Common use of Effect of Certain Dividends Clause in Contracts

Effect of Certain Dividends. In case at any time the Company shall declare a dividend upon the Common Shares payable otherwise than out of earnings or earned surplus (other than in a partial or total liquidation or dissolution of the Company) and otherwise than in Common Shares or Convertible Securities, the per share Exercise Price in effect immediately prior to the declaration of such dividend shall be reduced by an amount equal, in the case of a dividend in cash, to the amount thereof payable per Common Share or, in the case of any other dividend, to the fair value thereof per Common Share as determined by the Board of Directors of the Company. For the purposes of the foregoing a dividend other than in cash shall be considered payable out of earnings or earned surplus only to the extent that such earnings or earned surplus are charged an amount equal to the fair value of such dividend as determined by the Board of Directors of the Company. Such reductions shall take effect as of the date on which a record is taken for the purpose of such dividend, or if a record is not taken, the date as of which the holders of record of Common Shares entitled to such dividends are to be determined. As used in this subsection D, the term "dividend" shall mean any distribution to the holders of Common Shares. Except as provided in this subsection D, no adjustment in the Exercise Price and no change in the number of Warrant Shares so purchasable shall be made pursuant to this Section 5 as a result of or by reason of any such dividend.