AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 13, 2002 REGISTRATION NO. 333- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ USA INTERACTIVE (Exact name of Registrant as specified in its charter) DELAWARE 59-2712887 (State or other jurisdiction (I.R.S. Employer of incorporation or Identification Number) organization)
152 WEST 57TH STREET NEW YORK, NEW YORK 10019 (212) 314-7300 (Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices) JULIUS GENACHOWSKI, ESQ. EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY USA INTERACTIVE 152 WEST 57TH STREET NEW YORK, NEW YORK 10019 (212) 314-7300 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service) ------------------------------ With a Copy to: J. D. WEINBERG, ESQ. COVINGTON & BURLING 1330 AVENUE OF THE AMERICAS NEW YORK, NEW YORK 10019 (212) 841-1000 ------------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as practicable after this registration statement becomes effective, assuming the Registrant elects to pay a portion of the consideration for the Interval acquisition described below in shares of the Registrant's common stock, which election has not yet been made and is in the Registrant's sole discretion. See the "Explanatory Note" on the following page. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box: / / If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box: /X/ If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: / / If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: / / If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box: / / ------------------------------ CALCULATION OF REGISTRATION FEE(1) This registration statement relates to the resale by the selling stockholders named herein of the shares of common stock, par value $0.01 per share, of the Registrant ("USA common stock") listed above that may be issued, at the Registrant's sole election, in connection with the acquisition by the Registrant of Interval Acquisition Corp., as described in the accompanying prospectus. See the "Explanatory Note" on the following page. (2) Based upon the estimated maximum number of shares of USA common stock that may be issued in connection with the Interval acquisition, if the Registrant determines to exercise its election to pay a portion of the consideration for the acquisition with USA common stock, which determination has not yet been made. See the "Explanatory Note" on the following page. (3) Estimated solely for purposes of calculating the registration fee pursuant to 457(c) of the Securities Act of 1933, based on $24.48, the average of the high and low prices of USA common stock quoted on The Nasdaq National Market on June 11, 2002. (4) Estimated solely for purposes of calculating the registration fee pursuant to 457(c) of the Securities Act of 1933, based on the proposed maximum offering price per security and the number of shares of USA common stock being registered. (5) Calculated by multiplying 0.000092 by the proposed maximum aggregate offering price. ------------------------------ THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING AGGREGATE REGISTRATION SECURITIES TO BE REGISTERED(1) REGISTERED PRICE PER SECURITY OFFERING PRICE FEE Common Stock, $0.01 par value................ 11,805,555(2) $24.48(3) $289,000,000(4) $26,588(5) EXPLANATORY NOTE PURSUANT TO THE AGREEMENT AND PLAN OF MERGER FOR THE INTERVAL ACQUISITION DESCRIBED IN THE ACCOMPANYING PROSPECTUS, THE REGISTRANT HAS THE RIGHT TO ELECT, AT ITS SOLE DISCRETION, TO PAY THE CONSIDERATION FOR THE INTERVAL ACQUISITION ALL IN CASH OR BOTH IN CASH AND SHARES OF USA COMMON STOCK. IN CONNECTION WITH THE INTERVAL ACQUISITION, THE REGISTRANT AND THE SELLING STOCKHOLDERS NAMED IN THE ACCOMPANYING PROSPECTUS ENTERED INTO A REGISTRATION RIGHTS AGREEMENT PURSUANT TO WHICH THE REGISTRANT IS REQUIRED TO FILE THIS REGISTRATION STATEMENT. THE FILING OF THIS REGISTRATION STATEMENT DOES NOT REFLECT ANY DETERMINATION BY THE REGISTRANT AS TO WHETHER IT WILL ISSUE SHARES OF USA COMMON STOCK IN THE INTERVAL ACQUISITION. THE REGISTRANT'S ELECTION MAY BE MADE AT ANY TIME PRIOR TO THE CLOSING OF THE INTERVAL ACQUISITION, AND THE REGISTRANT DOES NOT EXPECT TO MAKE ITS ELECTION UNTIL SHORTLY BEFORE THE CLOSING OF THE INTERVAL ACQUISITION. THIS REGISTRATION STATEMENT AND THE ACCOMPANYING PROSPECTUS HAVE BEEN WRITTEN TO COVER THE RESALE OF USA COMMON STOCK ISSUED IN THE EVENT THAT THE REGISTRANT ELECTS TO USE STOCK IN CONNECTION WITH THE CLOSING OF THE INTERVAL ACQUISITION RATHER THAN ALL CASH CONSIDERATION. IN THE EVENT THAT THE REGISTRANT ELECTS NOT TO ISSUE ANY SHARES OF USA COMMON STOCK IN CONNECTION WITH THE CLOSING OF THE INTERVAL ACQUISITION, THE REGISTRANT WILL FILE AN AMENDMENT OR APPLICATION WITH THE SECURITIES AND EXCHANGE COMMISSION TO DEREGISTER THE USA COMMON STOCK COVERED BY, OR WITHDRAW, THIS REGISTRATION STATEMENT. THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. SUBJECT TO COMPLETION, DATED JUNE 13, 2002 PROSPECTUS [LOGO] 11,805,555 SHARES OF USA COMMON STOCK ------------------ EXPLANATORY NOTE: THIS PROSPECTUS HAS BEEN WRITTEN TO COVER THE RESALE OF SHARES OF COMMON STOCK, PAR VALUE $0.01 PER SHARE ("USA COMMON STOCK"), OF USA INTERACTIVE (FORMERLY USA NETWORKS, INC.) ("USA") ISSUABLE IN THE EVENT THAT USA ELECTS TO USE USA COMMON STOCK AS PARTIAL CONSIDERATION FOR THE ACQUISITION OF INTERVAL ACQUISITION CORP. ("INTERVAL"), RATHER THAN ALL CASH CONSIDERATION, WHICH ELECTION HAS NOT BEEN MADE. PURSUANT TO THE AGREEMENT AND PLAN OF MERGER, DATED MAY 30, 2002, AMONG USA, INTERVAL, I EXCHANGE MERGER CORP. ("MERGER SUB") AND THE SELLING STOCKHOLDERS NAMED IN THIS PROSPECTUS IN THE SECTION "SELLING STOCKHOLDERS" (THE "SELLING STOCKHOLDERS"), USA HAS THE RIGHT TO ELECT, AT ITS SOLE DISCRETION, TO PAY THE CONSIDERATION FOR THE INTERVAL ACQUISITION ALL IN CASH OR BOTH IN CASH AND SHARES OF USA COMMON STOCK. IN CONNECTION WITH THE INTERVAL ACQUISITION, USA AND THE SELLING STOCKHOLDERS ENTERED INTO A REGISTRATION RIGHTS AGREEMENT PURSUANT TO WHICH USA IS REQUIRED TO FILE A REGISTRATION STATEMENT WITH THE SECURITIES AND EXCHANGE COMMISSION THAT CONTAINS THIS PROSPECTUS. THE FILING OF THE REGISTRATION STATEMENT DOES NOT REFLECT ANY DETERMINATION BY USA AS TO WHETHER IT WILL ISSUE SHARES OF USA COMMON STOCK IN THE INTERVAL ACQUISITION. USA'S ELECTION MAY BE MADE AT ANY TIME PRIOR TO THE CLOSING OF THE INTERVAL ACQUISITION, AND USA DOES NOT EXPECT TO MAKE ITS ELECTION UNTIL SHORTLY BEFORE THE CLOSING OF THE INTERVAL ACQUISITION. IN THE EVENT THAT USA ELECTS NOT TO ISSUE ANY SHARES OF USA COMMON STOCK IN CONNECTION WITH THE CLOSING OF THE INTERVAL ACQUISITION, USA WILL FILE AN AMENDMENT OR APPLICATION WITH THE SECURITIES AND EXCHANGE COMMISSION TO DEREGISTER THE USA COMMON STOCK COVERED BY, OR WITHDRAW, THE REGISTRATION STATEMENT. This prospectus relates to the resale of up to 11,805,555 shares of USA common stock that the Selling Stockholders may offer from time to time. The USA common stock being offered by this prospectus was acquired by the Selling Stockholders in connection with USA's acquisition of Interval. USA will not receive any proceeds from the sale of USA common stock by the Selling Stockholders. Subject to the restrictions described in this prospectus, the Selling Stockholders (directly, or through agents or dealers designated from time to time) may sell the USA common stock being offered by this prospectus from time to time on terms to be determined at the time of sale. The prices at which these stockholders may sell the shares will be determined by the prevailing market price for the shares. This offering will not be underwritten. To the extent required, the number of shares of USA common stock to be sold, purchase price, public offering price, the names of any such agent or dealer and any applicable commission or discount with respect to a particular offering will be set forth in an accompanying prospectus supplement. The aggregate proceeds to the Selling Stockholders from the sale of the USA common stock being offered by this prospectus will be the purchase price thereof less the aggregate agents' or dealers' commissions and discounts, if any, and other expenses of distribution not borne by USA. The Selling Stockholders will pay all applicable stock transfer taxes, brokerage commissions, discounts or commissions and fees of the Selling Stockholders' counsel. USA has agreed to pay certain expenses in connection with the filing of the registration statement, of which this prospectus is a part, with the Securities and Exchange Commission, and to indemnify the Selling Stockholders against certain liabilities, including certain liabilities under the Securities Act of 1933, as amended (the "Securities Act"), in connection with the registration and offering of the USA common stock being offered by this prospectus. See "PLAN OF DISTRIBUTION" on page 6. The Selling Stockholders and any agents, dealers or broker-dealers that participate with the Selling Stockholders in the distribution of the USA common stock being offered by this prospectus may be deemed to be "underwriters" within the meaning of the Securities Act, and any commissions received by them and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. USA common stock is quoted on The Nasdaq National Market under the symbol "USAI." On June 12, 2002, the last reported sale price of USA common stock was $24.70 per share. SEE "RISK FACTORS" BEGINNING ON PAGE 4 TO READ ABOUT FACTORS YOU SHOULD CONSIDER IN CONNECTION WITH PURCHASING USA COMMON STOCK. --------------------- NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES IN ANY JURISDICTION WHERE SUCH AN OFFER OR SOLICITATION WOULD BE ILLEGAL. The date of this prospectus is , 2002 ABOUT THIS PROSPECTUS This prospectus is part of a registration statement that we are filing with the Securities and Exchange Commission (the "SEC") on behalf of the Selling Stockholders utilizing a "shelf" registration process. Under this shelf process, the Selling Stockholders may, from time to time over approximately the next year, sell the shares of USA common stock being offered under this prospectus in one or more offerings (subject to the restrictions described in this prospectus). This prospectus provides you with a general description of the securities that the Selling Stockholders may offer. To the extent required, the number of shares of USA common stock to be sold, purchase price, public offering price, the names of any such agent or dealer and any applicable commission or discount with respect to a particular offering by any Selling Stockholder will be set forth in an accompanying prospectus supplement. You should read both this prospectus and any prospectus supplement together with the additional information described in the section "WHERE YOU CAN FIND MORE INFORMATION" on page 2. You should rely only on the information provided in this prospectus and in any prospectus supplement, including the information incorporated by reference. We have not authorized anyone to provide you with different information. The Selling Stockholders are not offering the USA common stock being offered under this prospectus in any state where the offer is not permitted. You should not assume that the information in this prospectus, or any supplement to this prospectus, is accurate at any date other than the date indicated on the cover page of these documents. CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION This prospectus and the SEC filings that are incorporated by reference into this prospectus contain "forward-looking statements" within the meaning of the securities laws. These forward-looking statements include, but are not limited to, statements relating to our anticipated financial performance, business prospects, new developments, new merchandising strategies and similar matters, and/or statements preceded by, followed by or that include the words "believes," "could," "expects," "anticipates," "estimates," "intends," "plans," "projects," "seeks," or similar expressions. We have based these forward-looking statements on our current expectations and projections about future events, based on the information currently available to us. For those statements, we claim the protection of the safe harbors for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks, uncertainties and assumptions, including those described in the section "RISK FACTORS," that may affect the operations, performance, development and results of our business. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date of this prospectus. You should understand that the following important factors, in addition to those discussed in the documents incorporated in this prospectus by reference, could affect our future results and could cause those results to differ materially from those expressed in such forward-looking statements: - material adverse changes in economic conditions generally or in our markets; - future regulatory and legislative actions and conditions affecting our operating areas; - competition from others; - successful integration of our divisions' management structures; - product demand and market acceptance; - the ability to protect proprietary information and technology or to obtain necessary licenses on commercially reasonable terms; - the ability to expand into and successfully operate in foreign markets; - obtaining and retaining key executives and employees; and - other risks and uncertainties as may be detailed from time to time in our public announcements and filings with the SEC. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or any other reason. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this prospectus may not occur. WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and current reports, proxy statements and other information with the SEC under the Exchange Act. You may read and copy this information at the SEC's public reference room at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Our SEC filings are also available to you free of charge at the SEC's website at www.sec.gov. As allowed by SEC rules, this prospectus does not contain all the information you can find in the registration statement or the exhibits to the registration statement. The SEC allows us to "incorporate by reference" information into this prospectus, which means that we can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is deemed to be part of this prospectus, except for any information superseded by information contained directly in this prospectus. Information that we subsequently file with the SEC will automatically update this prospectus. This prospectus incorporates by reference the documents set forth below that we have previously filed with the SEC. These documents contain important information about our company and its financial condition. 1. Annual Report on Form 10-K for the year ended December 31, 2001, filed on April 1, 2002. 2. Quarterly Report on Form 10-Q for the quarter ended March 31, 2002, filed on May 15, 2002. 3. Definitive proxy statement filed on April 30, 2002. 4. Definitive proxy statement filed on March 25, 2002. 5. Current Reports on Form 8-K and amendments thereto filed on January 8, 2002; two filed on January 29, 2002; January 30, 2002; February 12, 2002; February 26, 2002; March 1, 2002; March 4, 2002; March 15, 2002; March 27, 2002; April 24, 2002; May 17, 2002; May 22, 2002; May 24, 2002; two filed on June 3, 2002; and June 5, 2002. All documents filed by USA with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus and prior to the termination of the offering are incorporated by reference into this prospectus. You may request free copies of any or all of these filings by writing or telephoning us at the following address: USA Interactive 152 West 57th Street New York, New York 10019 (212) 314-7300 Attention: Corporate Secretary Information contained on our website is not part of this prospectus. You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus. The information contained in this prospectus is accurate only as of the date of this prospectus and, with respect to material incorporated herein by reference, the dates of such referenced material. 2 SUMMARY THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION FROM THIS PROSPECTUS AND MAY NOT CONTAIN ALL THE INFORMATION THAT MAY BE IMPORTANT TO YOU. TO UNDERSTAND THE TERMS OF THE USA COMMON STOCK BEING OFFERED BY THIS PROSPECTUS, YOU SHOULD READ THIS ENTIRE PROSPECTUS AND THE DOCUMENTS IDENTIFIED UNDER THE CAPTION "WHERE YOU CAN FIND MORE INFORMATION." IN THIS PROSPECTUS, THE TERMS "USA", "WE" AND "OUR" REFER TO USA INTERACTIVE (FORMERLY USA NETWORKS, INC.) AND OUR SUBSIDIARIES, EXCEPT WHERE IT IS CLEAR THAT SUCH TERMS MEAN ONLY USA INTERACTIVE. USA INTERACTIVE USA (Nasdaq: USAI) is focused on integrating interactive assets across multiple lines of business. We believe USA is a leader in integrated interactivity, including ticketing, online travel, online dating, electronic retailing, teleservices and other interactive commerce services. USA consists of Home Shopping Network (including HSN International and HSN Interactive); Ticketmaster (Nasdaq: TMCS), which operates Ticketmaster, Ticketmaster.com, Citysearch and Match.com; Expedia, Inc. (Nasdaq: EXPE); Hotels.com (Nasdaq: ROOM); TV Travel Group Limited; Electronic Commerce Solutions; Precision Response Corporation; and Styleclick. On May 7, 2002, USA contributed all of its entertainment businesses to Vivendi Universal Entertainment LLLP (the "VUE transaction"), a new joint venture controlled by Vivendi Universal, S.A. ("Vivendi"). Immediately following such transaction, USA was renamed USA Interactive. USA's business is primarily focused on its electronic commerce and interactive/information service businesses, and USA expects that it will actively seek to grow those businesses, including through acquisitions. Any such acquisitions could involve the issuance of additional USA securities or cash or a combination of securities and cash. In addition, USA is no longer required to obtain the consent of Vivendi, Liberty Media Corporation ("Liberty") or Mr. Diller as USA stockholders for any such acquisitions regardless of the size of such acquisitions except in the event that USA is highly leveraged, in which case each of Mr. Diller and Liberty will have the right to consent to specified contingent matters involving USA. USA is continually reviewing, and often in discussions with third parties regarding, such possible growth opportunities, including transactions in the online and offline travel services and commerce-related areas. USA is incorporated under the laws of the State of Delaware. USA's executive offices are located at 152 West 57th Street, New York, New York 10019 and our telephone number is (212) 314-7300. RECENT DEVELOPMENTS On June 3, 2002, USA announced that it had delivered to the board of directors of each of Expedia, Inc., Ticketmaster and Hotels.com a letter pursuant to which USA proposed to acquire the minority interest in each of these subsidiaries that it did not already own. Each of the boards of these subsidiaries has since formed special committees comprised of all of its disinterested directors to review USA's proposal. Following the announcement by USA of the proposals, a number of complaints against USA and the boards of directors of these subsidiaries were filed in Delaware with respect to Ticketmaster and Hotels.com, California with respect to Ticketmaster and Washington with respect to Expedia, Inc. The complaints generally allege the transaction would be a breach of duty and that the indicated exchange ratio is unfair. Each of the complaints seeks, among other things, injunctive relief against consummation of the transaction and damages in an unspecified amount. The time for defendants to respond to the complaints has not yet elapsed. USA believes the allegations are without merit and intends to defend the actions vigorously. There can be no assurance that USA will acquire the minority interests in any of these subsidiaries or of the terms upon which any such acquisitions would be made. 3 RISK FACTORS AN INVESTMENT IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CONSIDER THE FOLLOWING FACTORS CAREFULLY BEFORE DECIDING TO PURCHASE OUR SECURITIES. ADDITIONAL RISKS NOT PRESENTLY KNOWN TO US OR THAT WE CURRENTLY DEEM IMMATERIAL MAY ALSO IMPAIR OUR BUSINESS OPERATIONS. WE DEPEND ON OUR KEY PERSONNEL We are dependent upon the continued contributions of our senior corporate management, particularly Mr. Diller, and certain key employees for our future success. Mr. Diller is our Chairman of the Board and Chief Executive Officer. Mr. Diller does not have an employment agreement with us, although he has been granted options to purchase a substantial number of shares of USA common stock. If Mr. Diller no longer serves in his positions at USA, our business, as well as the market price of USA common stock, could be substantially adversely affected. We cannot assure you that we will be able to retain the services of Mr. Diller or any other of our members of senior management or key employees. WE ARE CONTROLLED BY MR. DILLER AND IN HIS ABSENCE, WILL BE CONTROLLED BY LIBERTY Mr. Diller, through entities he controls, currently beneficially owns or has the right to vote 100% of the shares of our Class B common stock, par value $0.01 per share, which is sufficient to control the outcome of any matter submitted to a vote or for the consent of our shareholders with respect to which holders of USA common stock, USA Class B common stock and USA preferred stock vote together as a single class. Mr. Diller, subject to the terms of an amended and restated stockholders agreement, dated as of December 16, 2001 (the "Stockholders Agreement"), among Universal Studios, Liberty, Mr. Diller, USA and Vivendi, effectively controls the outcome of all matters submitted to a vote or for the consent of our stockholders (other than with respect to the election by the holders of USA common stock of 25% of the members of our board of directors (rounded up to the nearest whole number) and certain matters as to which a separate class vote of the holders of USA common stock or USA preferred stock is required under Delaware law). Under the Stockholders Agreement, each of Mr. Diller and Liberty has the right to consent to certain contingent matters in the event that USA is highly leveraged. We cannot assure you that Mr. Diller and Liberty will agree in the future on any transaction or action relating to a contingent matter at a time when USA is highly leveraged, in which case we would not be able to engage in such transaction or take such action. Upon Mr. Diller's permanent departure from USA, generally, Liberty would be able to control USA through its ownership of its USA Class B common stock. USE OF PROCEEDS All of the USA common stock being offered under this prospectus is being sold by the Selling Stockholders. USA will not receive any proceeds from the sale of USA common stock by the Selling Stockholders. SELLING STOCKHOLDERS SELLING STOCKHOLDERS The following table sets forth each Selling Stockholder, together with (1) the maximum number of shares of USA common stock that will be beneficially owned by such Selling Stockholder immediately following USA's acquisition of Interval and (2) the number of shares of USA common stock registered 4 for sale hereby, in each case assuming the full 11,805,555 shares which may be offered hereby are issued by us to them at that time. The USA common stock being offered under this prospectus is being offered for the account of the Selling Stockholders. - ------------------------ * Because the Selling Stockholders may sell all or a portion of the USA common stock that is being offered pursuant to this prospectus, the number of shares of USA common stock that will be owned by each Selling Stockholder upon termination of this offering cannot be determined. (1) The number of shares beneficially owned is subject to adjustment and will not be finally determined until the closing of the acquisition. (2) The registration statement of which this prospectus forms a part will also cover any additional shares of USA common stock which become issuable in connection with the shares registered for sale hereby by reason of any stock dividend, stock split, recapitalization or other similar transaction. (3) Includes 552,808.88 shares owned by CDMM Investments, L.P., a limited partnership, of which CDMM Investments, Inc. is the general partner. Craig M. Nash is the President, sole director and sole shareholder of CDMM Investments, Inc. 5
SHARES OF USA SHARES OF USA COMMON STOCK SHARES OF USA COMMON STOCK BENEFICIALLY OWNED COMMON STOCK BENEFICIALLY OWNED SELLING STOCKHOLDER PRIOR TO THE OFFERING(1) BEING OFFERED(2) AFTER THE OFFERING - ------------------- ------------------------ ---------------- ------------------ BancBoston Investments, Inc................ 767,789.00 767,789.00 * Stuart L. Bell Declaration of Trust dated 5/20/99.................................. 149,294.90 149,294.90 * Stuart L. Bell and Susan S. Bell 1999 Children's Trust......................... 71,444.45 71,444.45 * Laurence H. Bloch.......................... 38,389.45 38,389.45 * Carlson Companies, Inc..................... 976,626.62 976,626.62 * Central Florida Investments, Inc........... 235,037.46 235,037.46 * William Carl Drew.......................... 72,325.29 72,325.29 * First Union Merchant Banking 1998, LLC..... 614,231.21 614,231.21 * David C. Gilbert........................... 112,557.00 112,557.00 * Thomas B. Hunter, III...................... 19,194.73 19,194.73 * Hyatt Vacation Ownership, Inc.............. 976,626.62 976,626.62 * Jeanette E. Marbert........................ 209,529.60 209,529.60 * Marriott Ownership Resorts, Inc............ 1,552,474.30 1,552,474.30 * Richard D. Michaels Revocable Trust dated 12/2/00.................................. 7,677.88 7,677.88 * Robert A. Miller........................... 36,853.87 36,853.87 * Adeline S. Morrison........................ 19,194.73 19,194.73 * Craig M. Nash(3)........................... 1,023,462.70 1,023,462.70 * The Northwestern Mutual Life Insurance Company.................................. 614,231.21 614,231.21 * Paul W. Rishell............................ 192,177.58 192,177.58 * Heather A. Steans.......................... 35,830.15 35,830.15 * Jennifer W. Steans......................... 35,830.15 35,830.15 * Robin M. Steans............................ 35,830.15 35,830.15 * Westin Vacation Exchange Company........... 246,781.82 246,781.82 * Willis Stein & Partners, L.P.(4)........... 3,762,164.13 3,762,164.13 * (4) Willis Stein & Partners, L.L.C. is the general partner of Willis & Stein, L.P. and has the power to vote shares held by Willis & Stein, L.P., but disclaims beneficial ownership of the shares. We have filed a registration statement with the SEC, of which this prospectus forms a part, with respect to the resale of the USA common stock subject to this prospectus from time to time under Rule 415 under the Securities Act. The USA common stock being offered under this prospectus is being registered to permit public secondary trading of such USA common stock. Subject to the restrictions described in this prospectus, the Selling Stockholders may offer the USA common stock being offered under this prospectus for resale from time to time. In addition, subject to the restrictions described in this prospectus, the Selling Stockholders identified above may sell, transfer or otherwise dispose of all or a portion of the USA common stock being offered under this prospectus in transactions exempt from the registration requirements of the Securities Act. See "PLAN OF DISTRIBUTION." USA'S RELATIONSHIPS WITH THE SELLING STOCKHOLDERS Pursuant to the agreement and plan of merger, Merger Sub was merged with and into Interval at the closing of the transactions contemplated thereby, with the separate corporate existence of Merger Sub ceasing and Interval continuing as the surviving corporation. The Selling Stockholders and the other holders of Interval shares or rights to acquire Interval shares received cash and/or shares of USA common stock in exchange for their Interval shares or rights to acquire Interval shares. The USA common stock issued to the Selling Stockholders in connection with the Interval acquisition, all of which is being offered under this prospectus, were issued pursuant to an exemption from the registration requirements of the Securities Act. In connection with the agreement and plan of merger, we and the Selling Stockholders entered into a registration rights agreement, pursuant to which we granted registration rights relating to the USA common stock being offered under this prospectus. Pursuant to that registration rights agreement, USA filed a registration statement, of which this prospectus is a part, with respect to the USA common stock subject to this prospectus on June 13, 2002. The registration rights agreement is filed as an exhibit to that registration statement and incorporated herein by reference. As a result of USA's acquisition of Interval, W. Carl Drew, David C. Gilbert, Jeanette E. Marbert, Paul W. Rishell and Craig M. Nash, each a Selling Stockholder, have become employees of a subsidiary of USA. In connection with USA's acquisition of Interval, Messrs. Drew, Gilbert and Nash and Ms. Marbert have entered into a stock purchase and stockholders' agreement with USA and Interval pursuant to which they have purchased shares of Interval. In the ordinary course of business, USA and some of our subsidiaries may be parties to various commercial arrangements with Marriott Ownership Resorts, Inc., Carlson Companies, Inc. and the Northwestern Mutual Life Insurance Company, each a Selling Stockholder, or parties to which they may be related, all of which arrangements were negotiated on an arm's-length basis and none of which are material to USA. PLAN OF DISTRIBUTION METHOD OF SALE Subject to the restrictions contained in the agreement and plan of merger and the registration rights agreement, the Selling Stockholders may sell the USA common stock being offered under this prospectus directly to other purchasers, or to or through broker-dealers or agents, in separate transactions or in a single transaction. To the extent required, the number of shares of USA common stock to be sold, purchase price, public offering price, the names of any such agent or dealer and any applicable commission or discount with respect to a particular offering will be set forth in an accompanying prospectus supplement. 6 Subject to the restrictions described in this prospectus, the shares of USA common stock being offered under this prospectus may be sold from time to time by the Selling Stockholders in any of the following ways: - The USA common stock may be sold through a broker or brokers, acting as principals or agents. Transactions through broker-dealers may include block trades in which brokers or dealers will attempt to sell the USA common stock as agent but may position and resell the block as principal to facilitate the transaction. The USA common stock may be sold through dealers or agents or to dealers acting as market makers. Broker-dealers may receive compensation in the form of discounts, concessions, or commissions from the Selling Stockholders and/or the purchasers of the USA common stock for whom such broker-dealers may act as agents or to whom they sell as principal, or both (which compensation as to a particular broker-dealer might be in excess of customary commissions). - The USA common stock may be sold on any national securities exchange or quotation service on which the USA common stock may be listed or quoted at the time of sale, in the over-the-counter market, or in transactions otherwise than on such exchanges or services or in the over-the-counter market. - The USA common stock may be sold in private sales directly to purchasers. The Selling Stockholders may enter into hedging transactions with counterparties (including broker-dealers), and the counterparties may engage in short sales of the USA common stock in the course of hedging the positions they assume with the Selling Stockholders, including, without limitation, in connection with distribution of the USA common stock by such counterparties. Such counterparties may receive compensation in the form of underwriting discounts, concessions or commissions from the Selling Stockholders or the purchasers of the USA common stock for whom they may act as agents. In addition, the Selling Stockholders may sell short the USA common stock, and in such instances, this prospectus may be delivered in connection with such short sales and the USA common stock offered hereby may be used to cover such short sales. The Selling Stockholders may also enter into option or other transactions with counterparties that involve the delivery of the USA common stock to the counterparties, who may then resell or otherwise transfer such USA common stock. The Selling Stockholders may also loan or pledge the USA common stock and the borrower or pledgee may sell the USA common stock as loaned or upon a default may sell or otherwise transfer the pledged USA common stock. However, pursuant to the agreement and plan of merger, until 70% or more of the shares of USA common stock issuable to the Selling Stockholders under the agreement and plan of merger has been sold (and except for any transaction in respect of any recognized market index), each of the Selling Stockholders is required to consult with USA regarding any sale, pledge or hedging transaction of the shares of USA common stock such Selling Stockholder plans on entering into and inform USA of the financial terms of such proposed transaction, and if USA provides an alternative third party who will provide a sale, pledge or hedging transaction having substantially equivalent financial terms within one business day of being informed by such Selling Stockholder of the proposed transaction, then such Seller or Sellers shall execute such transaction through the third party selected by USA. Except as provided herein, the Selling Stockholders will act independently of USA in making decisions with respect to the timing, manner and size of each sale. The term "Selling Stockholders" includes permitted assignees of the Selling Stockholders under the registration rights agreement. A permitted assignee is a person who: - has been transferred shares covered by this prospectus from a Selling Stockholder with the prior written consent of the parties to the registration rights agreement, 7 - is a member of a selling stockholder's "holder group", as defined in the registration rights agreement, or - is a "charity", as defined in the registration rights agreement, provided such person, member or charity has agreed in writing with the Selling Stockholders and USA to be bound by and comply with all the provisions of the registration rights agreement, and provided, further, that USA has received a written acknowledgement and agreement from such person, member or charity that is in form and substance reasonably satisfactory to USA that such person, member or charity agrees to be bound with respect to the transferred shares covered by this prospectus to all the provisions of the registration rights agreement and that such person, member or charity is bound by and a party to the registration rights agreement. Persons who are members of a Selling Stockholder's holder group include: - the Selling Stockholder, - a Selling Stockholder's spouse, parents, siblings and lineal descendants, - a trust for the benefit of any of the foregoing, - any individual, corporation, partnership, trust, other entity or group (which term shall include a "group" as such term is defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended), directly or indirectly controlling, controlled by or under common control with such Selling Stockholder, members of such Selling Stockholder's immediate family and lineal descendants or trusts for the benefit of any of the foregoing, and - upon the death of the Selling Stockholder, the Selling Stockholder's estate, executors, administrators and personal representatives, and heirs, legatees and distributees, except that a Selling Stockholder's parent or parents shall only be considered to be a member of such Selling Stockholder's "holder group", as defined in the registration rights agreement, if the selling stockholder offers, sells, contracts to sell or otherwise disposes of any shares of USA common stock covered by this prospectus to such parent, and then, the parent shall only be considered a member of such Selling Stockholder's holder group with respect to such shares. USA common stock covered by this prospectus which qualifies for sale pursuant to Rule 144 of the Securities Act may be sold under Rule 144 rather than pursuant to this prospectus. The Selling Stockholders reserve the right to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of USA common stock to be made directly or through agents. In order to comply with securities laws in certain jurisdictions, the USA common stock being offered under this prospectus will be offered or sold in such jurisdictions only through registered or licensed brokers or dealers. In addition, in certain jurisdictions the securities offered hereby may not be offered or sold unless they have been registered or qualified for sale in such jurisdictions or an exemption from registration or qualification is available and is complied with. 8 VOLUME LIMITATION Under the registration rights agreement entered into in connection with the Interval acquisition, until the first anniversary of the Interval acquisition, each of the Selling Stockholders to whom 50,000 or more shares of USA common stock are issuable under the agreement and plan of merger has agreed that, after 70% or more of the USA common stock issuable to the Selling Stockholders under the agreement and plan of merger has been sold and USA has notified the Selling Stockholders of such fact, such Selling Stockholder will not transfer or sell, during any trading day, an aggregate number of shares of USA common stock equal to 10% or more of the USA common stock issuable to such Selling Stockholder under the agreement and plan of merger. TIMING AND PRICE The shares of USA common stock being offered under this prospectus may be sold from time to time by the Selling Stockholders. There is no assurance that the Selling Stockholders will sell or dispose of any or all of their shares of USA common stock. Under the registration rights agreement entered into with the Selling Stockholders, we are required to keep the registration statement of which this prospectus is a part effective until the earlier of the date on which the Selling Stockholders no longer hold the USA common stock or the first anniversary of the closing of the Interval acquisition. The Selling Stockholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, which provisions may limit the timing of purchases and sales of USA common stock by them. The USA common stock being offered under this prospectus may only be sold in transactions that consist of trades executed at prevailing market prices (excluding any discount or commission received by the brokers through which such trade is effected) obtainable at the time of such transaction through brokers, acting as principal or agent, in transactions on the Nasdaq National Market or such other national securities exchange on which the shares of USA common stock are then listed. PROCEEDS, COMMISSIONS AND EXPENSES The aggregate proceeds to the Selling Stockholders from the sale of the USA common stock offered by them under this prospectus will be the purchase price of such USA common stock less discounts, concessions and commissions, if any. USA will not receive any proceeds from the sale of USA common stock by the Selling Stockholders. The Selling Stockholders will be responsible for payment of commissions, concessions and discounts of dealers or agents. The Selling Stockholders will pay for the fees and expenses of their counsel, as well as all applicable stock transfer taxes, brokerage commissions, discounts or commissions. We will pay any printing costs, SEC filing fees and other fees, disbursements and out-of-pocket expenses and costs incurred by us in connection with the preparation of the registration statement of which this prospectus is a part and in complying with all applicable securities and blue sky laws. The Selling Stockholders and any broker-dealers or agents that participate with the Selling Stockholders in the distribution of the USA common stock may be deemed to be "underwriters" within the meaning of the Securities Act, and any commissions received by them and any profit on the resale of the USA common stock may be deemed to be underwriting commissions or discounts under the Securities Act. Under the registration rights agreement described above, USA has agreed to indemnify the Selling Stockholders against certain liabilities, including certain liabilities arising under the Securities Act. The Selling Stockholders may agree to indemnify any agent, dealer or broker-dealer that participates in 9 transactions involving sales of the USA common stock against certain liabilities, including liabilities arising under the Securities Act. NASDAQ LISTING STATUS USA common stock is currently listed on the Nasdaq National Market under the symbol "USAI." DESCRIPTION OF USA COMMON STOCK Set forth below is a description of the USA common stock being offered under this prospectus. The following statements are brief summaries of, and are subject to the provisions of, our restated certificate of incorporation, as amended, our amended and restated by-laws, and the relevant provisions of the General Corporation Law of the State of Delaware. As of the date of this prospectus, our authorized capital stock consists of 1,600,000,000 shares of USA common stock, par value $0.01 per share, 400,000,000 shares of USA Class B common stock, par value $0.01 per share, and 100,000,000 shares of preferred stock, par value $0.01 per share. As of May 31, 2002, there were 351,924,103 shares of USA common stock outstanding, 63,033,452 shares of USA Class B common stock outstanding and 13,120,533 shares of USA preferred stock outstanding. With respect to matters that may be submitted to a vote or for the consent of our stockholders generally, including the election of directors, each holder of USA common stock, USA Class B common stock and USA preferred stock will vote together as a single class. In connection with any such vote, each holder of USA common stock is entitled to one vote for each share of USA common stock held, each holder of USA Class B common stock is entitled to ten votes for each share of USA Class B common stock held and each holder of USA preferred stock is entitled to two votes for each share of USA preferred stock held. Notwithstanding the foregoing, the holders of USA common stock, acting as a single class, are entitled to elect 25% of the total number of our directors, and, in the event that 25% of the total number of directors shall result in a fraction of a director, then the holders of USA common stock, acting as a single class, are entitled to elect the next higher whole number of directors. In addition, Delaware law requires that certain matters be approved by the holders of USA common stock voting as a separate class. Shares of USA Class B common stock are convertible into shares of USA common stock at the option of the holder thereof, at any time, on a share-for-share basis. Such conversion ratio will in all events be equitably preserved in the event of any recapitalization of USA by means of a stock dividend on, or a stock split or combination of, outstanding USA common stock or USA Class B common stock, or in the event of any merger, consolidation or other reorganization of USA with another corporation. Upon the conversion of USA Class B common stock into shares of USA common stock, those shares of USA Class B common stock will be retired and will not be subject to reissue. Shares of USA common stock are not convertible into shares of USA Class B common stock. In all other respects, the USA common stock and the USA Class B common stock are identical. The holders of USA common stock and the holders of USA Class B common stock are entitled to receive, share for share, such dividends as may be declared by our board of directors out of funds legally available therefor. In the event of a liquidation, dissolution, distribution of assets or winding-up of USA, the holders of USA common stock and the holders of USA Class B common stock are entitled to share ratably in all assets of USA available for distribution to our stockholders, after the rights of the holders of the USA preferred stock, have been satisfied. In connection with our acquisition of USA Network and Studios USA in 1998, we granted to Liberty preemptive rights to acquire shares of USA stock. These preemptive rights, which were amended in connection with the VUE transaction, generally provide that Liberty may elect to purchase a number of shares of USA stock so that the percentage equity interest Liberty owned of us 10 immediately after a transaction would be the same as immediately before such transaction, in each case, assuming the exchange of all shares of Home Shopping Network owned by a subsidiary of Liberty. The purchase price for shares of USA stock pursuant to a preemptive right election is the fair market value of the USA stock purchased. Our certificate of incorporation provides that there can be no stock dividends or stock splits or combinations of stock declared or made on USA common stock or USA Class B common stock unless the shares of USA common stock and USA Class B common stock then outstanding are treated equally and identically. In connection with the acquisition of a controlling interest in Expedia, Inc., USA issued an aggregate of approximately 13,125,000 shares of its preferred stock, par value $0.01 per share, "Series A Cumulative Convertible Preferred Stock," each having a $50.00 face value and a term of 20 years, which we refer to in this prospectus as USA preferred stock. Each share of USA preferred stock is convertible, at the option of the holder at any time, into that number of shares of USA common stock equal to the quotient obtained by dividing $50 by the conversion price per share of USA common stock (as defined in the certificate of designation for the USA preferred stock). In the event of a voluntary or involuntary liquidation, dissolution or winding up of USA, holders of USA preferred stock shall be entitled to receive, in preference to any holder of USA common shares, an amount per share equal to all accrued and unpaid dividends plus the greater of (a) face value, or (b) the liquidating distribution that would be received had such holder converted the USA preferred stock into USA common stock immediately prior to the liquidation, dissolution or winding up of USA. The arrangements described in this prospectus in the section "RISK FACTORS", and more fully described in the documents identified under the caption "WHERE YOU CAN FIND MORE INFORMATION", may have the effect of delaying, deferring or preventing a change in control of USA. The transfer agent for the shares of USA common stock and USA preferred stock is The Bank of New York. The shares of USA common stock being offered under this prospectus have been legally issued, are fully paid and are non-assessable. CERTAIN MATERIAL UNITED STATES FEDERAL TAX CONSEQUENCES GENERAL The following is a general discussion of certain material United States federal income and estate tax consequences of the ownership and disposition of USA common stock. As used herein, a "United States person" is - a citizen or resident of the United States; - a corporation created or organized in the United States or under the laws of the United States or of any state; - an estate the income of which is includible in gross income for United States federal income taxation regardless of its source; - a trust if a court in the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust; or - any person otherwise subject to United States federal income tax on a net income basis in respect of its worldwide taxable income. 11 A "U.S. Holder" is a beneficial owner of USA common stock who is a United States person. A "Non-U.S. Holder" is a beneficial owner that is not a U.S. Holder. If a partnership (including for this purpose any entity treated as a partnership for United States federal tax purposes) is a beneficial owner of USA common stock, the treatment of a partner in the partnership will generally depend upon the status of the partner and upon the activities of the partnership. Partnership and partners in such partnership should consult their tax advisors about the United States federal income tax consequences of owning and disposing of USA common stock. This discussion is based on current law, which is subject to change, possibly with retroactive effect, or different interpretations. This discussion is limited to holders who hold USA common stock as capital assets. Moreover, this discussion is for general information only and does not address all the tax consequences that may be relevant in light of your particular circumstances, nor does it discuss special tax provisions which may apply if you have relinquished United States citizenship or residence. EACH PROSPECTIVE PURCHASER IS ADVISED TO CONSULT A TAX ADVISOR WITH RESPECT TO CURRENT AND POSSIBLE FUTURE TAX CONSEQUENCES OF PURCHASING, OWNING AND DISPOSING OF OUR COMMON STOCK, AS WELL AS ANY TAX CONSEQUENCES THAT MAY ARISE UNDER STATE, LOCAL, FOREIGN OR OTHER TAX LAWS. TAXATION OF U.S. HOLDERS This section describes the tax consequences to a U.S. Holder. If you are not a U.S. Holder, this section does not apply to you. DISTRIBUTIONS. The amount of any distribution USA makes in respect of its common stock will be equal to the amount of cash and the fair market value, on the date of distribution, of any property distributed. In general, distributions on USA common stock will constitute dividend income, taxable at ordinary income rates, to the extent of USA's current or accumulated earnings and profits. Any excess will be treated as non-taxable return of capital to the extent of the holder's basis in the common stock, and thereafter as capital gain. SALES OR EXCHANGES. On the sale, exchange or other disposition of shares of USA common stock (other than a redemption of the common stock, discussed below), holders will generally recognize capital gain or loss equal to the difference between the amount of cash and the fair market value of any property received upon the sale, exchange or other disposition and the adjusted tax basis in the stock sold, exchanged or disposed of. This gain or loss will be long-term capital gain or loss if at the time of the sale, exchange or disposition the holder has held the stock sold, exchanged or disposed of for more than one year. The deductibility of capital losses is subject to limitations. DIVIDENDS TO CORPORATE SHAREHOLDERS. In general, a distribution on the USA common stock that is taxable as a dividend and that is made to a corporate shareholder will qualify for the 70% corporate dividends-received deduction under the Internal Revenue Code. However, a dividend that arises upon a redemption of common stock will generally constitute an "extraordinary dividend" under Section 1059 of the Internal Revenue Code. In addition, constructive dividends received on common stock within two years of the holder's acquisition of the stock may also constitute "extraordinary dividends." If the extraordinary dividend rules apply, the corporate shareholder may lose some or all of the benefits of the dividends-received deduction. Furthermore, there are many exceptions and restrictions relating to the availability of the dividends-received deduction. Consequently, corporate shareholders should consult their own tax advisors regarding the extent, if any, that the dividends-received deduction is available to them and the extent to which the extraordinary dividend rules may apply. 12 REDEMPTION OF USA COMMON STOCK. A redemption of USA common stock generally would be a taxable event and would be treated as if the holder sold the common stock if the redemption: - results in a "complete termination" of the holder's interest in USA stock; - is "substantially disproportionate" (i.e., after the redemption, the percentage of all our outstanding voting stock that is owned by the holder is less than 80% of the percentage of all our outstanding voting stock (and the percentage of all our outstanding common stock that is owned by the holder is less than 80% of the percentage of all our outstanding common stock) that was owned by the holder immediately before the redemption); or - is "not essentially equivalent to a dividend" (i.e., the redemption must meaningfully reduce the holder's proportionate interest in USA based on the holder's particular circumstance; the Internal Revenue Service (the "IRS") has indicated that this test is satisfied by even a small reduction in the percentage interest of a shareholder whose relative stock interest in a publicly held corporation is minimal and who exercises no control over corporate affairs). In determining whether any of these tests has been met, holders must take into account the shares of stock actually owned and the shares of stock constructively owned by reason of certain constructive ownership rules set forth in Section 318 of the Internal Revenue Code. If stock is redeemed in a redemption that meets one of the tests described above, the holder generally would recognize taxable gain or loss equal to the difference between the amount of cash and the fair market value of property received and the holder's tax basis in the stock redeemed. This gain or loss would be long-term capital gain or capital loss if the stock were held for more than one year. If a redemption does not meet any of the tests described above, the entire amount of the cash and the fair market value of property received generally would be taxed as a dividend as explained above under "Distributions." If a redemption is treated as a distribution that is taxable as a dividend, the holder's basis in the redeemed stock would generally be transferred to the holder's remaining shares of stock, if any. INFORMATION REPORTING AND BACKUP WITHHOLDING. Information reporting will generally apply to dividends received on USA common stock and to the proceeds received on the sale or disposition of such stock by a U.S. Holder who is not an exempt recipient. Generally, individuals are not exempt recipients, whereas corporations are exempt recipients. Backup withholding will apply only if the U.S. Holder is not an exempt recipient and: - fails to furnish its Taxpayer Identification Number ("TIN") which, in the case of an individual, is his or her Social Security Number; - furnishes an incorrect TIN; - in the case of dividends, is notified by the IRS that it has failed to properly report payments of interest or dividends; or - fails to certify, under penalty of perjury, that it has furnished a correct TIN, has not been notified by the IRS that it is subject to backup withholding (or has since been notified by the IRS that it is no longer subject to backup withholding) and is a U.S. person (including a U.S. resident alien). U.S. Holders should consult their tax advisors regarding their qualification for exemption from backup withholding and the procedure for demonstrating such an exemption if applicable. The amount of any backup withholding from a payment to a U.S. Holder is not an additional tax and is allowable as a credit against the U.S. Holder's United States federal income tax liability, if any, or may be claimed as a refund, provided that the required information is furnished to the IRS. 13 TAXATION OF NON-U.S. HOLDERS This section describes the tax consequences to a Non-U.S. Holder. If you are a U.S. Holder, see the above discussion under "--Taxation of U.S. Holders." DIVIDENDS. If dividends are paid, Non-U.S. Holders will be subject to withholding of United States federal income tax at a 30% rate or a lower rate as may be specified by an applicable income tax treaty. To claim the benefit of a lower rate under an income tax treaty, Non-U.S. Holders must properly file with the payor an IRS Form W-8BEN, or successor form, claiming an exemption from or reduction in withholding under the applicable tax treaty. In addition, where dividends are paid or deemed paid to a Non-U.S. Holder that is a partnership or other pass through entity, persons holding an interest in the entity may need to provide certification claiming an exemption or reduction in withholding under the applicable treaty. If actual or deemed dividends are considered effectively connected with the conduct of a trade or business within the United States and, where a tax treaty applies, are attributable to United States permanent establishment, those dividends will not be subject to withholding tax, but instead will be subject to United States federal income tax on a net basis at applicable graduated individual or corporate rates, provided an IRS Form W-8ECI, or successor form, is filed with the payor. In the case of a foreign corporation, any effectively connected dividends may, under certain circumstances, be subject to an additional "branch profits tax" at a rate of 30% or a lower rate as may be specified by an applicable income tax treaty. Non-U.S. Holders must comply with the certification procedures described above, or, in the case of payments made outside the United States with respect to an offshore account, certain documentary evidence procedures, directly or under certain circumstances through an intermediary, to obtain the benefits of a reduced rate under an income tax treaty with respect to dividends paid or deemed paid with respect to USA common stock. In addition, if a Non-U.S. Holder is required to provide an IRS Form W-8ECI or successor form, as discussed above, the Non-U.S. Holder must also provide its tax identification number. Non-U.S. Holders that are eligible for a reduced rate of United States withholding tax pursuant to an income tax treaty may obtain a refund of any excess amounts withheld by filing an appropriate claim for refund with the IRS. GAIN ON DISPOSITION OF USA COMMON STOCK. Non-U.S. Holders generally will not be subject to United States federal income tax on any gain realized on the sale or other disposition of USA common stock unless: - the gain is considered effectively connected with the conduct of a trade or business within the United States and, where a tax treaty applies, is attributable to a United States permanent establishment (and, in which case, if the holder is a foreign corporation, may be subject to an additional "branch profits tax" equal to 30% or a lower rate as may be specified by an applicable income tax treaty); - the holder is an individual who holds the USA common stock as a capital asset and is present in the United States for 183 or more days in the taxable year of the sale or other disposition and other conditions are met; or - we are or have been a "United States real property holding corporation," or a USRPHC, for United States federal income tax purposes. We believe that we are not currently, and are not likely to become, a USRPHC. If we were to become a USRPHC, then gain on the sale or other disposition of USA common stock generally would not be subject to United States federal income tax provided: - USA common stock were "regularly traded" on an established securities market; and 14 - the holder did not actually or constructively own more than 5% of the USA common stock during the shorter of the five-year period preceding the disposition or the holder's holding period. FEDERAL ESTATE TAX. In the case of an individual, USA common stock held at the time of death will be included in the individual's gross estate for United States federal estate tax purposes, and may be subject to United States federal estate tax, unless an applicable estate tax treaty provides otherwise. INFORMATION REPORTING AND BACKUP WITHHOLDING. We must report annually to the IRS and to each holder the amount of dividends paid or deemed paid and the tax withheld with respect to those dividends, regardless of whether withholding was required. Copies of the information returns reporting those dividends and withholding may also be made available to the tax authorities in the country in which a Non-U.S. Holder resides under the provisions of an applicable income tax treaty or other applicable agreements. Backup withholding is generally imposed on certain payments to persons that fail to furnish the necessary identifying information to the payor. Generally Non-U.S. Holders will be subject to back-up withholding tax with respect to dividends paid on USA common stock unless they certify their status as Non-U.S. Holders. The payment of proceeds of a sale of USA common stock effected by or through a United States office of a broker will be subject to both backup withholding and information reporting unless the holder provides the payor with the holder's name and address and certifies its Non-U.S. Holder status or otherwise establishes an exemption. In general, backup withholding and information reporting will not apply to the payment of the proceeds of a sale of USA common stock by or through a foreign office of a broker. If, however, such broker is, for United States federal income tax purposes, a United States person, a controlled foreign corporation, a foreign person that derives 50% or more of its gross income for certain periods from the conduct of a trade or business in the United States, or, a foreign partnership that at any time during its tax year either is engaged in the conduct of a trade or business in the United States or has as partners one or more United States persons that, in the aggregate, hold more than 50% of the income or capital interest in the partnership, such payments will be subject to information reporting, but not backup withholding, unless such broker has documentary evidence in its records that the holder is a Non-U.S. Holder and certain other conditions are met or the holder otherwise establishes an exemption. Any amounts withheld under the backup withholding rules generally will be allowed as a refund or a credit against the holder's United States federal income tax liability provided the required information is furnished in a timely manner to the IRS. LEGAL MATTERS The validity of the USA common stock offered by this prospectus is being passed upon for us by Covington & Burling, New York, New York. EXPERTS Ernst & Young LLP, independent auditors, have audited the consolidated financial statements and financial statement schedule of USA as set forth in their report, included in USA Networks, Inc.'s (renamed USA Interactive) Annual Report on Form 10-K for the year ended December 31, 2001, which is incorporated by reference in this prospectus. USA's consolidated financial statements and financial statement schedule are incorporated by reference in reliance on Ernst & Young LLP's report, given on their authority as experts in accounting and auditing. 15 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The following table sets forth the various costs and expenses payable by the Registrant in connection with the sale of USA common stock being registered, other than broker-dealer discounts and commissions which are payable by the Selling Stockholders. All amounts are estimates except the SEC registration fee. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS The Registrant's Restated Certificate of Incorporation limits, to the maximum extent permitted by Delaware law, the personal liability of directors for monetary damages for breach of their fiduciary duties as a director. The Registrant's Amended and Restated By-Laws provide that the directors and officers (and legal representatives of such directors and officers) will be indemnified to the fullest extent authorized by the Delaware General Corporation Law with respect to third-party actions, suits, investigations or proceedings provided that any such person has met the applicable standard of conduct set forth in the Delaware General Corporation Law described below. The Registrant's Amended and Restated By-Laws further provide that directors and officers (and legal representatives of such directors and officers) will be indemnified with respect to actions or suits initiated by such person only if such action was first approved by the board of directors. The Registrant's Amended and Restated By-Laws allow the Registrant to pay all expenses incurred by a director or officer (or legal representatives of such directors or officers) in defending any proceeding in which the scope of the indemnification provisions as such expenses are incurred in advance of its final disposition, upon an undertaking by such party to repay such expenses, if it is ultimately determined that such party was not entitled to indemnity by the Registrant. From time to time, officers and directors may be provided with indemnification agreements that are consistent with the foregoing provisions. The Registrant believes that these agreements and arrangements are necessary to attract and retain qualified persons as directors and officers. Section 145 of the Delaware General Corporation Law provides that a corporation may indemnify a director, officer, employee or agent who was or is a party, or is threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he was a director, officer, employee or agent of the corporation or was serving at the request of the corporation against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.
ITEM AMOUNT - ---- ---------- SEC Registration Fee........................................ $ 26,588 Printing Fees and Expenses.................................. $ 10,000 Legal Fees and Expenses..................................... $ 20,000 Accounting Fees and Expenses................................ $ 10,000 Miscellaneous............................................... $ 5,000 Total..................................................... $ 71,588 ITEM 16. EXHIBITS The following exhibits are filed as part of this registration statement: ITEM 17. UNDERTAKINGS The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the Securities being registered which remain unsold at the termination of the offering. (4) That, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
EXHIBIT NO. DESCRIPTION - ----------- ----------- 4.1 Registration Rights Agreement, dated as of May 30, 2002, by and among the Registrant and the Selling Stockholders (as defined in the accompanying prospectus). 5.1 Opinion of Covington & Burling, regarding the legality of the USA common stock being registered. 23.1 Consent of Ernst & Young LLP. 23.2 Consent of Covington & Burling (included in Exhibit 5.1). 24 Power of Attorney (set forth on the signature page of this registration statement). SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on June 13, 2002. USA INTERACTIVE By: /s/ BARRY DILLER ----------------------------------------- Barry Diller CHAIRMAN AND CHIEF EXECUTIVE OFFICER
POWER OF ATTORNEY We, the undersigned officers and directors of USA Interactive, hereby severally and individually constitute and appoint Dara Khosrowshahi, Julius Genachowski and William Severance, and each of them severally, the true and lawful attorneys and agents of each of us to execute in the name, place and stead of each of us (individually and in any capacity stated below) any and all amendments (including post-effective amendments) to this registration statement on Form S-3 and any subsequent registration statement filed by the Registrant pursuant to Rule 462(b) of the Securities Act of 1933 which relates to this registration statement, and all instruments necessary or advisable in connection therewith and to file the same with the Securities and Exchange Commission, each of said attorneys and agents to have the power to act with or without the others and to have full power and authority to do and perform in the name and on behalf of each of the undersigned every act whatsoever necessary or advisable to be done in the premises as fully and to all intents and purposes as any of the undersigned might or could do in person, and we hereby ratify and confirm our signatures as they may be signed by our said attorneys and agents or each of them to any and all such amendments and instruments. * * * * * Pursuant to the requirements of the Securities Act, this registration statement has been signed below by the following persons in the capacities indicated as of June 13, 2002.
SIGNATURE TITLE --------- ----- /s/ BARRY DILLER ------------------------------------------- Chairman of the Board, Chief Executive Officer Barry Diller and Director Barry Diller /s/ VICTOR A. KAUFMAN ------------------------------------------- Vice Chairman and Director Victor A. Kaufman /s/ WILLIAM J. SEVERANCE ------------------------------------------- Vice President and Controller (Chief William J. Severance Accounting Officer) /s/ DARA KHOSROWSHAHI ------------------------------------------- Executive Vice President and Chief Financial Dara Khosrowshahi Officer
SIGNATURE TITLE --------- ----- /s/ ROBERT R. BENNETT ------------------------------------------- Director Robert R. Bennett /s/ EDGAR BRONFMAN, JR. ------------------------------------------- Director Edgar Bronfman, Jr. /s/ ANNE M. BUSQUET ------------------------------------------- Director Anne M. Busquet /s/ PHILIPPE GERMOND ------------------------------------------- Director Philippe Germond /s/ DONALD R. KEOUGH ------------------------------------------- Director Donald R. Keough /s/ MARIE-JOSEE KRAVIS ------------------------------------------- Director Marie-Josee Kravis /s/ JOHN C. MALONE ------------------------------------------- Director John C. Malone /s/ JEAN-MARIE MESSIER ------------------------------------------- Director Jean-Marie Messier /s/ GEN. H. NORMAN SCHWARZKOPF ------------------------------------------- Director Gen. H. Norman Schwarzkopf /s/ DIANE VON FURSTENBERG ------------------------------------------- Director Diane Von Furstenberg INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION - ----------- ----------- 4.1 Registration Rights Agreement, dated as of May 30, 2002, by and among the Registrant and the Selling Stockholders (as defined in the accompanying prospectus). 5.1 Opinion of Covington & Burling, regarding the legality of the USA common stock being registered. 23.1 Consent of Ernst & Young LLP. 23.2 Consent of Covington & Burling (included in Exhibit 5.1). 24 Power of Attorney (set forth on the signature page of this registration statement).
EXHIBIT 4.1 REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated May 30, 2002, among USA Interactive, a Delaware corporation ("USA"), and each of the holders of the common stock of Interval Acquisition Corp., a Delaware corporation ("Interval"), set forth on the signature pages hereto. ----------------------------------------------------------- Each of the Holders (as defined below) will receive certain shares of USA's Common Stock, $0.01 par value per share ("USA Common Stock"), in respect of the common stock of Interval, par value $0.01 per share ("Interval Common Stock"), now beneficially owned by such Holder, upon the consummation of the merger of a wholly owned subsidiary of USA with Interval (the "Merger") pursuant to an Agreement and Plan of Merger, dated as of May 30, 2002 (as amended, supplemented and in effect from time to time, the "Merger Agreement"). In consideration of the representations, warranties, covenants and conditions herein and in the Merger Agreement, the parties hereto hereby agree as follows: SECTION 1 REGISTRATION RIGHTS 1.1 CERTAIN DEFINITIONS. As used in this Agreement: (a) The term "beneficially owned" refers to the meaning of such terms as provided in Rule 13d-3 promulgated under the Exchange Act. (b) The term "Charity" means an organization exempt from Federal taxation under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended. (c) The term "Exchange Act" means the Securities Exchange Act of 1934, as amended, or any similar federal statute and the rules and regulations of the SEC thereunder, all as the same shall be in effect from time to time. (d) The term "person" shall mean any person, individual, corporation, partnership, limited liability company, trust or other non-governmental entity or any governmental agency, court, authority or other body (whether foreign, federal, state, local or otherwise). (e) The term "Holder" means each holder of Interval Common Stock (i) set forth on the signature pages hereto who has executed and delivered to USA a counterpart hereof or (ii) who has executed and delivered to USA a counterpart signature page hereto pursuant to Section 3.9, PROVIDED, HOWEVER, that any such person shall cease to be a Holder at such time as the registration rights to which such person is entitled hereunder terminate pursuant to Section 1.9. (f) "Holder Group" shall mean (a) such Holder, (b) the spouse, parents, siblings and lineal descendants of such Holder, (c) a trust for the benefit of any of the foregoing, (d) any individual, corporation, partnership, trust, other entity or group (which term shall include a "group" as such term is defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) (collectively a "Person"), directly or indirectly controlling, controlled by or under common control with such Holder, members of such Holder's immediate family and lineal descendants or trusts for the benefit of any of the foregoing, and (e) upon the death of the Holder, the Holder's estate, executors, administrators and personal representatives, and heirs, legatees and distributees; PROVIDED, HOWEVER, that a Holder's parent or parents shall only be considered to be a member of such Holder's Holder Group if the Holder Transfers any USA Common Stock to such parent after the date hereof, and then, the parent shall only be considered a member with respect to such Transferred shares. For purposes of this Agreement, the terms "control", "controlling", "controlled by" and "under common control with", as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through ownership of voting securities, by contract or otherwise. (g) The terms "register," "registered" and "registration" refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering by the SEC of the effectiveness of such registration statement. (h) The term "Registrable Securities" means (i) USA Common Stock to be issued to the Holders pursuant to the Merger and (ii) any USA Common Stock issued to the Holders by USA upon any stock split, stock dividend, recapitalization, or similar event with respect to such USA Common Stock issued in the Merger. (i) The term "Securities Act" means the Securities Act of 1933, as amended, or any similar federal statute and the rules and regulations of the SEC thereunder, all as the same shall be in effect at the time. (j) The term "SEC" means the United States Securities and Exchange Commission or any other federal agency at the time administering the Securities Act. (k) The term "Transfer" means offer, pledge, sell, contract to sell, sell any option or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly or enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of, whether such transaction is settled by delivery of Buyer Common Stock, other securities, cash or otherwise. 1.2 SHELF REGISTRATION. USA shall use commercially reasonable efforts to prepare and file a registration statement on Form S-3 (the "Registration Statement") within 14 days after the date hereof and shall use commercially reasonable efforts to cause the Registration Statement to be declared effective by the SEC as soon as the conditions precedent set forth in Article 3 of the Merger Agreement have been satisfied or waived, other than the condition in Section 3.2(f) (including, without limitation, the execution of an undertaking to file post-effective amendments, appropriate qualification under applicable blue sky or other state securities laws and appropriate compliance with applicable regulations issued under the Securities Act and any other governmental requirements or regulations) covering the resale of the Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415 of the Securities Act; PROVIDED, HOWEVER, that USA shall not be obligated to take any action to effect any such registration, qualification or compliance pursuant to this Section in any particular jurisdiction in which USA would be required to execute a general consent to service of process in effecting such registration, qualification or compliance unless USA is already subject to service in such jurisdiction and except as may be required by the Securities Act; PROVIDED FURTHER 2 that USA shall not be required to file the Registration Statement at such time as USA could have suspended the effectiveness of the Registration Statement pursuant to Section 1.4. 1.3 OBLIGATIONS OF USA. In connection with any registration of Registrable Securities pursuant to this Section 1, USA shall: (a) Use its commercially reasonable efforts to cause the Registration Statement to be declared effective by the SEC and to remain effective until the earlier to occur of (x) the first anniversary of the Effective Time and (y) the sale of all of such shares of Registrable Securities so registered. (b) Prepare and file with the SEC such amendments and supplements to the Registration Statement and the prospectus (the "Prospectus") used in connection therewith as may be necessary to make and to keep the Registration Statement effective and to comply with the provisions of the Securities Act with respect to the sale or other disposition of all securities proposed to be registered in such Registration Statement. (c) Furnish to the participating Holders such number of copies of any Prospectus (including any preliminary Prospectus and any amended or supplemented Prospectus), in conformity with the requirements of the Securities Act, as the Holders may reasonably request in order to effect the offering and sale of the shares of Registrable Securities to be offered and sold, but only while USA shall be required under the provisions hereof to cause the Registration Statement to remain effective. (d) Use its commercially reasonable efforts to register or qualify the shares of Registrable Securities covered by the Registration Statement under the securities or blue sky laws of such states as the participating Holders shall reasonably request and maintain any such registration or qualification current until the earlier to occur of (x) the first anniversary of the Effective Time and (y) the date on which the Holders no longer holds any shares of Registrable Securities so registered; PROVIDED, HOWEVER, that USA shall not be required to take any action that would subject it to the general jurisdiction of the courts of any jurisdiction in which it is not so subject or to qualify as a foreign corporation in any jurisdiction where USA is not so qualified. 1.4 RIGHTS OF USA. Notwithstanding anything to the contrary set forth in this Agreement, if, at any time during which a prospectus is required to be delivered in connection with the sale of Registrable Securities, USA determines in good faith that a development has occurred or a condition exists as a result of which the Registration Statement or the related prospectus may contain or incorporate by reference a material misstatement or omission, the correction of which might (a) interfere with or affect the negotiation or completion of any transaction that is being contemplated by USA (whether or not a final decision has been made to undertake such transaction), or (b) involve initial or continuing disclosure obligations that USA determines in good faith may not be in the best interest of USA or its stockholders, and USA may suspend the effectiveness of the Registration Statement for a reasonable period of time not to exceed 20 consecutive calendar days (a "Blackout Period"); PROVIDED that the aggregate number of days in all Blackout Periods occurring in any period of 12 consecutive months shall not exceed 60. USA shall provide written notice to the Holders upon the commencement of a 3 Blackout Period, and upon receipt of such notification, the Holders will immediately suspend all offers and Transfers of any Registrable Securities pursuant to the Registration Statement until such time as USA notifies the Holders that it has determined that such Blackout Period is ended, which notification shall occur promptly after USA has determined that such Blackout Period has ended. After 70% or more of the Registrable Securities have been Transferred and USA has notified the Holders of such fact, if a Holder desires to Transfer any Registrable Securities it shall provide two trading days prior written notice of any such Transfer to USA, which notice shall specify the date on which the Holder desires to Transfer such Registrable Securities and the number of Registrable Securities proposed to be Transferred and shall not Transfer any Registrable Securities during such period so that USA shall be able to determine whether it is necessary to trigger a Blackout Period under this Section prior to such Transfer occurring. 1.5 TRADING RESTRICTIONS. Except for a Transfer in compliance with Section 8.15 of the Merger Agreement, no Holder to whom 50,000 or more Registrable Securities were issuable on the Closing Date under the Merger Agreement (a "Significant Holder") may Transfer any Registrable Securities prior to the time at which 70% or more of the Registrable Securities have been Transferred. Once 70% or more of the Registrable Securities have been Transferred, no Significant Holder may Transfer on any day a number of Registrable Shares greater than or equal to 10% of the Registrable Securities issuable to such Holder on the Closing Date under the Merger Agreement. The restrictions set forth in this Section 1.5 will terminate on the first anniversary of the Effective Time. 1.6 EXPENSES. (a) All Registration Expenses incurred in connection with any registration pursuant to this Section 1.6(a) shall be borne by USA. "Registration Expenses" shall mean the fees and expenses of USA's counsel and its accountants and all other costs and expenses of USA incident to the preparation, printing and filing under the Securities Act of the Registration Statement and all amendments and supplements thereto and the cost of furnishing copies of each preliminary prospectus, each final prospectus and each amendment or supplement thereto to dealers and other purchasers of the securities so registered, the costs and expenses incurred in connection with the qualification of such securities so registered under the blue sky laws of various jurisdictions, the fees and expenses of USA's transfer agent and all other costs and expenses of complying with the provisions of this Section 1 with respect to such registration. (b) Excluding the Registration Expenses, the participating Holders shall pay all other expenses incurred on their behalf with respect to any registration pursuant to this Section 1, including fees and expenses of any counsel for the Holders and any brokers, underwriters or placement agents. 1.7 INDEMNIFICATION. (a) To the extent permitted by law, USA will indemnify each Holder, each of their respective officers, directors, partners, members or shareholders, and each person controlling such person, with respect to which registration, qualification or compliance has been effected pursuant to this Section 1, and each underwriter, if any, and each person who controls any underwriter, against all claims, losses, damages and liabilities (or actions in respect thereof) 4 arising out of or based on (i) any untrue statement (or alleged untrue statement) of a material fact contained in any prospectus or any amendment or supplement thereto (including any related registration statement, notification or the like) incident to any such registration, qualification or compliance, or (ii) any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (iii) any violation by USA of any rule or regulation promulgated under the Securities Act or any state securities laws or rule or regulation promulgated thereunder applicable to USA and relating to action or inaction required of USA in connection with any such registration, qualification or compliance, and will reimburse each such person, each of its officers and directors, and each person controlling such person, each such underwriter and each person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action; PROVIDED, HOWEVER, that USA will not be liable in any such case to the extent that any such claim, loss, damage or liability arises out of or is based on any untrue statement or omission based upon written information furnished to USA by an instrument duly executed by such person or underwriter and stated to be specifically for use therein; and PROVIDED, FURTHER, that USA will not be liable to any such person or entity with respect to any such untrue statement or omission or alleged untrue statement or omission made in any preliminary prospectus that is corrected in the final prospectus filed with the Commission pursuant to Rule 424(b) promulgated under the Securities Act (or any amendment or supplement to such prospectus) if the person asserting any such loss, claim, damage or liability purchased securities but was not sent or given a copy of the prospectus (as amended or supplemented) at or prior to the written confirmation of the sale of such securities to such person in any case where such delivery of the prospectus (as amended or supplemented) is required by the Securities Act, unless such failure to deliver the prospectus (as amended or supplemented) was a result of USA's failure to provide such prospectus (as amended or supplemented). (b) To the extent permitted by law, each Holder will, if Registrable Securities held by or issuable to such person are included in the securities as to which such registration, qualification or compliance is being effected, indemnify USA, each of its directors and officers, who sign the Registration Statement, each person who controls USA within the meaning of the Securities Act and each other such Holder, each of its officers, directors, partners, members or shareholders and each person controlling such Holder, against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on (i) any untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, prospectus or amendment or supplement to any such prospectus, or (ii) any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse USA and each of its directors and officers and such Holders and their respective directors, officers, partners, members or shareholders for any legal and any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, or amendment or supplement to any such prospectus in reliance upon and in conformity with written information furnished to USA by an instrument duly executed by such Holder and stated to be specifically for use therein. In no event shall any indemnity obligation of a Holder under this Section 1.7(b) exceed the net proceeds from such Holder's sale of the Registrable Securities giving rise to such obligation. 5 (c) Each party entitled to indemnification under this Section 1.7 (the "Indemnified Party") shall give notice to the party required to provide indemnification (the "Indemnifying Party") promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom; PROVIDED, HOWEVER, that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at such party's expense, and PROVIDED, FURTHER, that the failure of any Indemnified Party to give notice as provided herein shall not affect the indemnification provided herein, except in the event and to the extent that the Indemnifying Party has been actually prejudiced as a result of such failure. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability with respect to such claim or litigation. If any such Indemnified Party shall have reasonably concluded that there may be one or more legal defenses available to such Indemnified Party which are different from or additional to those available to the Indemnifying Party, or that such claim or litigation involves or could have an effect upon matters beyond the scope of the indemnity agreement provided in this Section 1.7, the Indemnifying Party shall not have the right to assume the defense of such action on behalf of such Indemnified Party and such Indemnifying Party shall reimburse such Indemnified Party and any person controlling such Indemnified Party for that portion of the fees and expenses of any counsel (such counsel to be approved by the Indemnifying Party (whose approval shall not be unreasonably withheld)) retained by the Indemnified Party which are reasonably related to the matters covered by the indemnity agreement provided in this Section 1.7. 1.8 INFORMATION BY HOLDER. The Holders or Transferees (as defined below) whose securities are included in the registration effected pursuant to this Section 1 shall furnish in writing to USA such information regarding such persons and the distribution proposed by such persons as USA may request in writing and as shall be required in connection with any registration, qualification or compliance referred to in this Section 1. USA's obligations to any Holder or Transferee under this Section 1 are conditioned upon compliance by such person with the provisions of this Section 1.8. USA acknowledges that notwithstanding the representations made by each of the Holders in questionnaires provided by such Holders to USA on or prior to the date hereof with respect to their planned distribution of Registrable Securities, such Holders may Transfer Registrable Securities in any manner that complies with the provisions of the Merger Agreement, this Agreement and applicable law. 1.9 TERMINATION OF REGISTRATION RIGHTS. The registration rights granted pursuant to this Section 1 shall terminate as to any Holder upon the earlier to occur of (x) the first anniversary of the Effective Time and (y) the sale of all of Registrable Securities of such Holder so registered; PROVIDED, HOWEVER, that the provisions of Section 1.7 shall survive such termination with respect to claims and liabilities arising out of actions, statements, or omissions occurring prior to such termination. 6 SECTION 2 CERTAIN COVENANTS 2.1 TRANSFERS OF REGISTRABLE SECURITIES. (a) The Holder shall not Transfer any of the Registrable Securities pursuant to the Registration Statement except in Transfers consisting of trades executed at prevailing market prices (excluding any discount or commission received by the brokers through which such trade is effected) obtainable at the time of such Transfer (which shall include any "block trade" executed in compliance with Section 8.15 of the Merger Agreement) through brokers, acting as principal or agent, in transactions on the Nasdaq National Market or such other national securities exchange on which the Registrable Securities are then listed ("Trades at Market"). The Holders acknowledge and agree that the plan of distribution set forth in the Registration Statement shall only provide for Trades at Market and shall not provide for any other plan of distribution. (b) If, prior to the termination of the registration rights pursuant to Section 1.9, any Holder Transfers its Registrable Securities (other than pursuant to the Registration Statement) to another person, including, without limitation, any person in such Holder's Group (each a "Transferee"), such Holder shall promptly provide notice to USA of such transfer, including the number and type of Registrable Securities and the name, address, telephone number and facsimile number of the Transferee. (c) For any Transfer of any of the Registrable Securities by any Holder in a transaction that is not exempt under the Securities Act, such Holder, in addition to complying with any other federal securities laws, shall deliver a copy of the final Prospectus (or amendment of or supplement to such Prospectus) to the purchaser of any of the Registrable Securities on or before the settlement date for the purchase of such Registrable Securities. (d) Promptly after each Holder Transfers all of its Registrable Securities, each such Holder shall provide written notice to USA that it no longer holds any Registrable Securities. SECTION 3 MISCELLANEOUS 3.1 GOVERNING LAW. This Agreement shall be governed in all respects by the laws of the State of New York as applied to contracts entered into solely between residents of, and to be performed entirely within, such state, without regard to conflicts of laws principles. 3.2 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. This Agreement may not be assigned by a party hereto without the prior written consent of the other parties hereto, except in connection with a Transfer by a Holder to another member of such Holder's Holder Group or to a Charity, which member or Charity has agreed in writing with the parties hereto to be bound by and to comply with all provisions of this Agreement; PROVIDED, HOWEVER, that no such assignment shall be effected or effective until such proposed assignee has delivered to USA written acknowledgment and agreement in form and substance reasonably satisfactory to USA that such proposed assignee agrees to be bound with respect to the 7 Registrable Securities so Transferred to all the provisions of this Agreement (including, without limitation, Section 2.1 hereof) and that such proposed assignee is bound hereby and a party hereto. 3.3 NO THIRD PARTY BENEFICIARIES. This Agreement is not intended and shall not be construed to create any rights or remedies in any parties other than the Holders and USA and no other person shall assert any rights as third party beneficiary hereunder. 3.4 ENTIRE AGREEMENT; AMENDMENT. This Agreement contains the entire understanding and agreement between the parties with regard to the subject matter hereof and thereof and supersedes all prior agreements and understandings among the parties relating to the subject matter hereof. Neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge or termination is sought. 3.5 NOTICES AND DATES. All notices or other communications required or permitted under this Agreement shall be made in the manner provided in Section 13.1 of the Merger Agreement. In the event that any date provided for in this Agreement falls on a Saturday, Sunday or legal holiday, such date shall be deemed extended to the next business day. 3.6 COUNTERPARTS. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become a binding agreement when one or more counterparts have been signed by each party and delivered to the other parties. 3.7 SEVERABILITY. If any provision of this Agreement or portion thereof is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. 3.8 EFFECTIVENESS. This Agreement shall terminate and be of no further force and effect if the Merger Agreement is terminated prior to the Effective Time in accordance with its terms. 3.9 JOINDER. Upon executing a counterpart signature page hereto on or prior to the Effective Time, any holder of Interval common stock whose name is not set forth on the signature pages hereto on the date hereof shall become a party hereto as such and as a Holder hereunder, as if such stockholder had executed this Agreement on the date hereof. 8 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed and delivered by their respective officers or partners hereunto duly authorized as of the date first above written. USA INTERACTIVE By: /s/ JULIUS GENACHOWSKI -------------------------------------- Name: JULIUS GENACHOWSKI Title: GENERAL COUNSEL & EXECUTIVE VICE PRESIDENT Signature Page to Registration Rights Agreement /s/ CRAIG M. NASH ------------------------- CRAIG M. NASH Signature Page to Registration Rights Agreement
/s/ JEANETTE E. MARBERT ------------------------- JEANETTE E. MARBERT Signature Page to Registration Rights Agreement
/s/ WILLIAM CARL DREW ------------------------- WILLIAM CARL DREW Signature Page to Registration Rights Agreement
/s/ DAVID C. GILBERT ------------------------- DAVID C. GILBERT Signature Page to Registration Rights Agreement
/s/ PAUL W. RISHELL ------------------------- PAUL W. RISHELL Signature Page to Registration Rights Agreement
CDMM INVESTMENTS, L.P. By: CDMM Investments, Inc., as its general partner By: /s/ CRAIG M. NASH ------------------------- Name: CRAIG M. NASH Title: PRESIDENT Signature Page to Registration Rights Agreement
STARWOOD VACATION EXCHANGE COMPANY FORMERLY KNOWN AS WESTIN VACATION EXCHANGE COMPANY By: /s/ RAYMOND L. GELLEIN, JR. ------------------------------ Name: RAYMOND L. GELLEIN, JR. Title: CHAIRMAN Signature Page to Registration Rights Agreement
STUART L. BELL AND SUSAN S. BELL 1999 CHILDREN'S TRUST By: /s/ JOHN D. GALARUYK ------------------------- Name: JOHN D. GALARUYK Title: TRUSTEE Signature Page to Registration Rights Agreement
/s/ ROBERT MILLER ------------------------- ROBERT MILLER 716 LAUREL LANE LAKELAND, FLORIDA 33813 TELEPHONE: 863.646.1291 FAX: 863.646.3823 Signature Page to Registration Rights Agreement
MARRIOTT OWNERSHIP RESORTS, INC. By: /s/ ROBERT MILLER -------------------------- Name: ROBERT MILLER Title: VICE PRESIDENT ADDRESS: 6649 WESTWOOD BOULEVARD, SUITE 500 ORLANDO, FLORIDA 32821 FAX: 407.206.6034 Signature Page to Registration Rights Agreement
HYATT VACATION OWNERSHIP, INC. By: /s/ KIRK A. ROSE -------------------------- Name: KIRK A. ROSE Title: VICE PRESIDENT Signature Page to Registration Rights Agreement
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY By: /s/ JEFFREY J. LUEKEN ---------------------------- Name: JEFFREY J. LUEKEN Title: ITS AUTHORIZED REPRESENTATIVE Signature Page to Registration Rights Agreement
/s/ STUART BELL ------------------------- STUART BELL Signature Page to Registration Rights Agreement
STUART L. BELL DECLARATION OF TRUST DATED 5/20/99 By: /s/ STUART BELL ------------------------- Name: STUART BELL Title: TRUSTEE Signature Page to Registration Rights Agreement
CARLSON COMPANIES, INC. By: /s/ RALPH N. BEHA ------------------------------ Name: RALPH N. BEHA Title: VICE PRESIDENT & CORPORATE SECRETARY Signature Page to Registration Rights Agreement
/s/ LAURENCE H. BLOCH ------------------------- LAURENCE H. BLOCH Signature Page to Registration Rights Agreement
/s/ HEATHER A. STEANS ------------------------- HEATHER A. STEANS Signature Page to Registration Rights Agreement
RICHARD D. MICHAELS REVOCABLE TRUST By: /s/ SUSAN MICHAELS ------------------------- Name: Susan Michaels Title: Trustee Signature Page to Registration Rights Agreement
/s/ THOMAS B. HUNTER III ------------------------- THOMAS B. HUNTER III Signature Page to Registration Rights Agreement
/s/ ADELINE S. MORRISON ------------------------- ADELINE S. MORRISON Signature Page to Registration Rights Agreement
/s/ HARRISON I. STEANS ------------------------- HARRISON I. STEANS Signature Page to Registration Rights Agreement
/s/ JENNIFER W. STEANS ------------------------- JENNIFER W. STEANS Signature Page to Registration Rights Agreement
/s/ ROBIN M. STEANS ------------------------- ROBIN M. STEANS Signature Page to Registration Rights Agreement
FIRST UNION MERCHANT BANKING 1998, LLC By: /s/ TRACEY M. CHAFFIN --------------------------- Name: TRACEY M. CHAFFIN Title: CHIEF FINANCIAL OFFICER Signature Page to Registration Rights Agreement
BANCBOSTON INVESTMENTS, INC. By: /s/ JOHN CULLINANE ------------------------- Name: JOHN CULLINANE Title: PRESIDENT Signature Page to Registration Rights Agreement
By: WILLIS STEIN & PARTNERS, L.P. By: WILLIS STEIN & PARTNERS, L.L.C., its General Partner By: /s/ DANIEL H. BLUMENTHAL ----------------------------- Name: DANIEL H. BLUMENTHAL Title: MANAGING DIRECTOR Signature Page to Registration Rights Agreement
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be executed and delivered as of this __ day of June, 2002. CENTRAL FLORIDA INVESTMENTS, INC. By: /s/ DAVID A. SIEGEL ------------------------- Name: DAVID A. SIEGEL Title: PRESIDENT Signature Page to Registration Rights Agreement
EXHIBIT 5.1 June 13, 2002 USA Interactive 152 West 57th Street, 42nd Floor New York, NY 10019 Ladies and Gentlemen: We have acted as counsel to USA Interactive, a Delaware corporation (the Company"), in connection with the preparation and filing of the Registration Statement on Form S-3 of the Company (as amended, the "Registration Statement") under the Securities Act of 1933, as amended (the "Act"), relating to the resale of up to 11,805,555 shares of the Company's common stock, par value $.01 per share (the "Shares"), to be issued by the Company pursuant to the Agreement and Plan of Merger dated as of May 30, 2002 (the "Merger Agreement"), among the Company, Interval Acquisition Corp., a Delaware corporation ("Interval"), I Exchange Merger Corp., a Delaware corporation, and certain stockholders of Interval who are signatories thereto. We have reviewed such corporate records, certificates and other documents, and such questions of law, as we have considered necessary or appropriate for the purposes of this opinion. We have assumed that all signatures are genuine, that all documents submitted to us as originals are authentic, and that all copies of documents submitted to us conform to the originals. We have relied as to certain matters on information obtained from public officials, officers of the Company and other sources believed by us to be responsible. Based upon the foregoing, and subject to the qualifications set forth below, we are of the opinion that the Shares have been duly authorized, and, when the Registration Statement has been declared effective by order of the Securities and Exchange Commission and the Shares have been issued and delivered to and paid for by the stockholders of Interval pursuant to the Merger Agreement, and assuming compliance with the Act, will be legally issued, fully paid and nonassessable. We are members of the bar of the State of New York. We do not purport to be experts in, and do not express any opinion on, any laws other than the law of the State of New York, the Delaware General Corporation Law and the Federal law of the United States of America. USA Interactive June 13, 2002 Page 2 We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement and to the reference to our firm under the heading "Legal Matters" in the Prospectus contained in the Registration Statement. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act. Very truly yours, /s/ COVINGTON & BURLING
EXHIBIT 23.1 CONSENT OF ERNST & YOUNG LLP We consent to the reference to our firm under the caption "Experts" in this Registration Statement on Form S-3 of USA Interactive and the related Prospectus and to the incorporation by reference therein of our report dated January 29, 2002 with respect to the consolidated financial statements and financial statement schedule of USA Networks, Inc. (renamed USA Interactive) included in its Annual Report (Form 10-K) for the year ended December 31, 2001, filed with the Securities and Exchange Commission. /s/ ERNST & YOUNG New York, New York June 13, 2002