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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
- -------------- Washington, D.C. 20549
FORM 3
- -------------- INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES
Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934,
Section 17(a) of the Public Utility Holding Company Act of 1935 or
Section 30(f) of the Investment Company Act of 1940
(Print or Type Responses)
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1. Name and Address of Reporting Person* 2. Date of Event Requiring 4. Issuer Name and Ticker or Trading Symbol
Statement (Month/Day/Year)
TIME WARNER INC. JULY 12, 1999 CDNOW, INC. (CDNW)
75 ROCKEFELLER PLAZA
NEW YORK, NEW YORK 10019
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3. IRS Identification Number 5. Relationship of Reporting 6. If Amendment,
of Reporting Person, if an Person to Issuer Date of Original
entity (voluntary) (Check all applicable) (Month/Day/Year)
13-3527249 _____ Director
X 10% Owner
_____
_____ Officer(give title below)
_____ Other(specify below)
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7. Individual or
Joint/Group
Filing
(Check
Applicable
Line)
Form filed by One
--- Reporting Person
X Form filed by
--- More than One
Reporting Person
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TABLE I -- NON-DERIVATIVE SECURITIES BENEFICIALLY OWNED
1. Title of Security 2. Amount of Securities 3. Ownership Form: Direct (D) 4. Nature of Indirect
(Instr. 4) Beneficially Owned or Indirect (I) (Instr. 5) Beneficial
(Instr. 4) Ownership
(Instr. 5)
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Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 5(b)(v).
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FORM 3 (CONTINUED) TABLE II -- DERIVATIVE SECURITIES BENEFICIALLY OWNED (E.G.,
PUTS, CALLS, WARRANTS, OPTIONS, CONVERTIBLE SECURITIES)
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1. Title of 2. Date Exercisable 3. Title and Amount of Securities 4. Conversion or 5. Ownership Form 6. Nature of
Derivative and Expiration Underlying Derivative Security Exercise Price of of Derivative Indirect
Security Date (Instr. 4) Derivative Security: Direct Beneficial
(Instr. 4) (Month/Day/Year) Security (D) or Indirect (I) Ownership)
----------------------------------------------------------- (Instr. 5) (Instr. 5)
Date Exercisable Expiration Date Title Amount or
Number
of Shares
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OPTION TO SEE NOTE ON SEE NOTE ON COMMON STOCK, 2,265,860.5 $17.9689 SEE NOTE ON SEE NOTE ON
PURCHASE ATTACHED PAGE. ATTACHED PAGE. WITHOUT ATTACHED PAGE. ATTACHED PAGE.
PAR VALUE
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Name and Address of Reporting Person:
Time Warner Inc.
75 Rockefeller Plaza
New York, New York 10019
Additional Reporting Persons:
Sony Corporation of America
550 Madison Avenue
New York, New York 10022
Relationship to Issuer: 10% Owner
IRS Identification Number: 13-1914734
Sony Corporation
6-7-35 Kitashinagawa
Shinagawa-ku, Tokyo 141-0001 Japan
Relationship to Issuer: 10% Owner
Date of Event Requiring Statement
July 12, 1999
Issuer Name and Ticker or Trading Symbol:
CDnow, Inc. (CDNW)
**Intentional misstatements or omissions of facts constitute /s/ Spencer B. Hays 7/22/99
Federal Criminal Violations. ------------------------------ --------
See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a). **Signature of Reporting Person Date
Time Warner Inc.
Name: Spencer B. Hays
Note: File three copies of this Form, Title: Vice President and Deputy General Counsel
one of which must be manually signed.
If space is insufficient, /s/ Marinus N. Henny 7/22/99
See Instruction 6 for procedure. ------------------------------ --------
**Signature of Reporting Person Date
Potential persons who are to respond to the collection of information Sony Corporation of America
contained in this form are not required to respond unless the form Name: Marinus N. Henny
displays a currently valid OMB Number. Title: Executive Vice President and
Chief Financial Officer
/s/ Teruhisa Tokunaka 7/22/99
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**Signature of Reporting Person Date
Sony Corporation
Name: Teruhisa Tokunaka
Title: Senior Managing Director and
Chief Financial Officer
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SCHEDULE I
Notes to Form 3
Name and Address of Reporting Person:
Time Warner Inc.
75 Rockefeller Plaza
New York, New York 10019
Additional Reporting Persons:
Sony Corporation of America
550 Madison Avenue
New York, New York 10022
Relationship to Issuer: 10% Owner
Sony Corporation
6-7-35 Kitashinagawa
Shinagawa-ku, Tokyo 141-0001 Japan
Relationship to Issuer: 10% Owner
Date of Event Requiring Statement
July 12, 1999
Issuer Name and Ticker or Trading Symbol:
CDnow, Inc. (CDNW)
EXPLANATION OF RESPONSES
On July 12, 1999, Time Warner Inc., a Delaware corporation ("Time
Warner"), and Sony Corporation of America, a New York corporation ("SCA") and
the United States headquarters of, and a wholly owned subsidiary of, Sony
Corporation, a Japanese corporation ("Sony"), together with certain other
parties, entered into an Agreement of Merger and Contribution (the "Merger
Agreement") with CDnow, Inc., a Pennsylvania corporation ("CDnow"). The new
public company resulting from the merger and the other transactions contemplated
by the Merger Agreement will be owned 37.0% each by certain affiliates of Time
Warner and certain affiliates of SCA. CDnow's existing shareholders will own the
remaining 26.0% of the new holding company.
In connection with the Merger Agreement, Time Warner, SCA and CDnow
entered into a Stock Option Agreement (the "Stock Option Agreement"). Pursuant
to the Stock Option Agreement, CDnow granted to Time Warner and SCA (to be
shared equally by them) an irrevocable option (the "Option") to purchase up to
4,531,721.0 shares of common stock, without par value ("CDnow Common Stock"), of
CDnow (subject to adjustment), representing approximately 15.0% of the shares of
CDnow Common Stock outstanding on July 9, 1999, at a cash purchase price per
share equal to $17.9689. Upon exercise of the Option, each of Time Warner and
SCA may purchase up to 2,265,860.5 shares of CDnow Common Stock, which would
represent 7.0% of the shares of CDnow Common Stock outstanding (based on the
number of shares of CDnow Common Stock outstanding on July 9, 1999 and giving
effect to the issuance of the shares of CDnow Common Stock that may be purchased
by such party upon exercise of the Option). The Option may be exercised jointly
by Time Warner and SCA at any time after the occurrence of any event as a result
of which Time Warner and SCA become entitled to receive a termination fee under
the Merger Agreement. The Option will terminate upon the earliest of (i) the
effective time of the merger, (ii) 90 days after the termination fee is paid and
(iii) the termination of the Merger Agreement (unless Time Warner and SCA have
the right to receive the termination fee upon the occurrence of certain events,
in which case the Option will not terminate until the later of (x) 90 days after
the termination fee is paid and (y) the expiration of the period in which Time
Warner and SCA have the right to receive the termination fee).
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