Common use of Conversion Privilege and Conversion Price Clause in Contracts

Conversion Privilege and Conversion Price. Subject to and upon compliance with the provisions of this Section 8, each Lender, at its sole option, may, at any time after termination of the Merger Agreement and from time to time thereafter, convert (a) each Note or any portion of the principal amount thereof which equals $500,000 or any integral multiple thereof, and (b) the amount of accrued and unpaid Interest on the Loan represented by such Note (including without limitation any overdue Interest accruing at the Default Rate), into a number of fully paid and nonassessable shares (calculated as to each conversion to the nearest 1/100 of a share) of CDnow Common Stock equal to the quotient obtained by dividing (i) the aggregate of such principal amount and accrued and unpaid interest to be so converted by (ii) the Conversion Price, determined as hereinafter provided, in effect at the time of conversion. Any certificates evidencing CDnow Common Stock issued upon the conversion of the Note shall bear such legends, including legends reflecting restrictions on transfer required in order to maintain compliance with the provisions of the Securities Act, as the Borrower shall deem to be necessary or appropriate.