PURCHASE AGREEMENT

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Exhibit 10.34

$100,000,000

OVERSTOCK.COM, INC.

3.75% Convertible Senior Notes due 2011

PURCHASE AGREEMENT

November 17, 2004

LEHMAN BROTHERS INC.
As Representative of the Initial Purchasers
    c/o LEHMAN BROTHERS INC.
745 Seventh Avenue
New York, NY 10019

Ladies and Gentlemen:

        Overstock.com, Inc., a Delaware corporation (the " Company "), proposes, upon the terms and conditions set forth herein, to issue and sell to Lehman Brothers Inc. and the other initial purchasers identified in Schedule 1 hereto (together, the " Initial Purchasers "), for whom Lehman Brothers Inc. is acting as representative (the " Representative "), $100,000,000 in aggregate principal amount of its 3.75% Convertible Senior Notes due 2011 (the " Firm Notes "). In addition, the Company proposes to grant to the Initial Purchasers an option (the " Option ") to purchase up to an additional $20,000,000 in aggregate principal amount of Convertible Senior Notes due 2011 (the " Optional Notes " and, together with the Firm Notes, the " Notes "). The Notes will (i) have terms and provisions which are summarized in the Offering Memorandum (as defined below) and (ii) be issued pursuant to an indenture (the " Indenture ") to be entered into between the Company and Wells Fargo Bank, National Association, as trustee (the " Trustee "). Pursuant to and as set forth in the Indenture, each $1,000 principal amount of Notes shall be convertible into common stock of the Company, par value $0.0001 (the "Common Stock"), on the terms, and subject to the conditions, set forth in the Indenture. As used herein, " Conversion Shares " means the shares of Common Stock into which the Notes are convertible.

        The Notes will be offered and sold to the Initial Purchasers without registration under the Securities Act of 1933, as amended (the " Act "), in reliance on an exemption pursuant to Section 4(2) under the Act. The Company has prepared a preliminary offering memorandum, dated November 12, 2004 (the " Preliminary Offering Memorandum "), and an offering memorandum, dated November 17, 2004 (the " Offering Memorandum "), setting forth information regarding the Company and the Notes. Any references herein to the Preliminary Offering Memorandum and the Offering Memorandum shall be deemed to include all amendments and supplements thereto and all information incorporated by reference therein. The Company hereby confirms that it has authorized the use of the Preliminary Offering Memorandum and the Offering Memorandum in connection with the offering and resale of the Notes by the Initial Purchasers.

        You have advised the Company that you will make offers (the " Exempt Resales ") of the Notes purchased by you hereunder on the terms set forth in the Offering Memorandum only to persons you reasonably believe to be qualified institutional buyers as defined in Rule 144A under the Act (each, a " Qualified Institutional Buyer ") in reliance on Rule 144A under the Act. You will offer the Notes initially at a price equal to 100% of the principal amount thereof. You may change such price at any time without notice.

        Holders of the Notes (including the Initial Purchasers and their direct and indirect transferees) will be entitled to the benefits of a Registration Rights Agreement, dated as of the First Delivery Date (as defined herein), between the Company and the Representative (the " Registration Rights Agreement "), pursuant to which the Company will agree to file with the Securities and Exchange Commission (the " Commission ") one or more shelf registration statements pursuant to Rule 415 under the Act (each a " Registration Statement ") covering the resale of the Notes and the Conversion Shares, and to use its commercially reasonable efforts to cause the Registration Statement to be declared effective.

        This Agreement, the Indenture, the Notes and the Registration Rights Agreement are referred to herein collectively as the " Operative Documents ."

        1.     Representations, Warranties and Agreements of the Company.     The Company represents, warrants and agrees that:

        (a) Since the date as of which information is given in the Preliminary Offering Memorandum, there has been no material adverse change in the general affairs, management, financial condition, results of operations, stockholders' equity, cash flow, business or prospects of the Company and its subsidiaries, taken as a whole, whether or not arising in the ordinary course of business (a " Material Adverse Effect ").

        (b) When the Notes are issued and delivered pursuant to this Agreement, they will not be deemed to be, for purposes of Rule 144A, of the same class (within the meaning of Rule 144A under the Act) as securities of the Company that are listed on a national securities exchange registered under Section 6 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or that are quoted in a United States automated inter-dealer quotation system.

        (c) Assuming the accuracy of the representations and warranties of the Initial Purchasers contained in Section 6 and their compliance with the agreements set forth therein, it is not necessary, in connection with the issuance and sale of the Notes to the Initial Purchasers and the offer, resale and delivery of the Notes by the Initial Purchasers in the manner contemplated by this Agreement, the Indenture, the Registration Rights Agreement and the Offering Memorandum, to register the Notes or the Conversion Shares under the Act or to qualify the Indenture under the Trust Indenture Act of 1939, as amended (the " Trust Indenture Act ").

        (d) The Company is an issuer that is subject to filing requirements under Section 13 or 15(d) of the Exchange Act.

        (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 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 warrants), (ii) incurred any liability or obligation, direct or contingent, other than liabilities and obligations which were incurred in the ordinary course of business, (iii) entered into any transaction not in the ordinary course of business or (iv) declared or paid any dividend on its capital stock.

        (cc) The Company (i) makes and keeps accurate books and records and (ii) maintains internal accounting controls which provide reasonable assurance that (A) transactions are executed in accordance with management's authorization, (B) transactions are recorded as necessary to permit preparation of its financial statements and to maintain accountability for its assets, (C) access to its assets is permitted only in accordance with management's authorization and (D) the reported accountability for its assets is compared with existing assets at reasonable intervals.

        (dd) Neither the Company nor any of its subsidiaries (i) is in violation of its charter or by-laws, (ii) is in default in any material respect, and no event has occurred which, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any material indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a party or by which it is bound or to which any of its properties or assets is subject or (iii) is in violation in any material respect of any law, ordinance, governmental rule, regulation or court decree to which it or its property or assets may be subject or has failed to obtain any material license, permit, certificate, franchise or other governmental authorization or permit necessary to the ownership of its property or to the conduct of its business.

        (ee) Neither the Company nor any of its subsidiaries, nor any director, officer, agent, employee or other person associated with or acting on behalf of the Company or any of its subsidiaries, has used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.

        (ff) There has been no storage, disposal, generation, manufacture, refinement, transportation, handling or treatment of toxic wastes, medical wastes, hazardous wastes or hazardous substances by the Company or any of its subsidiaries (or, to the knowledge of the Company, any of their predecessors in interest) at, upon or from any of the property now or previously owned or leased by the Company or its subsidiaries in violation of any applicable law, ordinance, rule, regulation, order, judgment, decree or permit or which would require remedial action under any applicable law, ordinance, rule, regulation, order, judgment, decree or permit, except for any violation or remedial action which would not have, singularly or in the aggregate with all such violations and remedial actions, a Material Adverse Effect; there has been no material spill, discharge, leak, emission, injection, escape, dumping or release of any kind onto such property or into the environment surrounding such property of any toxic wastes, medical wastes, solid wastes, hazardous wastes or hazardous substances due to or caused by the Company or any of its subsidiaries or with respect to which the Company or any of its subsidiaries have knowledge, except for any such spill, discharge, leak, emission, injection, escape, dumping or release which would not have, singularly or in the aggregate with all such spills, discharges, leaks, emissions, injections, escapes, dumpings and releases, a Material Adverse Effect. The terms "hazardous wastes," "toxic wastes," "hazardous substances" and "medical wastes" shall have the meanings specified in any applicable local, state, federal and foreign laws or regulations with respect to environmental protection.

        (gg) Neither the Company nor any subsidiary of the Company is, nor as of the Delivery Date will be, an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder.

        (hh) None of the Company or any of its affiliates (as defined in Rule 501(b) of Regulation D under the Act ("Regulation D")) has, directly or through an agent (other than the Initial Purchasers, about which no representation is made by the Company), engaged in any form of general solicitation or general advertising in connection with the offering of the Notes (as those terms are used in Regulation D) under the Act or in any manner involving a public offering within the meaning of Section 4(2) of the Act; the Company has not entered into any contractual arrangement with respect to the distribution of the Notes except for this Agreement and the Company will not enter into any such arrangement except for the Registration Rights Agreement.

        (ii) Neither the Company nor, to its knowledge, any of its affiliates has taken, directly or indirectly, any action designed to cause or result in, or which has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company in connection with the offering of the Notes.

        (jj) The statistical and market-related data included in the Offering Memorandum are based on or derived from sources that the Company believes to be reliable and accurate in all material respects.

        2.     Purchase, Sale and Delivery of Notes.     

        (a) Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company agrees to sell to the Initial Purchasers, and the Initial Purchasers agree, severally and not jointly, to purchase from the Company, at a purchase price of 97% of the principal amount thereof (the "purchase price"), the aggregate principal amount of Firm Notes set forth opposite that Initial Purchaser's name in Schedule 1 hereto.

        Delivery of and payment for the Firm Notes shall be made at the office of Cleary, Gottlieb, Steen & Hamilton, One Liberty Plaza, New York, New York 10006, at 10:00 a.m. (New York time) on the fourth full business day following the date of this Agreement, or at such other date or place as shall be determined by agreement between the Initial Purchasers and the Company (such date and time of delivery and payment for the Firm Notes being herein called the " First Delivery Date "). Delivery of the Firm Notes shall be made to the Initial Purchasers against payment of the purchase price by the Initial Purchasers. Payment for the Firm Notes shall be effected either by wire transfer of immediately available funds to an account with a bank in The City of New York, the account number and the ABA number for such bank to be provided by the Company to the Initial Purchasers at least two business days in advance of the First Delivery Date, or by such other manner of payment as may be agreed by the Company and the Initial Purchasers.

        (b) Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company hereby grants the Option to the Initial Purchasers to purchase the Optional Notes at the same price as the Initial Purchasers shall pay for the Firm Notes. The Option may be exercised at the sole discretion of the Initial Purchasers. The Option may be exercised once in whole or in part at any time not more than 30 days subsequent to the date of this Agreement upon notice in writing or by facsimile by the Representative to the Company setting forth the amount (which shall be an integral multiple of $1,000) of Optional Notes as to which the Initial Purchasers are exercising the Option and which Initial Purchaser or Initial Purchasers, severally and not jointly, are exercising such option.

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