Common use of Exchange Rate Adjustments Clause in Contracts

Exchange Rate Adjustments. Subject to Section 3.5 hereof, the Exchange Rate shall be subject to adjustment from time to time as provided below in this Section 3.1. (i) If HSN shall, after the Closing Date: (1) pay a stock dividend or make a distribution on the outstanding shares of HSN Common Stock in shares of HSN Common Stock, (2) subdivide or split the outstanding shares of HSN Common Stock into a greater number of shares, (3) combine the outstanding shares of HSN Common Stock into a smaller number of shares, (4) pay a dividend or make a distribution on the outstanding shares of HSN Common Stock in shares of its capital stock (other than HSN Common Stock, or rights, warrants or options for its capital stock), or (5) issue by reclassification of its outstanding shares of HSN Common Stock (other than a reclassification by way of merger or binding share exchange that is subject to Section 3.2) any shares of its capital stock (other than rights, warrants or options for its capital stock), then, in any such event, the Exchange Rate, in effect immediately prior to the opening of business on the record date for determination of stockholders entitled to receive such dividend or distribution or the effective date of such subdivision, split, combination or reclassification, as the case may be, shall be adjusted so that the holder of LLC Shares shall thereafter be entitled to receive, upon exchange of such shares, the number of shares of HSN Common Stock (or, in the case of permitted election by Universal pursuant to Section 2.1(a) and the Investment Agreement, HSN Class B Stock) or other capital stock (or a combination of the foregoing) of HSN which such holder would have owned or been entitled or otherwise permitted to receive immediately following such event if such holder had exchanged its LLC Shares immediately prior to the record date for, or effective date of, as applicable, such event. (ii) Notwithstanding the foregoing, if an event listed in clause (4) or (5) above would result in the LLC Shares being exchangeable for shares or units (or a fraction thereof) of more than one class or series of capital stock of HSN and any such class or series of capital stock provides by its terms a right in favor of HSN to call, redeem, exchange or otherwise acquire all of the outstanding shares or units of such class or series (such class or series of capital stock being herein referred to as "Redeemable Capital Stock") for consideration that may include Redemption Securities, then the Exchange Rate shall not be adjusted pursuant to this subparagraph (a) and in lieu thereof, the holders of such LLC Shares shall be entitled to the rights contemplated by paragraph (c) with the same effect as if the dividend or distribution of such Redeemable Capital Stock or the issuance of the additional class or series of such Redeemable Capital Stock by reclassification had been a distribution of assets of HSN to which such paragraph (c) is applicable. (iii) The adjustment contemplated by this paragraph (a) shall be made successively whenever any event listed above shall occur. For a dividend or distribution, the adjustment shall become effective at the opening of business on the Business Day next following the record date for such dividend or distribution. For a subdivision, split, combination or reclassification, the adjustment shall become effective immediately after the effectiveness of such subdivision, split, combination or reclassification. (iv) If after an adjustment pursuant to this paragraph (a) a holder of LLC Shares would be entitled to receive upon exchange thereof shares of two or more classes or series of capital stock of HSN, the Exchange Rate shall thereafter be subject to adjustment upon the occurrence of an action contemplated by this Section 3.1 taken with respect to any such class or series of capital stock other than HSN Common Stock on terms comparable to those applicable to the HSN Common Stock pursuant to this Section 3.1. (i) Subject to Section 3.5 hereof, if HSN shall, after the Closing Date, distribute rights, warrants or options to all or substantially all holders of its outstanding shares of HSN Common Stock and/or HSN Class B Stock entitling them (for a period not exceeding 45 days from the record date referred to below) to subscribe for or purchase shares of HSN Common Stock (or Convertible Securities for shares of HSN Common Stock) at a price per share (or having an exercise, exchange or conversion price per share, after adding thereto an allocable portion of the exercise price of the right, warrant or option to purchase such Convertible Securities, computed on the basis of the maximum number of shares of HSN Common Stock issuable upon exercise, exchange or conversion of such Convertible Securities) less than the Current Market Price on the applicable Determination Date, then, in any such event, the Exchange Rate shall be adjusted by multiplying such exchange rate in effect immediately prior to the opening of business on the record date for the determination of stockholders entitled to receive such distribution by a fraction, of which the numerator shall be the number of shares of HSN Common Stock outstanding on such record date plus the number of additional shares of HSN Common Stock so offered pursuant to such rights, warrants or options to the holders of HSN Common Stock (and to holders of Convertible Securities for shares of HSN Common Stock) for subscription or purchase (or into which the Convertible Securities for shares of HSN Common Stock so offered are exercisable, exchangeable or convertible), and of which the denominator shall be the number of shares of HSN Common Stock outstanding on such record date plus the number of additional shares of HSN Common Stock which the aggregate offering price of the total number of shares of HSN Common Stock so offered (or the aggregate exercise, exchange or conversion price of the Convertible Securities for shares of HSN Common Stock so offered, after adding thereto the aggregate exercise price of the rights, warrants or options to purchase such Convertible Securities) to the holders of HSN Common Stock (and to such holders of Convertible Securities for shares of HSN Common Stock) would purchase at such Current Market Price. (ii) The adjustment contemplated by this paragraph (b) shall be made successively whenever any such rights, warrants or options are distributed, and shall become effective immediately after the record date for the determination of stockholders entitled to receive such distribution. If all of the shares of HSN Common Stock (or all of the Convertible Securities for shares of HSN Common Stock) subject to such rights, warrants or options have not been issued when such rights, warrants or options expire (or, in the case of rights, warrants or options to purchase Convertible Securities for shares of HSN Common Stock which have been exercised, if all of the shares of HSN Common Stock issuable upon exercise, exchange or conversion of such Convertible Securities have not been issued prior to the expiration of the exercise, exchange or conversion right thereof), then the Exchange Rate shall promptly be readjusted to the Exchange Rate which would then be in effect had the adjustment upon the issuance of such rights, warrants or options been made on the basis of the actual number of shares of HSN Common Stock (or such Convertible Securities) issued upon the exercise of such rights, warrants or options (or the exercise, exchange or conversion of such Convertible Securities). (iii) No adjustment shall be made under this paragraph (b) if the adjusted Exchange Rate would be lower than the Exchange Rate in effect immediately prior to such adjustment, other than in the case of an adjustment pursuant to the last sentence of paragraph (b)(ii). The adjustment pursuant to this paragraph in respect of any one event offered to holders of both HSN Common Stock and HSN Class B Stock shall be made only once. (i) Subject to Section 3.5 hereof, if HSN shall, after the Closing Date, (x) pay a dividend or make a distribution to all or substantially all holders of its outstanding shares of HSN Common Stock and/or HSN Class B Stock of any assets (including cash) or debt securities or any rights, warrants or options to purchase securities (excluding dividends or distributions referred to in paragraph (a) (except as otherwise provided in clause (y) of this sentence) and distributions of rights, warrants or options referred to in paragraph (b)), or (y) pay a dividend or make a distribution to all or substantially all holders of its outstanding shares of HSN Common Stock and/or HSN Class B Stock of Redeemable Capital Stock, or issue Redeemable Capital Stock by reclassification of the HSN Common Stock and/or HSN Class B Stock, and pursuant to paragraph (a) such Redeemable Capital Stock is to be treated the same as a distribution of assets of HSN subject to this paragraph (c), then, in any such event, from and after the record date for determining the holders of HSN Common Stock and HSN Class B Stock entitled to receive such dividend or distribution, a holder of LLC Shares that exchanges such shares in accordance with the provisions of this Agreement will upon such Exchange be entitled to receive, in addition to the shares of HSN Common Stock or HSN Class B Stock for which such shares are then exchangeable, the kind and amount of assets or debt securities or rights, warrants or options to purchase securities comprising such dividend or distribution that such holder would have received if such holder had exchanged such LLC Shares immediately prior to the record date for determining the holders of HSN Common Stock or HSN Class B Stock entitled to receive such distribution. The adjustment pursuant to this paragraph in respect of any one event offered to holders of both HSN Common Stock and HSN Class B Stock shall be made only once. (ii) The adjustment pursuant to the foregoing provisions of this paragraph (c) shall be made successively whenever any dividend or distribution or reclassification to which this paragraph (c) applies is made, and shall become effective immediately after (x) in the case of a dividend or distribution, the record date for the determination of stockholders entitled to receive such dividend or distribution or (y) in the case of a reclassification, the effective date of such reclassification. (d) In the event that a holder of LLC Shares would be entitled to receive upon exercise of an Exchange pursuant to this Agreement any Redeemable Capital Stock and HSN redeems, exchanges or otherwise acquires all of the outstanding shares or other units of such Redeemable Capital Stock (such event being a "Redemption Event"), then, from and after the effective date of such Redemption Event, the holders of LLC Shares then outstanding shall be entitled to receive upon the Exchange of such shares (in addition to the consideration such holders are otherwise entitled to receive pursuant to this Agreement), in lieu of shares or any units of such Redeemable Capital Stock, the kind and amount of securities, cash or other assets receivable upon the Redemption Event (less any consideration paid to HSN by a holder of HSN Stock in connection with such holders' receipt of Redemption Securities upon such Redemption Event (other than the surrender of shares of Redeemable Capital Stock)) by a holder of the number of shares or units of such Redeemable Capital Stock for which such LLC Shares could have been exchanged immediately prior to the effective date of such Redemption Event (assuming, to the extent applicable, that such holder failed to exercise any rights of election with respect thereto and received per share or unit of such Redeemable Capital Stock the kind and amount of securities, cash or other assets received per share or unit by a plurality of the non-electing shares or units of such Redeemable Capital Stock) (as such type and amount of securities may be adjusted in accordance with this Agreement to reflect events or actions subsequent to the Redemption Event), and from and after the effective date of such Redemption Event the holders of LLC Shares shall have no other exchange rights under these provisions with respect to such Redeemable Capital Stock. (e) If this Section 3.1 shall require that an adjustment be made to the Exchange Rate, such adjustment shall apply to any Exchange effected after the record date for the event which requires such adjustment notwithstanding that such Exchange is effected prior to the occurrence of the event which requires such adjustment. (f) All adjustments to the Exchange Rate shall be calculated to the nearest 1/1000th of a share. No adjustment in either such exchange rate shall be required unless such adjustment would require an increase or decrease of at least one percent therein; provided, however, that any adjustment which by reason of this paragraph (f) is not required to be made shall be carried forward and taken into account in any subsequent adjustment. No adjustment need be made for a change in the par value of the HSN Common Stock and/or HSN Class B Stock. To the extent the LLC Shares become exchangeable for cash, no adjustment need be made thereafter as to the cash and no interest shall accrue on such cash, except to the extent (as required under applicable law or otherwise) such cash is to be held separate for the benefit of the holder, in which case the cash shall be placed in an interest-bearing account with such interest for the benefit of the holder. (g) HSN shall be entitled, to the extent permitted by law, to make such increases in the Exchange Rate, in addition to those referred to above in this Section 3.1, as HSN determines to be advisable in order that any stock dividends, subdivisions of shares, reclassification or combination of shares, distribution of rights, options or warrants to purchase stock or securities, or a distribution of other assets hereafter made by HSN to its stockholders shall not be taxable. (h) There shall be no adjustment to the Exchange Rate in the event of the issuance of any stock or other securities or assets of HSN in a reorganization, acquisition or other similar transaction, except as specifically provided in this Section 3.1 or, if applicable, Section 3.

Exchange Rate Adjustments. Subject to Section 3.5 hereof, the (a) The Exchange Rate shall be subject to adjustment adjusted from time to time as provided below in this Section 3.1.follows: (i) If HSN shall, the Company shall after the Closing Datedate hereof: (1) pay a stock dividend or make a distribution on the outstanding shares to holders of HSN Class A Common Stock in the form of shares of HSN Class A Common Stock or Class B Common Stock,; (2) subdivide its outstanding Class A Common Stock or split the outstanding shares of HSN Class B Common Stock into a greater number of shares,shares of Class A Common Stock or Class B Common Stock; (3) combine the its outstanding shares of HSN Class A Common Stock or Class B Common Stock into a smaller number of shares,shares of Class A Common Stock or Class B Common Stock; (4) pay a dividend or make a distribution on the outstanding shares issue any equity securities by reclassification of HSN its Class A Common Stock in shares of its capital or Class B Common stock (other than HSN Common Stock, or rights, warrants or options for its capital stock), or (5) issue by reclassification of its outstanding shares of HSN Common Stock (other than a any reclassification by way of merger or binding share exchange that is subject to Section 3.26.3(b)); or (5) any shares of its capital stock (other than issue rights, options or warrants to all holders of Class A Common Stock entitling them to subscribe for or options for its capital stock)purchase IDSs, thenClass A Common Stock and/or Class B Common Stock at a price per share less than the Fair Market Value per share of IDSs, in any such event, the Exchange Rate, in effect immediately prior to the opening of business Class A Common Stock or Class B Common Stock on the record date for the determination of stockholders entitled to receive such dividend rights, options or warrants; then the Exchange Rate in effect at the opening of business on the day following the record date for the determination of stockholders entitled to receive such distribution or at the effective date opening of business on the day following the day on which such subdivision, split, combination or reclassificationreclassification becomes effective, as the case may be, shall be adjusted so that the holder of LLC Shares any share of Class B Common Stock thereafter surrendered for exchange shall thereafter be entitled to receive, upon exchange receive the number of such shares, IDSs (including the number of shares of HSN Class A Common Stock (or, in and the case principal amount of permitted election by Universal pursuant to Section 2.1(aSenior Subordinated Notes comprising the IDSs) and the Investment Agreement, HSN other equity securities issued by reclassification of Class A Common Stock or Class B Stock) or other capital stock (or a combination of the foregoing) of HSN which Common Stock that such holder would have owned or have been entitled or otherwise permitted to receive immediately following after the happening of any of the events described above had such event if such holder had shares been exchanged its LLC Shares immediately prior to the record date for, in the case of a distribution or the effective date of, as applicable, such event. (ii) Notwithstanding the foregoing, if an event listed in clause (4) or (5) above would result in the LLC Shares being exchangeable for shares case of a subdivision, combination or units (or a fraction thereof) of more than one class or series of capital stock of HSN and any such class or series of capital stock provides by its terms a right in favor of HSN to call, redeem, exchange or otherwise acquire all of the outstanding shares or units of such class or series (such class or series of capital stock being herein referred to as "Redeemable Capital Stock") for consideration that may include Redemption Securities, then the Exchange Rate shall not be adjusted reclassification. An adjustment made pursuant to this subparagraph (ai) and in lieu thereof, the holders of such LLC Shares shall be entitled to the rights contemplated by paragraph (c) with the same effect as if the dividend or distribution of such Redeemable Capital Stock or the issuance of the additional class or series of such Redeemable Capital Stock by reclassification had been a distribution of assets of HSN to which such paragraph (c) is applicable. (iii) The adjustment contemplated by this paragraph (a) shall be made successively whenever any event listed above shall occur. For a dividend or distribution, the adjustment shall become effective at immediately after the opening of business on the Business Day next day following the such record date for such dividend or distribution. For (except as provided in Section 6.3(e)) in the case of a subdivision, split, combination or reclassification, the adjustment distribution and shall become effective immediately after the effectiveness opening of such business on the day next following the effective date in the case of a subdivision, split, combination or reclassification. (ivii) If after an adjustment pursuant to this paragraph (a) a holder of LLC Shares would be entitled to receive upon exchange thereof shares of two or more classes or series of capital stock of HSN, the Exchange Rate shall thereafter be subject to adjustment upon the occurrence of an action contemplated by this Section 3.1 taken with respect to any such class or series of capital stock other than HSN Common Stock on terms comparable to those applicable to the HSN Common Stock pursuant to this Section 3.1. Except as provided in clause (i) Subject to of this Section 3.5 hereof6.3(a), if HSN shall, the Company shall after the Closing Date, distribute rights, warrants date of consummation of the Offering issue or options to all or substantially all holders of its outstanding sell shares of HSN Common Stock and/or HSN Class B Stock entitling them (for a period not exceeding 45 days from the record date referred to below) to subscribe for or purchase shares of HSN A Common Stock (or Convertible Securities securities convertible into or exchangeable for shares of HSN Class A Common Stock) at a price per share (or having an exercise, exchange or conversion price per share, after adding thereto an allocable portion of the exercise price of the right, warrant or option to purchase such Convertible Securities, computed on the basis of the maximum number of shares of HSN Class A Common Stock issuable upon exercise, exchange or conversion of such Convertible Securities) less than the Current Fair Market Price Value per share of Class A Common Stock on the applicable Determination Date, then, in any such event, the Exchange Rate shall be adjusted by multiplying such exchange rate in effect immediately prior to the opening date of business on the record date for the determination of stockholders entitled to receive such distribution by a fraction, of which the numerator shall be the number of shares of HSN Common Stock outstanding on such record date plus the number of additional shares of HSN Common Stock so offered pursuant to such rights, warrants issuance or options to the holders of HSN Common Stock (and to holders of Convertible Securities for shares of HSN Common Stock) for subscription or purchase (or into which the Convertible Securities for shares of HSN Common Stock so offered are exercisable, exchangeable or convertible), and of which the denominator shall be the number of shares of HSN Common Stock outstanding on such record date plus the number of additional shares of HSN Common Stock which the aggregate offering price of the total number of shares of HSN Common Stock so offered (or the aggregate exercise, exchange or conversion price of the Convertible Securities for shares of HSN Common Stock so offered, after adding thereto the aggregate exercise price of the rights, warrants or options to purchase such Convertible Securities) to the holders of HSN Common Stock (and to such holders of Convertible Securities for shares of HSN Common Stock) would purchase at such Current Market Price. (ii) The adjustment contemplated by this paragraph (b) shall be made successively whenever any such rights, warrants or options are distributed, and shall become effective immediately after the record date for the determination of stockholders entitled to receive such distribution. If all of the shares of HSN Common Stock (or all of the Convertible Securities for shares of HSN Common Stock) subject to such rights, warrants or options have not been issued when such rights, warrants or options expire (or, in the case of rights, warrants or options to purchase Convertible Securities for shares of HSN Common Stock which have been exercised, if all of the shares of HSN Common Stock issuable upon exercise, exchange or conversion of such Convertible Securities have not been issued prior to the expiration of the exercise, exchange or conversion right thereof)sale, then the Exchange Rate shall promptly be readjusted to the Exchange Rate which would then be in effect had the adjustment upon the issuance of such rights, warrants or options been made on the basis of the actual number of shares of HSN Common Stock (or such Convertible Securities) issued upon the exercise of such rights, warrants or options (or the exercise, exchange or conversion of such Convertible Securities). (iii) No adjustment shall be made under this paragraph (b) if the adjusted Exchange Rate would be lower than the Exchange Rate in effect immediately prior to such adjustment, other than the issuance or sale shall be adjusted as the Board determines to be equitable in the case of an circumstances. Such adjustment pursuant to the last sentence of paragraph (b)(ii). The adjustment pursuant to this paragraph in respect of any one event offered to holders of both HSN Common Stock and HSN Class B Stock shall be made only once. (i) Subject to Section 3.5 hereof, if HSN shall, after the Closing Date, (x) pay a dividend or make a distribution to all or substantially all holders of its outstanding shares of HSN Common Stock and/or HSN Class B Stock of any assets (including cash) or debt securities or any rights, warrants or options to purchase securities (excluding dividends or distributions referred to in paragraph (a) (except as otherwise provided in clause (y) of this sentence) and distributions of rights, warrants or options referred to in paragraph (b)), or (y) pay a dividend or make a distribution to all or substantially all holders of its outstanding shares of HSN Common Stock and/or HSN Class B Stock of Redeemable Capital Stock, or issue Redeemable Capital Stock by reclassification of the HSN Common Stock and/or HSN Class B Stock, and pursuant to paragraph (a) such Redeemable Capital Stock is to be treated the same as a distribution of assets of HSN subject to this paragraph (c), then, in any such event, from and after the record date for determining the holders of HSN Common Stock and HSN Class B Stock entitled to receive such dividend or distribution, a holder of LLC Shares that exchanges such shares in accordance with the provisions of this Agreement will upon such Exchange be entitled to receive, in addition to the shares of HSN Common Stock or HSN Class B Stock for which such shares are then exchangeable, the kind and amount of assets or debt securities or rights, warrants or options to purchase securities comprising such dividend or distribution that such holder would have received if such holder had exchanged such LLC Shares immediately prior to the record date for determining the holders of HSN Common Stock or HSN Class B Stock entitled to receive such distribution. The adjustment pursuant to this paragraph in respect of any one event offered to holders of both HSN Common Stock and HSN Class B Stock shall be made only once. (ii) The adjustment pursuant to the foregoing provisions of this paragraph (c) shall be made successively whenever any dividend or distribution or reclassification to which this paragraph (c) applies is made, and shall become effective immediately after (x) in the case opening of business on the day following such issuance or sale. In determining whether any such issuance or sale would allow a dividend person or distributionentity to subscribe for or purchase shares of Class A Common Stock at less than the Fair Market Value, the record date for value of any consideration received by the determination of stockholders entitled to receive Company upon such dividend or distribution or (y) in sale other than cash shall be determined by the case of a reclassification, the effective date of such reclassificationBoard. (diii) In the event that a holder of LLC Shares would be entitled to receive upon exercise of an Exchange pursuant to this Agreement any Redeemable Capital Stock and HSN redeems, exchanges or otherwise acquires all of the outstanding shares or other units of such Redeemable Capital Stock (such event being a "Redemption Event"), then, from and after the effective date of such Redemption Event, the holders of LLC Shares then outstanding shall be entitled to receive upon the Exchange of such shares (No adjustment in addition to the consideration such holders are otherwise entitled to receive pursuant to this Agreement), in lieu of shares or any units of such Redeemable Capital Stock, the kind and amount of securities, cash or other assets receivable upon the Redemption Event (less any consideration paid to HSN by a holder of HSN Stock in connection with such holders' receipt of Redemption Securities upon such Redemption Event (other than the surrender of shares of Redeemable Capital Stock)) by a holder of the number of shares or units of such Redeemable Capital Stock for which such LLC Shares could have been exchanged immediately prior to the effective date of such Redemption Event (assuming, to the extent applicable, that such holder failed to exercise any rights of election with respect thereto and received per share or unit of such Redeemable Capital Stock the kind and amount of securities, cash or other assets received per share or unit by a plurality of the non-electing shares or units of such Redeemable Capital Stock) (as such type and amount of securities may be adjusted in accordance with this Agreement to reflect events or actions subsequent to the Redemption Event), and from and after the effective date of such Redemption Event the holders of LLC Shares shall have no other exchange rights under these provisions with respect to such Redeemable Capital Stock. (e) If this Section 3.1 shall require that an adjustment be made to the Exchange Rate, such adjustment shall apply to any Exchange effected after the record date for the event which requires such adjustment notwithstanding that such Exchange is effected prior to the occurrence of the event which requires such adjustment. (f) All adjustments to the Exchange Rate shall be calculated to the nearest 1/1000th of a share. No adjustment in either such exchange rate shall be required unless such adjustment would require an a cumulative increase or decrease of at least one percent therein1% in the Exchange Rate; provided, however, that any adjustment which adjustments that by reason of this paragraph subparagraph (fiii) is are not required to be made shall be carried forward and taken into account in any subsequent adjustmentadjustment until made; and provided, further, that any adjustment shall be required and made in accordance with the provisions of this Section 6.3 (other than this subparagraph (iii)) not later than such time as may be required in order to preserve the tax-free nature of a distribution to the holders of IDSs. No adjustment need All calculations under this Section 6.3 shall be made for a change in the par value of the HSN Common Stock and/or HSN Class B Stock. To the extent the LLC Shares become exchangeable for cash, no adjustment need be made thereafter as to the cash and no interest shall accrue on such cash, except nearest cent (with $.005 being rounded upward) or to the extent nearest one-tenth of a share (with .05 of a share being rounded upward), as required under applicable law or otherwisethe case may be. Anything in this subsection (a) such cash is to be held separate for the benefit of contrary notwithstanding, the holder, in which case the cash shall be placed in an interest-bearing account with such interest for the benefit of the holder. (g) HSN Company shall be entitled, to the extent permitted by law, to make such increases in the Exchange Rate, in addition to those referred to above in required by this Section 3.1subsection (a), as HSN determines it in its discretion shall determine to be advisable in order that any stock dividendsshare distributions, subdivisions of sharessubdivision, reclassification or combination of shares, distribution of rights, options or warrants to purchase stock shares or securities, or a distribution of other assets (other than cash distributions) hereafter made by HSN the Company to its stockholders shareholders shall not be taxable. (hb) Except as otherwise provided for in Section 6.3(a)(i), if the Company shall be a party to any transaction (including, without limitation, a merger, consolidation, statutory share exchange, tender offer for all or substantially all of the IDSs or Class A Common Stock, sale or transfer of all or substantially all of the Company' assets or recapitalization of the IDSs or Class A Common Stock) (each of the foregoing being referred to herein as a "Transaction"), in each case as a result of which IDSs or Class A Common Stock shall be converted into the right to receive shares, stock, securities or other property (including cash or any combination thereof), the Company (or its successor in such Transaction) shall make appropriate provision so that each share of Class B Common Stock, if not converted into the right to receive shares, stock, securities or other property in connection with such Transaction in accordance with the third to last sentence of this subsection (b) shall thereafter be exchangeable into the kind and amount of shares, stock, securities and other property (including cash or any combination thereof) receivable upon the consummation of such Transaction by a holder of that number of IDSs into which one share of Class B Common Stock was convertible immediately prior to such Transaction, assuming such holder of Common Stock (i) is not a person with which the Company consolidated or into which the Company merged or which merged into the Company or to which such sale or transfer was made, as the case may be (a "Constituent Person"), or an affiliate of a Constituent Person and (ii) failed to exercise his rights of the election, if any, as to the kind or amount of shares, stock, securities and other property (including cash or any combination thereof) receivable upon such Transaction (each, a "Non-Electing Share") (provided that if the kind and amount of shares, stock, securities and other property (including cash or any combination thereof) receivable upon consummation of such Transaction is not the same for each Non-Electing Share, the kind and amount of shares, stock, securities and other property (including cash or any combination thereof) receivable upon such Transaction by each Non-Electing Share shall be deemed to be the kind and amount so receivable per share by a plurality of the Non-Electing Shares). The Company shall not be a party to any Transaction in which any share of Class B Common Stock is converted into the right to receive shares, stock, securities or other property (including cash or any combination thereof) with an aggregate value (as determined by the Board in good faith, whose determination shall be conclusive) less than that receivable by the number of shares of IDSs into which shares of Class B Common Stock were exchangeable immediately prior to such Transaction. The Company shall not be a party to any Transaction unless the terms of such Transaction are consistent with the provisions of this subsection (b), and it shall not consent or agree to the occurrence of any Transaction until the Company has entered into an agreement with the successor or purchasing entity, as the case may be, for the benefit of the holders of the Class B Common Stock that will contain provisions enabling holders of Class B Common Stock that remains outstanding after such Transaction to exchange their Class B Common Stock into the consideration received by holders of IDSs at the Exchange Rate in effect immediately prior to such Transaction. The provisions of this subsection (b) shall similarly apply to successive Transactions. (c) If: (i) the Company shall declare a distribution (other than cash distributions which do not constitute extraordinary dividends) on the Class A Common Stock in the form of shares of Class A Common Stock or Class B Common Stock, or there shall be a reclassification, subdivision or combination of the Class A Common Stock or Class B Common Stock; or (ii) the Company shall grant to the holders of Class A Common Stock rights, options or warrants to subscribe for or purchase IDSs, Class A Common Stock or Class B Common Stock at less than Fair Market Value; or (iii) the Company shall sell Class A Common Stock or securities convertible into Class A Common Stock for less than Fair Market Value; or (iv) the Company shall enter into a Transaction; or (v) there shall occur the voluntary or involuntary liquidation, dissolution or winding up of the Company; then the Company shall cause to be mailed to the holders of the Class B Common Stock at their addresses as shown on the stock transfer records of the Company, as promptly as possible, but at least 15 days prior to the applicable date hereinafter specified, a notice stating (i) the date on which a record is to be taken for the purpose of such distribution or rights, options or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock or IDSs of record to be entitled to such distribution or rights, options or warrants are to be determined or (ii) the date on which such reclassification, subdivision, combination, Transaction or liquidation, dissolution or winding up is expected to become effective, and the date as of which it is expected that holders of IDSs of record shall be entitled to exchange their IDS (or shares of Class A Common Stock or Senior Subordinated Notes comprising the IDSs) for securities or other property, if any, deliverable upon such reclassification, subdivision, combination, Transaction or liquidation, dissolution or winding up. Failure to give or receive such notice or any defect therein shall not affect the legality or validity of the proceedings described in this Section 6.3. (d) Whenever the Exchange Rate is adjusted as herein provided, the Company shall promptly prepare a notice of such adjustment of the Exchange Rate setting forth the adjusted Exchange Rate and the effective date such adjustment becomes effective and shall mail such notice of such adjustment of the Exchange Rate to the holder of each share of Class B Common Stock at such holder's last address as shown on the stock transfer records of the Company. The inclusion of the Company's calculation of the adjusted Exchange Rate as set forth in such notice shall be conclusive evidence of the correctness of such adjustment absent manifest error. (e) In any case in which Section 6.3(a) provides that an adjustment shall become effective on the day following the record date for an event, the Company may defer until the occurrence of such event (i) issuing to the holder of any share of Class B Common Stock converted after such record date and before the occurrence of such event the additional IDSs issuable upon such conversion by reason of the adjustment required by such event over and above the shares of IDSs issuable upon such conversion before giving effect to such adjustment and (ii) fractionalizing any share of Class B Common Stock and/or paying to such holder any amount of cash in lieu of any fraction pursuant to Section 6.2. (f) There shall be no adjustment to of the Exchange Rate in the event case of the issuance of any stock or other equity securities or assets of HSN the Company in a reorganization, acquisition or other similar transaction, transaction except as specifically provided set forth in this Section 3.1 or6.3. If any action or transaction would require adjustment of the Exchange Rate pursuant to more than one subsection of Section 6.3(a), if applicableonly one adjustment shall be made, Section 3and such adjustment shall be the amount of adjustment that has the highest absolute value.