear of any
liens, other than those that would not have a Material Adverse Effect.
(h) The Company has an authorized capitalization as set forth in the Offering Memorandum, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and non-assessable and conform to the description thereof contained in the Offering
Memorandum; the Conversion Shares have been duly and validly authorized and reserved for issuance upon conversion of the Notes and will be free of pre-
emptive rights; all Conversion Shares, when so issued and delivered upon such conversion in accordance with the terms of the Indenture, will be duly and
validly authorized and issued, fully paid and nonassessable and free and clear of all liens, encumbrances, equities or claims.
(i) The Company has all necessary corporate right, power and authority to execute and deliver the Indenture and perform its obligations thereunder; the
Indenture has been duly authorized by the Company, and upon the effectiveness of the Registration Statement, will be qualified under the Trust Indenture Act;
on the First Delivery Date, the Indenture will have been duly executed and delivered by the Company and, assuming due authorization, execution and delivery
of the Indenture by the Trustee, will constitute a legally valid and binding agreement of the Company enforceable in accordance with its terms; and the
Indenture will conform in all material respects to the description thereof contained in the Offering Memorandum.
(j) The Company has all necessary corporate right, power and authority to execute and deliver the Registration Rights Agreement and perform its
obligations thereunder; the Registration Rights Agreement and the transactions contemplated thereby have been duly authorized by the Company; when the
Registration Rights Agreement is duly executed and delivered by the Company (assuming due authorization, execution and delivery by the Representative), it
will be a legally valid and binding agreement of the Company enforceable against the Company in accordance with its terms, except with respect to the rights
of indemnification and contribution thereunder, where enforcement thereof may be limited by federal or state securities laws or the policies underlying such
laws; the Registration Rights Agreement conforms in all material respects to the description thereof contained in the Offering Memorandum; and, except as
described in the Offering Memorandum, there are no contracts, agreements or understandings between the Company and any person other than the
Registration Rights Agreement that require the Company to (i) file a registration statement under the Act with respect to any securities of the Company or
(ii) include such securities with the Conversion Shares registered pursuant to a Registration Statement.
(k) The Company has all necessary corporate right, power and authority to execute, issue and deliver the Notes and perform its obligations thereunder;
the Notes have been duly authorized by the Company; when the Notes are executed, authenticated and issued in accordance with the terms of the Indenture
and delivered to and paid for by the Initial Purchasers pursuant to this Agreement on the respective Delivery Date, such Notes will constitute legally valid and
binding obligations of the Company, entitled to the benefits of the Indenture and enforceable in accordance with their terms; and the Notes conform in all
material respects to the description thereof contained in the Offering Memorandum.
(l) The Company has all necessary corporate right, power and authority to execute and deliver this Agreement and perform its obligations hereunder; this
Agreement has been duly authorized, executed and delivered by the Company.
(m) The execution, delivery and performance of the Operative Documents by the Company, the consummation of the transactions contemplated thereby,
and the issuance and delivery of the Conversion Shares issuable upon conversion of the Notes will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such actions result in any violation of the provisions of the charter or by-laws of the Company or any of
its subsidiaries or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties or assets; and except for the registration of the Notes under the Act, the qualification of the Indenture under the Trust
Indenture Act and such consents, approvals, authorizations, registrations or qualifications as may be required under the Exchange Act and applicable state
law, no consent, approval, authorization or order of, or filing or registration with, any such court or governmental agency or body is required for the
execution, delivery and performance of any of the Operative Documents by the Company and the consummation of the transactions contemplated thereby and
the issuance of the Conversion Shares upon conversion of the Notes.
(n) Except as described in the Offering Memorandum, the Company has not sold or issued any shares of Common Stock during the six-month period
preceding the date of the Offering Memorandum, including any sales pursuant to Rule 144A under, or Regulation D or Regulation S of, the Act, other than
shares issued pursuant to employee benefit plans, qualified stock options plans or other employee compensation plans or pursuant to outstanding options,
rights or warrants and other than the shares issued pursuant to the prospectus supplements dated May 13, 2004 and November 17, 2004.
(o) Neither the Company nor any of its subsidiaries has sustained, since the date of the latest audited financial statements included in the Offering
Memorandum, any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from