Common use of Capital Structure Clause in Contracts

Capital Structure. The authorized capital stock of CDnow consists of 200,000,000 shares of CDnow Common Stock, without par value, and 50,000,000 shares of preferred stock, without par value (together with the CDnow Common Stock, the "CDnow Capital Stock"). At the close of business on July 9, 1999, (i) 30,211,473 shares of CDnow Common Stock were issued and outstanding, (ii) no shares of CDnow Common Stock were held by CDnow in its treasury and (iii) 1,511,934 additional shares of CDnow Common Stock were reserved for issuance pursuant to the CDnow Stock Plans (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04) outstanding at the close of business on July 12, 1999, together with the number of shares of CDnow Common Stock subject to each such CDnow Employee Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in the CDnow Disclosure Letter, at the close of business on July 12, 1999, no shares of capital stock or other voting securities of CDnow were issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights. All outstanding shares of CDnow Capital Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the PBCL, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise bound. There are not any bonds, debentures, notes or other indebtedness of CDnow having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow Common Stock may vote ("Voting CDnow Debt"). Except as set forth above or in the CDnow Disclosure Letter, there are not any options, warrants, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which CDnow or any CDnow Subsidiary is a party or by which any of them is bound (i) obligating CDnow or any CDnow Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stock. There are not any outstanding contractual obligations of CDnow or any CDnow Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow or any CDnow Subsidiary. As of the Effective Time, each CDnow Warrant will, by its terms, provide the holder thereof with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereof.

Capital Structure. (i) The authorized capital stock of CDnow Anthem consists of 200,000,000 (A) 900,000,000 shares of CDnow Anthem Common Stock, without par valueof which 261,588,822 shares were outstanding as of July 20, 2015 and 50,000,000 (B) 100,000,000 shares of preferred stock, without par value (together with the CDnow Common Stockvalue, the "CDnow Capital Stock")none of which are outstanding. At the close of business on July 9, 1999, (i) 30,211,473 shares of CDnow Except for Anthem Common Stock were issued and outstanding, (ii) no shares upon exercise of CDnow Common Anthem Stock were held by CDnow in its treasury and (iii) 1,511,934 additional shares of CDnow Common Stock were reserved for issuance pursuant to the CDnow Stock Plans (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04) outstanding at the close of business on July 12, 1999, together with the number of shares of CDnow Common Stock subject to each such CDnow Employee Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in the CDnow Disclosure Letter, at the close of business on July 12, 1999Options, no shares of capital stock or other voting securities of CDnow were issuedAnthem Common Stock have been issued between July 20, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights2015 and the date hereof. All issued and outstanding shares of CDnow Capital Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, capital stock of Anthem are duly authorized, validly issued, fully paid and nonassessable nonassessable, and not subject no class of capital stock is entitled to (or has been issued in violation of) preemptive rights. Other than 5,843,466 shares of any Anthem Common Stock reserved for issuance under the Anthem Employee Stock Purchase Plan (the “Anthem ESPP”), there were outstanding as of the date hereof no options, warrants or other rights to acquire capital stock from Anthem other than the employee or director stock options exercisable for shares of Anthem Common Stock (the “Anthem Stock Options”) representing in the aggregate the right to purchase option, call option, right no more than 22,019,706 shares of first refusal, preemptive right, subscription right or any similar right Anthem Common Stock under any provision stock option or similar plan of Anthem (the PBCL“Anthem Stock Plans”) or otherwise. All shares of Anthem Common Stock to be issued in connection with the Merger and the other transactions contemplated hereby (including all shares of Anthem Common Stock to be issued with respect to the Cigna Stock Options, the CDnow CharterCigna Restricted Stock Awards described in Section 1.11(c) and the Converted Other Stock Awards) will, when issued in accordance with the CDnow Byterms hereof, have been duly authorized, validly issued, fully paid and non-laws or any Contract assessable, free and clear of all Liens (as defined in Section 3.05) 8.13). There are no shareholder agreements, voting trusts or other agreements or understandings to which CDnow Anthem is a party or otherwise bound. There are not by which it is bound relating to the voting of any shares of the capital stock of Anthem. (ii) No bonds, debentures, notes or other indebtedness of CDnow Anthem having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders shareholders of CDnow Common Stock Anthem may vote vote, are issued or outstanding. ("Voting CDnow Debt"). iii) Except as otherwise set forth above or in this Section 3.1(b), as of the CDnow Disclosure Letterdate of this Agreement, there are not any no securities, options, warrants, calls, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contractsagreements, arrangements or undertakings of any kind to which CDnow Anthem or any CDnow Subsidiary of its Subsidiaries is a party or by which any of them is bound (i) obligating CDnow Anthem or any CDnow Subsidiary of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, voting securities of Anthem or any security convertible of its Subsidiaries or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow obligating Anthem or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary of its Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, security, commitment, Contractagreement, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stockundertaking. There are not any no outstanding contractual obligations of CDnow Anthem or any CDnow Subsidiary of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow Anthem or any CDnow Subsidiary. As of the Effective Time, each CDnow Warrant will, by its terms, provide the holder thereof with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofSubsidiaries.

Capital Structure. (i) The authorized capital stock of CDnow Alpha consists of 200,000,000 100,000,000 shares of CDnow Alpha Common Stock. As of December 14, without par value2001, and 50,000,000 44,174,096 shares of preferred stock, without par value (together with the CDnow Common Stock, the "CDnow Capital Stock"). At the close of business on July 9, 1999, (i) 30,211,473 shares of CDnow Alpha Common Stock were issued and outstanding, (ii) outstanding and no other shares of CDnow Common Stock capital stock of Alpha were held by CDnow in its treasury issued and (iii) 1,511,934 additional outstanding. As of December 14, 2001, 10,370,507 shares of CDnow Alpha Common Stock were reserved for issuance pursuant upon exercise of options outstanding under Alpha Stock Plans. As of December 14, 2001, no shares of Alpha Common Stock were held as treasury shares. Since December 14, 2001 to the CDnow Stock Plans (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list date of all CDnow Employee Stock Options (as defined in Section 8.04) outstanding at the close of business on July 12, 1999, together with the number of shares of CDnow Common Stock subject to each such CDnow Employee Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in the CDnow Disclosure Letter, at the close of business on July 12, 1999this Agreement, no shares of capital stock of Alpha or any other voting securities of CDnow were issuedAlpha have been issued other than shares of Alpha Common Stock issued pursuant to options or rights outstanding as of December 14, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights2001 under the Alpha Stock Plans. All issued and outstanding shares of CDnow Capital Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, capital stock of Alpha are duly authorized, validly issued, fully paid and nonassessable nonassessable, and not subject no class of capital stock of Alpha is entitled to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the PBCL, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise boundrights. There are not any outstanding as of the date hereof no options, warrants or other rights to acquire capital stock from Alpha other than options and other rights to acquire Alpha Common Stock from Alpha ("Alpha Stock Options") representing in the aggregate the right to purchase 6,619,900 shares of Alpha Common Stock under the Alpha Stock Plans. Section 5.1(b) of the Alpha Disclosure Schedule sets forth a complete and correct list as of a recent date of all outstanding Alpha Stock Options and the exercise prices thereof. (ii) No bonds, debentures, notes or other indebtedness of CDnow Alpha having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders stockholders of CDnow Common Stock Alpha may vote ("Alpha Voting CDnow Debt"). ) are issued or outstanding. (iii) Except as otherwise set forth above or in this Section 5.1(b), as of the CDnow Disclosure Letterdate of this Agreement, there are not any no securities, options, warrants, calls, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contractsagreements, arrangements or undertakings of any kind to which CDnow Alpha or any CDnow Subsidiary of its Subsidiaries is a party or by which any of them is bound (i) obligating CDnow Alpha or any CDnow Subsidiary of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, voting securities of Alpha or any security convertible of its Subsidiaries or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow obligating Alpha or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary of its Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, security, commitment, Contractagreement, arrangement or undertaking or (iii) that give any person undertaking. As of the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders date of CDnow Capital Stock. There this Agreement, there are not any no outstanding contractual obligations of CDnow Alpha or any CDnow Subsidiary of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow Alpha or any CDnow Subsidiary. As of the Effective Time, each CDnow Warrant will, by its terms, provide the holder thereof with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofSubsidiaries.

Capital Structure. (i) The authorized capital stock of CDnow MCBF consists of 200,000,000 of: (A) 20,000,000 shares of CDnow MCBF Common Stock, without par value, and 50,000,000 ; and (B) 5,000,000 shares of preferred stock, without par value $.01 per share. (together with ii) As of the CDnow Common Stock, the "CDnow Capital Stock"). At the close date of business on July 9, 1999, this Agreement: (iA) 30,211,473 2,403,250 shares of CDnow MCBF Common Stock were are issued and outstanding, all of which are validly issued, fully paid and nonassessable and were issued in full compliance with all applicable laws and not in violation of any preemptive rights; (iiB) no shares of CDnow MCBF preferred stock are issued and outstanding; (C) 235,138 shares of MCBF Common Stock were held by CDnow in its treasury and (iii) 1,511,934 additional shares of CDnow Common Stock were are reserved for issuance pursuant to the CDnow Stock Plans outstanding grants or awards under MCBF’s stock-based benefit plans; and (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04D) outstanding at the close of business on July 12, 1999, together with the number of no shares of CDnow MCBF Common Stock subject are held in treasury by MCBF or otherwise directly or indirectly owned by MCBF. (iii) No bonds, debentures, notes or other indebtedness having the right to each such CDnow Employee Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list vote on any matters on which stockholders of all warrants to acquire shares of CDnow Common Stock MCBF may vote are issued or outstanding. (the "CDnow Warrants"iv) outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in this Section 3.3(c), as of the CDnow Disclosure Letterdate of this Agreement, at the close of business on July 12, 1999, (A) no shares of capital stock or other voting securities of CDnow were MCBF are issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights. All and (B) neither MCBF nor any of its Subsidiaries has or is bound by any outstanding shares of CDnow Capital Stock aresubscriptions, and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the PBCL, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise bound. There are not any bonds, debentures, notes or other indebtedness of CDnow having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow Common Stock may vote ("Voting CDnow Debt"). Except as set forth above or in the CDnow Disclosure Letter, there are not any options, warrants, calls, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements commitments or undertakings agreements of any kind to which CDnow character obligating MCBF or any CDnow Subsidiary is a party or by which any of them is bound (i) obligating CDnow or any CDnow Subsidiary its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, any additional shares of capital stock of MCBF or other equity interests in, obligating MCBF or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary its Subsidiaries to issue, grant, extend or enter into any such option, warrant, call, right, convertible security, commitmentcommitment or agreement. As of the date hereof, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stock. There there are not any no outstanding contractual obligations of CDnow MCBF or any CDnow Subsidiary of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow MCBF or any CDnow Subsidiary. As of its Subsidiaries. (v) The shares of MCBF Common Stock to be issued in exchange for shares of MSB Common Stock upon consummation of the Effective Time, each CDnow Warrant will, by its terms, provide the holder thereof Merger in accordance with this Agreement have been duly authorized and when issued in accordance with the right terms of this Agreement, will be validly issued, fully paid and nonassessable and subject to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofpreemptive rights.

Capital Structure. The authorized capital stock of CDnow the Company consists of 200,000,000 (x) 100,000,000 shares of CDnow Company Common Stock, without par value, Stock and 50,000,000 (y) 20,000,000 shares of preferred stock, without par value (together with the CDnow Common $0.001 per share, of which 2,000 shares are designated as Company Preferred Stock, the "CDnow Capital Stock"). At As of the close of business on July 9April 16, 19992007, there were: (i) 30,211,473 14,292,603 shares of CDnow Company Common Stock were issued and outstanding, ; (ii) 591.6318 shares of Company Preferred Stock issued and outstanding which are convertible into 9,860,135 shares of Company Common Stock; (iii) accrued but undeclared dividends on the Company Preferred Stock which are convertible into 634,871 shares of Company Common Stock pursuant to the Certificate of Designations of the Company Preferred Stock; (iv) no shares of CDnow Company Common Stock were held by CDnow in its the treasury and of the Company; (iiiv) 1,511,934 additional 4,516,837 shares of CDnow Company Common Stock were Options available for grant pursuant to the Company Stock Option Plan; (vi) 3,483,163 shares of Company Common Stock reserved for issuance pursuant to outstanding options granted pursuant to the CDnow Company Stock Plans Option Plan; and (as defined vii) Company Warrants listed in Section 8.04(d))3.01(c) of the Company Disclosure Schedule, representing the right to purchase 7,102,838 shares of Company Common Stock. The CDnow Disclosure Letter sets Except as set forth a complete list above, as of all CDnow Employee Stock Options (as defined in Section 8.04) outstanding at the close of business on July 12April 16 2007, 1999, together with the number of shares of CDnow Common Stock subject to each such CDnow Employee Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in the CDnow Disclosure Letter, at the close of business on July 12, 1999, there were no shares of capital stock or other voting equity securities of CDnow were the Company issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights. All outstanding shares of CDnow Capital Stock capital stock of the Company are, and all such shares that which may be issued prior pursuant to the Effective Time will be Company Stock Option Plan shall be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or preemptive rights. All securities issued by the Company were issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the PBCL, the CDnow Charter, the CDnow By-compliance in all material respects with all applicable federal and state securities laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise boundand all applicable rules and regulations promulgated thereunder. There are not any no outstanding bonds, debentures, notes or other indebtedness or debt securities of CDnow having the Company or any of its Subsidiaries that have the right to vote (or that are convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders stockholders of CDnow Common Stock the Company may vote (collectively, "Voting CDnow Debt"). Except as set forth above or in the CDnow Disclosure Letterabove, there are not any no outstanding securities, options, warrants, calls, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contractsagreements, arrangements or undertakings of any kind to which CDnow the Company or any CDnow Subsidiary of its Subsidiaries is a party or by which any of them is bound (i) obligating CDnow the Company or any CDnow Subsidiary of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or voting securities of the Company or of any of its Subsidiaries or obligating the Company or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary its Subsidiaries to issue, grant, extend extend, accelerate the vesting of or enter into any such security, option, warrant, call, right, security, commitment, Contractagreement, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stockundertaking. There are not any no outstanding contractual obligations obligations, commitments, understandings or arrangements of CDnow the Company or any CDnow Subsidiary of its Subsidiaries to repurchase, redeem or otherwise acquire or make any payment in respect of any shares of capital stock of CDnow the Company or any CDnow Subsidiaryof its Subsidiaries. As To the knowledge of the Effective TimeCompany, each CDnow Warrant willexcept as provided in Section 3.01(c) of the Company Disclosure Schedule, by its termsthere are no irrevocable proxies with respect to shares of capital stock of the Company or any Subsidiary of the Company. There are no agreements or arrangements pursuant to which the Company is or could be required to register shares of Company Common Stock or other agreements or arrangements with or, provide the holder thereof with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time knowledge of the Company, among any securityholders of the Company with respect to securities of the Company. Except as set forth in Section 3.01(c) of the Company Disclosure Schedule, the Company has complied in all respects with any obligation to register shares of Company Common Stock and has not incurred any liability in connection with its failure to register such shares. Except as set forth in Section 3.01(c) of the Company Disclosure Schedule, since April 30, 2006, the Company has not (and no A) issued or permitted to be issued any shares of capital stock, or securities exercisable for or convertible into shares of capital stock, of the Company or any of its Subsidiaries; (B) repurchased, redeemed or otherwise acquired, directly or indirectly through one or more Subsidiaries, any shares of capital stock of the Company or any of its Subsidiaries or (C) declared, set aside, made or paid to the stockholders of the Company dividends or other consideration) upon exercise thereofdistributions on the outstanding shares of capital stock of the Company.

Capital Structure. The authorized capital stock of CDnow Company ----------------- consists solely of 200,000,000 shares of CDnow 52,400,000 Common Stock, without par value, Shares and 50,000,000 1,600,000 shares of preferred stock, without par value (together with $1.00 per share, of Company. As of the CDnow Common Stock, the "CDnow Capital Stock"). At the close of business on July 9, 1999, date hereof: (i) 30,211,473 shares of CDnow 21,333,398 Common Stock Shares were issued and outstanding, ; (ii) no shares of CDnow Common Stock 170,000 Preferred Shares were held by CDnow in its treasury issued and outstanding; (iii) 1,511,934 additional shares of CDnow 2,578,762 Common Stock Shares were reserved for issuance pursuant to outstanding Options granted under the CDnow Stock Plans (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04) outstanding at the close of business on July 12, 1999, together with the number of shares of CDnow Common Stock subject to each such CDnow Employee Stock Option Plans; (iv) 5,200,000 Common Shares were reserved for issuance upon conversion of Preferred Shares; (v) 1,407,973 Common Shares were reserved for issuance pursuant to outstanding Warrants issued under or evidenced by the Warrant Documents; and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow (vi) no Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereofShares were held by Company in its treasury. Except as set forth above or in the CDnow Disclosure Letterimmediately preceding sentence, at as of the close of business on July 12, 1999date hereof, no shares of capital stock or other voting equity securities of CDnow Company were issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights. All outstanding shares of CDnow Capital Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, capital stock of Company are duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as specified above or issued in violation Section 4.1(d) of the Disclosure Schedule, and except for the Stock Option Agreement, neither Company nor any Subsidiary of Company has or is subject to or bound by or, at or after the Effective Time will have or be subject to or bound by, any outstanding option, warrant, call, subscription or other right (including any preemptive right), agreement or commitment which (i) obligates Company or any Subsidiary of Company to issue, sell or transfer, or repurchase, redeem or otherwise acquire, any shares of the capital stock of Company or any Subsidiary of Company, (ii) restricts the transfer of any purchase option, call option, right shares of first refusal, preemptive right, subscription right capital stock of Company or any similar right under of its Subsidiaries, or (iii) relates to the voting of any provision shares of the PBCL, the CDnow Charter, the CDnow By-laws capital stock of Company or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise boundof its Subsidiaries. There are not any No bonds, debentures, notes or other indebtedness of CDnow Company or any Subsidiary of Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders the stockholders of CDnow Common Stock Company or any Subsidiary of Company may vote ("Voting CDnow Debt")are issued or outstanding. Except as set forth above or specified in Section 4.1(d) of the CDnow Disclosure LetterSchedule, there are not any options, warrants, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings all of any kind to which CDnow or any CDnow Subsidiary is a party or by which any of them is bound (i) obligating CDnow or any CDnow Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stock. There are not any outstanding contractual obligations of CDnow or any CDnow Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow each Subsidiary of Company have been duly authorized, validly issued, fully paid and nonassessable and are owned by Company, by one or any CDnow Subsidiary. As more Subsidiaries of Company, by Company and one or more such Subsidiaries, or by persons who are designees of Company or a Subsidiary of Company in the case of foreign qualifying shares held by such persons in accordance with the laws of the Effective Timejurisdiction of organization of certain foreign Subsidiaries of Company, each CDnow Warrant willfree and clear of Liens (as hereinafter defined). Company has taken all necessary corporate action to authorize, reserve for issuance and permit the issuance of, and at all times from the date hereof until the Stock Option Agreement terminates will keep reserved for issuance upon exercise of the option granted to Parent pursuant to the Stock Option Agreement, all Common Shares or other securities which may be issuable pursuant to the Stock Option Agreement. All Common Shares or other securities which may be issuable pursuant to the Stock Option Agreement, upon issuance pursuant thereto, will be duly authorized, validly issued, fully paid and nonassessable, and will be delivered free and clear of all Liens. All Common Shares held pursuant to the Escrow Agreement, dated as of July 18, 1996, by its termsand among ▇▇▇▇▇▇▇ Information Systems, provide Inc., ▇▇▇▇▇ ▇. ▇▇▇▇▇, as agent for the holder thereof former stockholders of Cadre Technologies, and State Street Bank and Trust Company, as escrow agent, have been distributed in accordance with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise terms thereof.

Capital Structure. The authorized capital stock of CDnow the Company consists of 200,000,000 shares 240,000,000 Shares, of CDnow Common Stock, without par value, and 50,000,000 shares which 116,470,432 Shares were outstanding as of preferred stock, without par value (together with the CDnow Common Stock, the "CDnow Capital Stock"). At the close of business on July 9January 15, 19991998, (i) 30,211,473 and 12,000,000 shares of CDnow Common Stock were issued and outstandingPreferred Stock, par value $50.00 per share (ii) the "Preferred Shares"), of which no shares were outstanding as of CDnow Common Stock were held by CDnow in its treasury and (iii) 1,511,934 additional shares of CDnow Common Stock were reserved for issuance pursuant to the CDnow Stock Plans (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04) outstanding at the close of business on July 12January 15, 19991998. All of the outstanding Shares have been duly authorized and are validly issued, together with fully paid and nonassessable. Other than Shares reserved for issuance under the number Stock Option Agreement, the Company has no commitments to issue or deliver Shares or Preferred Shares, except that, as of shares of CDnow Common Stock January 15, 1998, there were 10,116,531 Shares subject to each such CDnow issuance pursuant to the Company's Stock Incentive Plan of 1997, Amended and Restated 1993 Stock Plan for Non-Employee Directors, the 1992 Employee Stock Option Plan, Stock Incentive Plan of 1991, Stock Option Plan of 1990, Stock Option Plan of 1987, 1994 Stock Plan for Employees of the Company and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Titan Stock Option Plans (the "CDnow WarrantsCompany Stock Plans") ), 2,400,000 Preferred Shares subject to issuance pursuant to the Amended and Restated Rights Agreement, dated as of March 11, 1997, between the Company and The Bank of New York, as Rights Agent (the "Rights Agreement"), and 5,181,588 Shares subject to issuance pursuant to the Company's Zero Coupon Convertible Notes due 2009 (the "Convertible Notes"). The Company Disclosure Letter contains a list, which is complete and accurate in all material respects as of the date specified therein, of each outstanding at option to purchase or acquire Shares under each of the close Company Stock Plans (each a "Company Option"), including the plan, the holder, date of business on July 12grant, 1999 together with the exercise price and number of shares Shares subject thereto. Each of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in the CDnow Disclosure Letter, at the close of business on July 12, 1999, no outstanding shares of capital stock or other voting securities of CDnow were issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights. All outstanding shares each of CDnow Capital Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, Company's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and not subject to owned by the Company or issued in violation a direct or indirect wholly-owned subsidiary of the Company, free and clear of any purchase optionlien, call optionpledge, right security interest, claim or other encumbrance. Except as described above, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of first refusal, preemptive right, subscription right capital stock or other securities of the Company or any similar of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right under to subscribe for or acquire, any provision securities of the PBCL, the CDnow Charter, the CDnow By-laws Company or any Contract (as defined in Section 3.05) to which CDnow is a party of its Subsidiaries, and no securities or otherwise boundobligations evidencing such rights are authorized, issued or outstanding. There are The Company does not have outstanding any bonds, debentures, notes or other indebtedness obligations the holders of CDnow having which have the right to vote (or, except as referred to in this subsection (b), convertible into or convertible into, or exchangeable for, exercisable for securities having the right to vote) with the stockholders of the Company on any matters on which holders of CDnow Common Stock may vote ("Voting CDnow Debt"). Except as set forth above or in the CDnow Disclosure Letter, there are not any options, warrants, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which CDnow or any CDnow Subsidiary is a party or by which any of them is bound (i) obligating CDnow or any CDnow Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stock. There are not any outstanding contractual obligations of CDnow or any CDnow Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow or any CDnow Subsidiary. As of the Effective Time, each CDnow Warrant will, by its terms, provide the holder thereof with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofmatter.

Capital Structure. (a) The authorized capital stock of CDnow the Company consists of 200,000,000 1,200,000,000 shares of CDnow Company Common Stock, without par value, Stock and 50,000,000 100,000,000 shares of preferred stock, without par value $0.01 per share, of the Company (together with the CDnow Common “Company Preferred Stock, the "CDnow Capital Stock"”). At the close of business on July 9March 13, 19992020 (the “Capitalization Date”), (i) 30,211,473 226,521,289 shares of CDnow Company Common Stock were issued and outstanding, none of which were held by any Company Subsidiary, (ii) no 280,222 shares of CDnow Common Stock were held by CDnow in its treasury and (iii) 1,511,934 additional shares of CDnow Company Common Stock were reserved and available for issuance pursuant to the CDnow Company Stock Plans Plan in respect of outstanding awards, all of which were subject to outstanding Company RSUs, (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04iii) outstanding at the close of business on July 12, 1999, together with the number of 3,612,368 shares of CDnow Company Common Stock subject to each such CDnow Employee were available for issuance for awards not yet granted under the Company Stock Option Plan and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire (iv) no shares of CDnow Common Company Preferred Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereofwere outstanding. Except as set forth above or in the CDnow Disclosure Letterabove, at the close of business on July 12, 1999the Capitalization Date, no shares of capital stock of, or other equity, voting securities of CDnow or ownership interests in, the Company were issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights. All outstanding shares of CDnow Capital Company Common Stock are, and all such shares that may be issued prior to the Effective Time Closing Date will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the PBCLDGCL, the CDnow Amended and Restated Certificate of Incorporation of the Company (the “Company Charter”), the CDnow By-laws Second Amended and Restated Bylaws of the Company (the “Company Bylaws”) or any Contract (as defined in Section 3.05) to which CDnow the Company is a party or otherwise bound (other than any Contracts to which Parent or any Parent Subsidiary is a party or otherwise bound). There are not any bonds, debentures, notes or other indebtedness is no Indebtedness of CDnow the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow Company Common Stock may vote ("“Company Voting CDnow Debt"”). Section 5.04(a) of the Company Disclosure Letter sets forth a true and complete list, as of the close of business on the Capitalization Date, of all outstanding Company RSUs, the number of shares of Company Common Stock with respect thereto, the grant dates and vesting schedules thereof and the names of the holders thereof. Except as set forth above or in above, as of the CDnow Disclosure Letter, date of this Agreement there are not any no options, warrants, rights, convertible or exchangeable securities, "other securities, “phantom" ” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which CDnow the Company or any CDnow Company Subsidiary is a party or by which any of them is bound (iother than any Contracts, arrangements or undertakings to which Parent or any Parent Subsidiary is a party or by which any of them is bound) (x) obligating CDnow the Company or any CDnow Company Subsidiary to issue, grant, deliver or sell, or cause to be issued, granted, delivered or sold, additional shares of capital stock of or other equity equity, voting or ownership interests in, or any security convertible or exercisable for or exchangeable into any capital stock of of, or other equity equity, voting or ownership interest in, CDnow the Company or any CDnow Company Subsidiary or any Company Voting CDnow Debt, (iiy) obligating CDnow the Company or any CDnow Company Subsidiary to issue, grant, sell, extend or enter into any such option, warrant, call, right, security, unit, commitment, Contract, arrangement or undertaking or (iiiz) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stockthe capital stock of the Company or any Company Subsidiary. There As of the date of this Agreement, there are not any outstanding contractual obligations of CDnow the Company or any CDnow Company Subsidiary to (i) repurchase, redeem or otherwise acquire any shares of capital stock of CDnow of, or other equity, voting or ownership interests in, the Company or any CDnow SubsidiaryCompany Subsidiary or (ii) vote or dispose of any shares of capital stock of, or other equity, voting or ownership interest in, any Company Subsidiaries. As In any event, the maximum number of shares of Eligible Shares that will be outstanding (on a fully diluted basis) at the Exchange Effective Time shall be not more than 90,782,213. (b) During the period from the close of business on the Capitalization Date to the date of this Agreement, there have been no issuances by the Company of any shares of capital stock of, or other equity, voting or ownership interests in, the Company other than issuances of shares of Company Common Stock in connection with the vesting or settlement of Company RSUs in accordance with their terms. To the Knowledge of the Effective TimeCompany, each CDnow Warrant will, by its terms, provide the holder thereof with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (there are no irrevocable proxies and no voting agreements with respect to any shares of the capital stock or other consideration) upon exercise thereofvoting securities of the Company or any Company Subsidiary other than the Voting Agreement.

Capital Structure. The authorized capital stock of CDnow the Company consists of 200,000,000 (i) 100,000,000 shares of CDnow Company Common StockStock (of which, without par valueas of July 21, 2000, 32,757,155 shares were issued and 50,000,000 outstanding) and (ii) 10,000,000 shares of preferred stock, without par value $0.01 per share (together with the CDnow Common Stock, the "CDnow Capital Stock"). At the close of business on July 9, 1999, (i) 30,211,473 which no shares of CDnow Common Stock were are issued and outstanding, ). No other capital stock of the Company is authorized or issued and outstanding. SECTION 3.01(c) OF THE COMPANY DISCLOSURE SCHEDULE sets forth (iiu) no shares of CDnow Common Stock were held by CDnow in its treasury and all plans or agreements (iiithe "STOCK PLANS") 1,511,934 additional shares of CDnow Common Stock were reserved for issuance pursuant to which the CDnow Stock Plans Company or any of its Subsidiaries has granted or committed to grant any option or right to acquire stock or any other award payable in or based upon Company Common Stock; (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04v) outstanding at the close of business on July 12, 1999, together with the number of shares of CDnow Company Common Stock subject to each such CDnow Employee reserved for issuance under the Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list Plans, as of all warrants to acquire shares of CDnow Common Stock July 21, 2000, (the "CDnow Warrants"w) outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Company Common Stock subject to outstanding stock options, as of July 21, 2000 (the "STOCK OPTIONS"); (x) the grant dates and exercise prices of each such warrant Stock Option and the exercise price names of the holders thereof; (y) the number of shares of Company Common Stock subject to restrictions based on satisfaction of performance criteria (the "RESTRICTED STOCK") and the names of the holders thereof; and (z) all other rights to purchase or receive Company Common Stock under the Stock Plans. Except as set forth above in SECTION 3.01(c) OF THE COMPANY DISCLOSURE SCHEDULE, there are no outstanding options, warrants or in the CDnow Disclosure Letterother securities or subscription, at the close of business on July 12, 1999, no preemptive or other rights convertible into or exchangeable or exercisable for any shares of capital stock or other equity or voting securities interests of CDnow were issued, reserved for issuance or outstanding. There the Company and there are no outstanding CDnow "phantom stock" rights, stock appreciation rightsrights or other similar rights with respect to the Company. No shares of Company Common Stock are owned by any Subsidiary of the Company. During the period from July 21, 2000 to the date of this Agreement, (A) there have been no issuances by the Company of shares of capital stock of, or other equity or voting interests in, the Company, other than issuances of shares of Company Common Stock pursuant to the exercise of Stock Options outstanding on such date as required by their terms as in effect on such date and (B) there have been no issuances by the Company of options, warrants or other rights to acquire shares of capital stock or other equity or voting interests from the Company. All outstanding shares of CDnow Capital Company Common Stock are, and all such shares of Company Common Stock that may be issued prior pursuant to the Effective Time Option Plans or rights or agreements set forth in SECTION 3.01(c) OF THE COMPANY DISCLOSURE SCHEDULE will be when issuedissued in accordance with the terms thereof, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the PBCL, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise boundrights. There are not any no bonds, debentures, notes or other indebtedness of CDnow the Company or any of its Subsidiaries, and no securities or other instruments or obligations of the Company or any of its Subsidiaries, the value of which is in any way based upon or derived from any capital or voting stock of the Company or any such Subsidiary or having the right to vote (or convertible into, or exchangeable or exercisable for, securities having the right to vote) on any matters on which holders the Shareholders or the shareholders of CDnow Common Stock any such subsidiary may vote ("Voting CDnow Debt")vote. Except as set forth above or in the CDnow Disclosure LetterSECTION 3.01(c) OF THE COMPANY DISCLOSURE SCHEDULE or as specifically permitted under Section 4.01(a), there are not any options, warrants, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings no Contracts of any kind to which CDnow the Company or any CDnow Subsidiary of its Subsidiaries is a party or by which the Company or any of them its Subsidiaries is bound (i) bound, obligating CDnow the Company or any CDnow Subsidiary of its Subsidiaries to issue, deliver deliver, grant or sell, or cause to be issued, delivered delivered, granted or sold, additional shares of capital stock of, or other equity or voting interests in, or any security options, warrants or other securities or subscription, preemptive or other rights convertible into, or exchangeable or exercisable for or exchangeable into any for, shares of capital stock of of, or other equity interest or voting interests in, CDnow the Company or any CDnow Subsidiary of its Subsidiaries, or any Voting CDnow Debt"phantom stock" right, (ii) obligating CDnow stock appreciation right or other similar right with respect to the Company or any CDnow Subsidiary of its Subsidiaries, or obligating the Company or any of its Subsidiaries to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stock. There are not any outstanding contractual obligations of CDnow no Contracts obligating the Company or any CDnow Subsidiary of its Subsidiaries to (x) repurchase, redeem or otherwise acquire any shares of capital stock of CDnow of, or other equity or voting interests in, the Company or any CDnow Subsidiary. As of its Subsidiaries or (y) vote or dispose of any shares of the Effective Timecapital stock of, or other equity or voting interests in, any of its Subsidiaries. To the knowledge of the Company, as of the date of this Agreement, there are no irrevocable proxies and no voting agreements with respect to any shares of the capital stock or other voting securities of the Company or any of its Subsidiaries. Except as set forth in SECTION 3.01(c) OF THE COMPANY DISCLOSURE SCHEDULE, each CDnow Warrant willoutstanding share of capital stock of each Subsidiary of the Company is duly authorized, validly issued, fully paid and nonassessable, and each such share is owned by the Company or another Subsidiary of the Company free and clear of all liens, rights of first refusal or other contractual transfer restrictions, agreements and limitations on the Company's or any of its terms, provide the holder thereof with the right to receive the amount Subsidiaries' voting rights of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofany nature whatsoever.

Capital Structure. (i) The authorized capital stock of CDnow MSB consists of 200,000,000 of: (A) 4,000,000 shares of CDnow MSB Common Stock, without par value, and 50,000,000 ; and (B) 2,000,000 shares of preferred stock, without par value $.01 per share. (together with ii) As of the CDnow Common Stock, the "CDnow Capital Stock"). At the close date of business on July 9, 1999, this Agreement: (iA) 30,211,473 1,306,733 shares of CDnow MSB Common Stock were are issued and outstanding, all of which are validly issued, fully paid and nonassessable and were issued in full compliance with all applicable laws and not in violation of any preemptive rights; (iiB) no shares of CDnow MSB preferred stock are issued and outstanding; (C) 78,856 shares of MSB Common Stock were held by CDnow in its treasury and (iii) 1,511,934 additional shares of CDnow Common Stock were are reserved for issuance pursuant to the CDnow outstanding MSB Options; and (D) 324,248 shares of MSB Common Stock Plans are held in treasury by MSB or otherwise directly or indirectly owned by MSB. (as defined iii) Set forth in Section 8.04(d)). The CDnow MSB’s Disclosure Letter sets forth is a complete and accurate list of all CDnow Employee Stock Options (as defined in Section 8.04) outstanding at MSB Options, including the close names of business on July 12the optionees, 1999dates of grant, together with the number exercise prices, dates of vesting, dates of termination, shares of CDnow Common Stock subject to each grant and whether stock appreciation, limited or other similar rights were granted in connection with such CDnow Employee Stock Option and options. (iv) No bonds, debentures, notes or other indebtedness having the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list right to vote on any matters on which stockholders of all warrants to acquire shares of CDnow Common Stock MSB may vote are issued or outstanding. (the "CDnow Warrants"v) outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in this Section 3.2(c), as of the CDnow Disclosure Letterdate of this Agreement, at the close of business on July 12, 1999, (A) no shares of capital stock or other voting securities of CDnow were MSB are issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights. All and (B) neither MSB nor any of its Subsidiaries has or is bound by any outstanding shares of CDnow Capital Stock aresubscriptions, and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the PBCL, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise bound. There are not any bonds, debentures, notes or other indebtedness of CDnow having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow Common Stock may vote ("Voting CDnow Debt"). Except as set forth above or in the CDnow Disclosure Letter, there are not any options, warrants, calls, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements commitments or undertakings agreements of any kind to which CDnow character obligating MSB or any CDnow Subsidiary is a party or by which any of them is bound (i) obligating CDnow or any CDnow Subsidiary its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, any additional shares of capital stock of MSB or other equity interests in, obligating MSB or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary its Subsidiaries to issue, grant, extend or enter into any such option, warrant, call, right, convertible security, commitmentcommitment or agreement. As of the date hereof, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stock. There there are not any no outstanding contractual obligations of CDnow MSB or any CDnow Subsidiary of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow MSB or any CDnow Subsidiary. As of the Effective Time, each CDnow Warrant will, by its terms, provide the holder thereof with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofSubsidiaries.

Capital Structure. The (a) As of the Capitalization Date, the authorized capital stock of CDnow the Company consists of 200,000,000 Shares and 10,000,000 shares of CDnow Common Company Preferred Stock, without par value, and 50,000,000 shares . As of preferred stock, without par value (together with the CDnow Common Stock, the "CDnow Capital Stock"). At the close of business on July 9, 1999, Capitalization Date (i) 30,211,473 116,619,149 Shares were issued and outstanding (including 30,590 Company Restricted Shares), (ii) 41,587,480 Shares were issued and held by the Company in its treasury, (iii) no shares of CDnow Common Company Preferred Stock were issued and outstanding, (iiiv) 32,971,625 Shares were reserved for issuance, (v) no shares of CDnow Common Company Preferred Stock were reserved for issuance, (vi) 1,634,533 Shares were subject to outstanding Company RSUs and (vii) 739,564 Shares were subject to outstanding Company PSUs (assuming the achievement of the applicable performance goals at the target level). (b) Since the Capitalization Date and through the date of this Agreement, (i) no Shares or shares of Company Preferred Stock have been repurchased or redeemed or issued (other than with respect to the vesting or settlement of Company Equity Awards outstanding prior to the date of this Agreement and pursuant to the terms of the applicable Company Benefit Plan in effect on or prior to the date of this Agreement), and (ii) no Shares have been reserved for issuance and no Company Equity Awards have been granted, except pursuant to the terms of the applicable Company Benefit Plan in effect on the date of this Agreement or as otherwise expressly permitted by this Agreement. (c) Section 3.2(c) of the Company Disclosure Schedule sets forth, as of the date of this Agreement, an accurate and complete list of each Subsidiary of the Company together with (i) the jurisdiction of incorporation or organization of such Subsidiary, (ii) the type and percentage of ownership interest held by CDnow the Company, or one of its Subsidiaries, in its treasury such Subsidiary, and (iii) 1,511,934 additional shares of CDnow Common Stock were reserved for issuance pursuant to the CDnow Stock Plans extent applicable, the type of and percentage of interest held by any Person (as defined and the name of such other Person) other than the Company or any of its Subsidiaries, in Section 8.04(d))such Subsidiary. The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04) outstanding at the close of business on July 12, 1999Company and its Subsidiaries, together with the number Persons set forth in Section 3.2(c) of the Company Disclosure Schedule pursuant to clause (iii) of the preceding sentence, beneficially own all of the issued and outstanding shares of CDnow Common Stock subject to capital stock of, or other equity interests in, each Subsidiary of the Company, and all such CDnow Employee Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in the CDnow Disclosure Letter, at the close of business on July 12, 1999, no shares of capital stock or other voting equity securities of CDnow were issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights. All outstanding shares of CDnow Capital Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable non-assessable (to the extent such concepts are applicable) free and not subject to or issued in violation clear of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision Encumbrance other than Encumbrances of the PBCLtype described in clauses (m), (o)(ii) or (p) of the CDnow Charter, definition of Permitted Encumbrances. As of the CDnow By-laws or date of this Agreement neither the Company nor any Contract of its Subsidiaries beneficially own any equity securities in any Person that is not a Subsidiary of the Company. (as defined in Section 3.05d) to which CDnow is a party or otherwise bound. There are not Neither the Company nor any of its Subsidiaries have any outstanding bonds, debentures, notes or other indebtedness obligations the holders of CDnow having which have the right to vote (or convertible into, convert into or exchangeable for, exercise for securities having the right to vote) with the equityholders of the Company or any of its Subsidiaries on any matters on matter, other than the Company Exchangeable Notes to the extent they convert into Company Common Stock. (e) Except pursuant to the terms of the Company Exchangeable Notes or the rights under the ESPP (a true, correct and complete copy of which holders of CDnow Common Stock may vote ("Voting CDnow Debt"has been made available to Parent). Except as set forth above or in the CDnow Disclosure Letter, there are not any no preemptive or other outstanding rights, options, warrants, rights, convertible or exchangeable securities, "phantom" stock conversion rights, stock appreciation rights, stock-based performance unitsredemption rights, commitmentsrepurchase rights, Contracts, arrangements arrangements, calls, commitments or undertakings rights of any kind to which CDnow that obligate the Company or any CDnow Subsidiary of its Subsidiaries to issue or to sell any securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, valued by reference to, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries is a party or by which to any voting agreement with respect to the voting of any of them is bound the foregoing securities. (if) obligating CDnow or any CDnow Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow or any CDnow Subsidiary or any Voting CDnow Debt, (iiSection 3.2(f) obligating CDnow or any CDnow Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stock. There are not any outstanding contractual obligations of CDnow or any CDnow Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow or any CDnow Subsidiary. As of the Effective TimeCompany Disclosure Schedule sets forth an accurate and complete listing of all outstanding Company Equity Awards as of June 26, 2024, setting forth the number of Shares subject to each CDnow Warrant willCompany Equity Award, by its terms, provide the holder thereof with identification number, grant date and vesting schedule (including any acceleration terms) and whether the right to receive the amount Company Equity Award is a Specified Award as of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofJune 26, 2024.

Capital Structure. The authorized (a) Section 5.3(a)(i) of the Disclosure Schedules sets forth all of the authorized, issued and outstanding capital stock of CDnow consists of 200,000,000 shares of CDnow Common Stock, without par value, and 50,000,000 shares of preferred stock, without par value (together with membership interests or other equity interests of each SCAN Company that has any such equity interests outstanding. All of the CDnow Common Stock, the "CDnow Capital Stock"). At the close issued and outstanding equity of business on July 9, 1999, each such SCAN Company (i) 30,211,473 shares of CDnow Common Stock were issued is fully paid and outstandingnonassessable, (ii) no shares of CDnow Common Stock were held by CDnow in its treasury has been duly authorized and validly issued, (iii) 1,511,934 additional shares of CDnow Common Stock were reserved for issuance pursuant to the CDnow Stock Plans (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04) outstanding at the close of business on July 12, 1999, together with the number of shares of CDnow Common Stock subject to each such CDnow Employee Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in the CDnow Disclosure Letter, at the close of business on July 12, 1999, no shares of capital stock or other voting securities of CDnow were issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights. All outstanding shares of CDnow Capital Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable and has not subject to or been issued in violation of any Law, agreement (including the Governing Documents of any SCAN Company) or any preemptive rights, purchase option, call option, right of first refusal, preemptive right, subscription right refusal or any similar right under of any provision Person, (iv) except as set forth in Section 5.3(a)(ii) of the PBCLDisclosure Schedules, is owned free and clear of any restrictions on transfer (other than any restrictions under the CDnow CharterSecurities Act and state securities laws) and Encumbrances, and (v) was offered, sold, issued and delivered in compliance with applicable federal and state securities Laws. The record ownership of the CDnow By-laws or issued and outstanding equity of each SCAN Company that has any Contract (as defined such equity interests outstanding is set forth in Section 3.055.3(a)(i) to which CDnow is a party or otherwise bound. There are not of the Disclosure Schedules, including the terms of any bonds, debentures, notes or other indebtedness of CDnow having the right to vote restrictions on such outstanding equity. (or convertible into, or exchangeable for, securities having the right to voteb) on any matters on which holders of CDnow Common Stock may vote ("Voting CDnow Debt"). Except as set forth above in Section 5.3(a)(i) of the Disclosure Schedules, no SCAN Company has any other authorized, issued or outstanding: (i) capital stock, equity securities or securities containing any equity features (and no such capital stock, equity securities or securities containing any equity features are reserved for issuance or held in the CDnow Disclosure Lettertreasury), there are not any (ii) options, warrants, purchase rights, subscription rights, calls or other contracts relating to any equity interests of any SCAN Company, (iii) securities convertible into or exchangeable securitiesfor any equity interests of any SCAN Company, "phantom" (iv) phantom stock rights, stock appreciation rights, stockprofit participation rights, restricted stock awards, or other stock or equity-based performance unitsawards or rights relating to or valued by reference to the equity of any SCAN Company, commitments, Contracts, arrangements or undertakings (v) other commitments of any kind for the issuance of additional equity interests or options, warrants or other securities of any SCAN Company, (vi) outstanding obligations (contingent or otherwise) of any SCAN Company or any other Person to purchase, redeem or otherwise acquire any capital stock or other equity interests in any SCAN Company, to make any payments based on the market price or value of shares or other equity interests of any SCAN Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any other Person, or (vii) other equity securities or securities containing any equity features of any SCAN Company. (c) Except as set forth in Section 5.3(c) of the Disclosure Schedules, no SCAN Company has accrued, declared or paid any dividends or made any similar distributions with respect to any equity interests of such entity since December 31, 2021. No SCAN Company is subject to any obligation (contingent or otherwise) to pay any dividend or otherwise to make any distribution or payment to any current or former holder of any SCAN Company’s equity interests. (d) Except as set forth in Section 5.3(d) of the Disclosure Schedules, there are no registration rights agreements, equityholder agreements, voting trusts or proxies or other agreements or understandings to which CDnow any SCAN Company, any equityholder of any SCAN Company or any CDnow Subsidiary other Person is a party or by which it or any of them is bound (i) obligating CDnow relating to the voting, disposition, purchase or issuance of, or any CDnow Subsidiary to issueother rights with respect to, deliver any equity of any SCAN Company. (e) No SCAN Company has registered shares or sell, or cause to be issued, delivered or sold, additional shares of capital stock or any other equity interests inunder the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (collectively, the “Securities Act”), or any security convertible the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (collectively, the “Exchange Act”) or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person has registered itself under the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stock. There are not any outstanding contractual obligations of CDnow or any CDnow Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow or any CDnow Subsidiary. As of the Effective Time, each CDnow Warrant will, by its terms, provide the holder thereof with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofExchange Act.

Capital Structure. The (i) As of August 14, 2008, the authorized capital stock of CDnow the Company consists of 200,000,000 300,000,000 shares of CDnow Common Stock, without par valueof which 139,009,259 shares are outstanding, and 50,000,000 5,000,000 shares of $1.00 par value preferred stock, without par value (together with none of which are outstanding. All of the CDnow outstanding shares of Common StockStock have been duly authorized and are validly issued, fully paid and nonassessable. As of August 14, 2008, based on the "CDnow Capital Stock"). At assumptions set forth in Section 5.1(b)(i) of the close of business on July 9Company Disclosure Letter, 1999, other than (i) 30,211,473 9,616,270 shares of CDnow Common Stock were issued reserved for issuance under the Year 2000 UnionBanCal Corporation Management Stock Plan, as amended, and outstandingthe UnionBanCal Corporation Management Stock Plan, restated effective June 1, 1997 (the “Stock Plans”) and (ii) any dividend equivalents for the September 5, 2008 record date dividend, the Company has no shares of CDnow Common Stock were held by CDnow in its treasury and (iii) 1,511,934 additional shares of CDnow Common Stock were reserved for issuance pursuant to issuance. Each of the CDnow Stock Plans (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04) outstanding at the close of business on July 12, 1999, together with the number of shares of CDnow Common Stock subject to each such CDnow Employee Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in the CDnow Disclosure Letter, at the close of business on July 12, 1999, no shares of capital stock or other voting securities of CDnow were issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights. All outstanding shares each of CDnow Capital Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and not subject to owned by the Company or issued in violation by a direct or indirect wholly owned Subsidiary of the Company, free and clear of any purchase optionlien, call optioncharge, right pledge, restriction, security interest, claim or other encumbrance of first refusalany nature (each, a “Lien”). Except as set forth above, there are no preemptive rightor other outstanding rights, subscription right options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or other rights of any kind that obligate the Company or any similar right under of its Subsidiaries to issue or sell any provision shares of capital stock or other securities of the PBCL, the CDnow Charter, the CDnow By-laws Company or any Contract (as defined of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Upon any issuance of any shares of Common Stock in Section 3.05) to which CDnow is a party or otherwise boundaccordance with the terms of the Stock Plans, such shares will be duly authorized, validly issued, fully paid and nonassessable and free and clear of any Liens. There are The Company does not have outstanding any bonds, debentures, notes or other indebtedness obligations the holders of CDnow having which have the right to vote (or convertible into, into or exchangeable for, exercisable for securities having the right to vote) with the stockholders of the Company on any matters on which holders of CDnow Common Stock may vote ("Voting CDnow Debt"). Except as set forth above or in the CDnow Disclosure Letter, there are not any options, warrants, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which CDnow or any CDnow Subsidiary is a party or by which any of them is bound (i) obligating CDnow or any CDnow Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stock. There are not any outstanding contractual obligations of CDnow or any CDnow Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow or any CDnow Subsidiary. As of the Effective Time, each CDnow Warrant will, by its terms, provide the holder thereof with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofmatter.

Capital Structure. The authorized capital stock of CDnow the Company consists of 200,000,000 205,000,000 shares of CDnow Company Common Stock, without par value, Stock and 50,000,000 5,000,000 shares of preferred stock, without par value (together with $0.001 per share. As of the CDnow Common Stock, the "CDnow Capital Stock"). At the close of business on July 9, 1999date hereof, (ia) 30,211,473 41,887,260 shares of CDnow Company Common Stock were are issued and outstanding, none of which are subject to stock repurchase rights pursuant to the Option Plans, (iib) no shares of CDnow Company Common Stock were are held by CDnow the Company in its treasury and treasury, (iiic) 1,511,934 additional 8,995,583 shares of CDnow Company Common Stock were are subject to outstanding Options, (d) 858,420 shares of Company Common Stock are reserved for issuance pursuant to the CDnow ESPP, (e) 13,045,592 shares of Company Common Stock are reserved for issuance pursuant to the Option Plans and (as defined f) 200,000 shares of the Company's Series A Cumulative Participating Preferred Stock are reserved for issuance in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04) outstanding at the close of business on July 12, 1999, together connection with the number of shares of CDnow Common Stock subject to each such CDnow Employee Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereofRights Agreement. Except as set forth above or in above, as of the CDnow Disclosure Letter, at the close of business on July 12, 1999date hereof, no shares of capital stock or other voting securities of CDnow were the Company are issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights. All outstanding shares of CDnow Capital Stock capital stock of the Company are, and all such shares that which may be issued prior pursuant to the Effective Time will Option Plans and the ESPP shall be when issuedissued in accordance with the terms thereof, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the PBCL, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise boundrights. There are not any no bonds, debentures, notes or other indebtedness of CDnow the Company or any Company Subsidiaries having the right to vote (or convertible into, or exchangeable for, into securities having the right to vote) on any matters on which holders stockholders of CDnow Common Stock the Company may vote ("Voting CDnow Debt"). Except as set forth above or as set forth in Section 4.3 of the CDnow Company Disclosure LetterSchedule, there are not any no securities, options, warrants, rightscalls, convertible or exchangeable securities, "phantom" stock conversion rights, stock appreciation rights, stock-based performance unitsredemption rights, repurchase rights, preemptive rights, subscriptions or other rights, commitments, Contractsagreements, arrangements or undertakings of any kind to which CDnow the Company or any CDnow Company Subsidiary is a party party, or by which any of them either is bound (i) bound, obligating CDnow the Company or any CDnow Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, securities or assets of the Company or any security convertible Company Subsidiary or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow obligating the Company or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Company Subsidiary to issue, grant, extend or enter into any such security, option, warrant, call, conversion right, securitystock appreciation right, redemption right, repurchase right, preemptive right, subscription or other right, commitment, Contractagreement, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stockundertaking. There are not any no outstanding contractual obligations of CDnow or any CDnow Subsidiary the Company to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow or any CDnow Subsidiary. As of the Effective Time, each CDnow Warrant will, by its terms, provide the holder thereof with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofCompany.

Capital Structure. (a) The authorized capital stock of CDnow the Company consists of 200,000,000 shares of CDnow Company Common Stock, without par value, value $0.001 per share and 50,000,000 20,000,000 shares of preferred stock, without par value $0.001 per share (together with the CDnow Common “Company Preferred Stock, the "CDnow Capital Stock"”). At the close of business on July 9May 27, 19992016 (the “Measurement Date”), (i) 30,211,473 42,871,191 shares of CDnow Company Common Stock were issued and outstanding, (ii) no shares of CDnow Company Common Stock were held by CDnow the Company in its treasury and treasury, (iii) 1,511,934 no Company Common Stock was owned by any Company Subsidiary, (iv) 5,395,386 shares of Company Common Stock were subject to outstanding Company Stock Options with a weighted average exercise price of $2.47 per share, (v) no shares of Company Common Stock were subject to outstanding rights under the Company ESPP, (vi) no additional shares of CDnow Company Common Stock were reserved for issuance pursuant to the CDnow Company Stock Plans Plans, (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04vii) outstanding at the close of business on July 12, 1999, together with the number of 2,970,524 shares of CDnow Company Common Stock subject to each such CDnow Employee Stock Option and were issuable upon exercise of the Company Warrants with a weighted average exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire $3.69 per share, and (viii) no shares of CDnow Common Company Preferred Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereofwere issued or outstanding. Except as set forth above or in the CDnow Disclosure Letterabove, at the close of business on July 12, 1999the Measurement Date, no shares of capital stock or other voting securities of CDnow the Company were issued, reserved for issuance or outstanding. There are From the Measurement Date to the date of this Agreement, there have been no outstanding CDnow issuances by the Company of shares of capital stock appreciation rights. of the Company or options, warrants, convertible or exchangeable securities, stock-based incentive units or other rights to acquire shares of capital stock of the Company or other rights that give the holder thereof any economic interest of a nature accruing to the holders of Company Common Stock, other than the issuance of Company Common Stock upon the exercise of Company Stock Options and Company Warrants. (b) All outstanding shares of CDnow Capital Company Common Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision rights. (c) As of the PBCLdate of this Agreement, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise bound. There there are not any no bonds, debentures, notes or other indebtedness of CDnow the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow Company Common Stock may vote by virtue of their ownership thereof ("“Voting CDnow Company Debt"”). . (d) Except as set forth above or in above, as of the CDnow Disclosure Letterdate of this Agreement, there are not any no options, warrants, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements incentive units or undertakings of any kind other rights or Contracts to which CDnow or any CDnow Subsidiary the Company is a party or by which any of them the Company is bound (i) obligating CDnow or any CDnow Subsidiary the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests inof, or any security convertible or exercisable exchangeable for or exchangeable into any shares of capital stock of or other equity interest inof, CDnow or any CDnow Subsidiary the Company or any Voting CDnow Debt, Company Debt (ii) obligating CDnow or any CDnow Subsidiary the Company to issue, grant, extend grant or enter into any such option, warrant, call, right, security, commitmentunit, Contract, arrangement right or undertaking Contract or (iii) that give any person Person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights interest of a nature accruing to the holders of CDnow Capital StockCompany Common Stock by virtue of their ownership thereof. There As of the date of this Agreement, there are not any no outstanding contractual obligations of CDnow or any CDnow Subsidiary the Company to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow the Company or any CDnow Subsidiary. As options, warrants, convertible or exchangeable securities, stock-based incentive units or other rights to acquire shares of capital stock of the Effective TimeCompany, each CDnow Warrant will, by its terms, provide the holder thereof except for (A) acquisitions of shares of Company Common Stock in connection with the right surrender of shares of Company Common Stock by holders of Company Stock Options in order to receive pay the amount exercise price of Merger Consideration Company Stock Options, (B) the withholding of shares of Company Common Stock to satisfy tax obligations with respect to awards granted pursuant to the Company Stock Plans and (C) the acquisition by the Company of Company Stock Options in connection with the forfeiture of such holder would have received awards. (e) All Company Stock Options are (i) evidenced by written award agreements, in each case substantially in the Merger had forms that have been made available to Parent, except that such CDnow Warrant been exercised immediately prior agreements differ from such forms and from one another with respect to the Effective Time number of Company Stock Options or shares of Company Common Stock covered thereby, the exercise price (if applicable), exercise period, vesting schedule and no expiration date applicable thereto and other considerationsimilar terms and (ii) upon were granted with an exercise thereofprice at least equal to the fair market value of a share of Company Common Stock on the applicable date of grant (as determined pursuant to Section 409A of the Code).

Capital Structure. (a) The authorized capital stock of CDnow the Company consists of 200,000,000 750,000,000 shares of CDnow Company Common Stock, without par value, value $0.01 per share and 50,000,000 shares of preferred stock, without par value $0.01 per share (together with the CDnow Common “Company Preferred Stock, the "CDnow Capital Stock"”). At the close of business on July 9April 28, 19992017 (the “Measurement Date”), (i) 30,211,473 131,694,581 shares of CDnow Company Common Stock were issued and outstanding, (ii) no shares of CDnow Company Common Stock were held by CDnow the Company in its treasury and treasury, (iii) 1,511,934 no Company Common Stock was owned by any Company Subsidiary, (iv) 7,347,874 shares of Company Common Stock were subject to outstanding Company Stock Options with a weighted average exercise price of $24.06 per share, (v) 3,670,235 additional shares of CDnow Company Common Stock were reserved for issuance pursuant to the CDnow Company Stock Plans Plan, (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04vi) outstanding at the close of business on July 12, 1999, together with the number of 310,190 shares of CDnow Company Common Stock were subject to each such CDnow Employee Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire outstanding Company RSUs, (vii) no shares of CDnow Common Restricted Stock were outstanding under the Company Stock Plan and (the "CDnow Warrants"viii) outstanding at the close of business on July 12, 1999 together with the number of no shares of CDnow Common Company Preferred Stock subject to each such warrant and the exercise price thereofwere issued or outstanding. Except as set forth above or in the CDnow Disclosure Letterabove, at the close of business on July 12, 1999the Measurement Date, no shares of capital stock or other voting securities of CDnow the Company were issued, reserved for issuance or outstanding. There are From the Measurement Date to the date of this Agreement, there have been no outstanding CDnow issuances by the Company of shares of capital stock appreciation rights. of the Company or options, warrants, convertible or exchangeable securities, stock-based performance units or other rights to acquire shares of capital stock of the Company or other rights that give the holder thereof any economic interest of a nature accruing to the holders of Company Common Stock, other than the issuance of Company Common Stock upon the exercise of Company Stock Options and the issuance of Company Common Stock upon vesting of Company RSUs. (b) All outstanding shares of CDnow Capital Company Common Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision rights. (c) As of the PBCLdate of this Agreement, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise bound. There there are not any no bonds, debentures, notes or other indebtedness of CDnow the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow Company Common Stock may vote by virtue of their ownership thereof ("“Voting CDnow Company Debt"”). Neither the Company nor any Company Subsidiary is party to any Contracts with respect to the voting (including voting trusts or proxies) of any shares of Company Common Stock or other voting securities or equity interests of the Company. (d) Except as set forth above or in above, as of the CDnow Disclosure Letterdate of this Agreement, there are not any no options, warrants, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements units or undertakings of any kind other rights or Contracts to which CDnow or any CDnow Subsidiary the Company is a party or by which any of them the Company is bound (i) obligating CDnow or any CDnow Subsidiary the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests inof, or any security convertible or exercisable exchangeable for or exchangeable into any shares of capital stock of or other equity interest inof, CDnow or any CDnow Subsidiary the Company or any Voting CDnow Company Debt, (ii) obligating CDnow or any CDnow Subsidiary the Company to issue, grant, extend grant or enter into any such option, warrant, call, right, security, commitmentunit, Contract, arrangement right or undertaking Contract or (iii) that give any person Person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights interest of a nature accruing to the holders of CDnow Capital StockCompany Common Stock by virtue of their ownership thereof. There As of the date of this Agreement, there are not any no outstanding contractual obligations of CDnow or any CDnow Subsidiary the Company to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow the Company or any CDnow Subsidiary. As options, warrants, convertible or exchangeable securities, stock-based performance units or other rights to acquire shares of capital stock of the Effective TimeCompany, except for (A) acquisitions of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay the exercise price of Company Stock Options, (B) the withholding of shares of Company Common Stock to satisfy tax obligations with respect to awards granted pursuant to the Company Stock Plan, (C) the acquisition by the Company of Company Stock Options in connection with the forfeiture of such awards and (D) the acquisition by the Company of Company RSUs in connection with the forfeiture of such awards. (e) All Company Stock Options, Restricted Stock and Company RSUs are evidenced by written award agreements, in each CDnow Warrant willcase substantially in the forms that have been made available to Parent, by its except that such agreements differ from such forms and from one another with respect to the number of Company Stock Options or shares of Company Common Stock covered thereby, the exercise price (if applicable), the vesting schedule, the grant date and expiration date applicable thereto and other similar terms. (f) Section 2.02(f) of the Company Disclosure Letter sets forth, provide as of the Measurement Date, a complete and correct list of all outstanding Company Stock Options, Company RSUs, Restricted Stock, the number of shares of Company Common Stock subject to each such award, the grant date, to the extent applicable, the exercise price per share, vesting schedule and the name of the holder thereof with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereof.

Capital Structure. (i) The authorized capital stock of CDnow the Company consists of 200,000,000 35,000,000 shares of CDnow Company Common Stock, without $0.01 par valuevalue per share, and 50,000,000 1,000,000 shares of preferred stock, without $0.01 par value per share. (together with ii) As of the CDnow Common Stock, the "CDnow Capital Stock"). At the close date of business on July 9, 1999this Agreement, (iA) 30,211,473 12,033,611 shares of CDnow Company Common Stock were are issued and outstanding, all of which are validly issued, fully paid and nonassessable and were issued in full compliance with all applicable laws and not in violation of any preemptive rights; (iiB) no shares of CDnow Company Preferred Stock are issued and outstanding; (C) 526,414 shares of Company Common Stock were held by CDnow in its treasury and (iii) 1,511,934 additional shares of CDnow Common Stock were are reserved for issuance pursuant to outstanding Company Stock Options (including exercisable and unexercisable Company Stock Options) and future awards of Company Common Stock; and (D) there are no outstanding restricted stock awards granted pursuant to the CDnow Stock Plans Company Equity Plans. (as defined iii) Set forth in Section 8.04(d)). The CDnow the Company’s Disclosure Letter sets forth is a complete and accurate list of all CDnow Employee outstanding Company Stock Options (as defined in Section 8.04) outstanding at Options, including the close names of business on July 12the optionees, 1999dates of grant, together with the number exercise prices, dates of vesting, dates of termination, shares of CDnow Common Stock subject to each grant and whether stock appreciation, limited or other similar rights were granted in connection with such CDnow Employee Stock Option and options. (iv) No bonds, debentures, notes or other indebtedness having the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list right to vote on any matters on which stockholders of all warrants to acquire shares of CDnow Common Stock the Company may vote are issued or outstanding. (the "CDnow Warrants"v) outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in this Section 3.2(c), as of the CDnow Disclosure Letterdate of this Agreement, at the close of business on July 12, 1999, (A) no shares of capital stock or other voting securities of CDnow were the Company are issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights. All outstanding shares of CDnow Capital Stock are, and all such shares that may be issued prior to (B) other than Company Stock Options, neither the Effective Time will be when issuedCompany nor any of its Subsidiaries has or is bound by any outstanding subscriptions, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the PBCL, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise bound. There are not any bonds, debentures, notes or other indebtedness of CDnow having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow Common Stock may vote ("Voting CDnow Debt"). Except as set forth above or in the CDnow Disclosure Letter, there are not any options, warrants, calls, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements commitments or undertakings agreements of any kind to which CDnow character obligating the Company or any CDnow Subsidiary is a party or by which any of them is bound (i) obligating CDnow or any CDnow Subsidiary its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, any additional shares of capital stock of the Company (including any rights plan or other equity interests in, agreement) or obligating the Company or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary its Subsidiaries to issue, grant, extend or enter into any such option, warrant, call, right, convertible security, commitmentcommitment or agreement. Neither the Company nor any Subsidiary of the Company has or is bound by any rights of any character relating to the purchase, Contractsale or issuance or voting of, arrangement or undertaking right to receive dividends or (iii) that give other distributions on shares of Company Common Stock, or any person other security of the Company or a Subsidiary of the Company or any securities representing the right to vote, purchase or otherwise receive any economic benefit shares of Company Common Stock or right any other security of the Company or a Subsidiary of the Company. Other than as stated herein, there are no outstanding securities or instruments that contain any redemption or similar to or derived from the economic benefits provisions, and rights accruing to holders of CDnow Capital Stock. There there are not any no outstanding contractual obligations of CDnow the Company or any CDnow Subsidiary of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow the Company or any CDnow Subsidiary. As of its Subsidiaries. (vi) Other than the Voting Agreements and as set forth in the Company’s Disclosure Letter, there are no voting trusts, shareholder agreements, proxies or similar agreements to which the Company or any of its Subsidiaries is a party in effect with respect to the voting or transfer of the Effective Time, each CDnow Warrant will, by its terms, provide Company Common Stock or other voting securities or equity interests of the holder thereof with the right to receive the amount of Merger Consideration such holder would Company or granting any shareholder or other Person any registration rights. The Company does not have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofeffect a “poison pill” or similar shareholder rights plan.

Capital Structure. The authorized capital stock of CDnow the Company consists of 200,000,000 150,000,000 shares of CDnow Company Common Stock, without par valuevalue $.01 per share. As of May 15, and 50,000,000 2002: (i) 22,932,876 shares of preferred stock, without par value Company Common Stock were issued and outstanding and (together with ii) no shares of Company Common Stock were held by the CDnow Common Stock, Company in its treasury or by the "CDnow Capital Stock")Company Subsidiary. At the close of business on July 9May 15, 1999, (i) 30,211,473 2002: 8,900,000 shares of CDnow Common Stock were issued and outstanding, (ii) no shares of CDnow Common Stock were held by CDnow in its treasury and (iii) 1,511,934 additional shares of CDnow Company Common Stock were reserved for issuance in the aggregate pursuant to the CDnow Official Payments Corporation 1999 Stock Plans Incentive Plan and the Official Payments Corporation 2000 Stock Incentive Plan (as defined in collectively, the "Company Stock Option Plans"), of which 5,765,172 shares were subject to outstanding Company Stock Options. Section 8.04(d)). The CDnow 3.01(c) of the Company Disclosure Letter Schedule sets forth a true, correct and complete list list, as of all CDnow Employee May 15, 2002, of each outstanding option to purchase shares of Company Common Stock Options issued under any Company Stock Option Plan (as defined in Section 8.04) outstanding at collectively, the close "Company Stock Options"), including the holder, date of business on July 12grant, 1999, together with the exercise price and number of shares of CDnow Company Common Stock subject to each such CDnow Employee Stock Option thereto and whether the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant option is vested and the exercise price thereof. Except as set forth above or in the CDnow Disclosure Letter, at the close of business on July 12, 1999, no shares of capital stock or other voting securities of CDnow were issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rightsexercisable. All outstanding shares of CDnow Capital Stock capital stock of the Company are, and all such shares that which may be issued prior to the Effective Time will be be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the PBCL, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise bound. There are not any bonds, debentures, notes or other indebtedness of CDnow having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow Common Stock may vote ("Voting CDnow Debt")rights. Except as set forth above in this Section 3.01(c), except for changes since May 15, 2002 resulting from the issuance of shares of Company Common Stock or in Company Stock Options pursuant to the CDnow Disclosure LetterCompany Stock Option Plans as permitted by Section 4.01(b), (x) there are not issued, reserved for issuance or outstanding (A) any optionsshares of capital stock or other voting securities of the Company, (B) any securities of the Company convertible into or exchangeable or exercisable for shares of capital stock or voting securities of the Company and (C) any warrants, rightscalls, or options to acquire from the Company, or obligation of the Company to issue, any capital stock, voting securities or securities convertible into or exchangeable securitiesor exercisable for capital stock or voting securities of the Company, "phantom" stock rightsand (y) there are no outstanding obligations of the Company to repurchase, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements redeem or undertakings of otherwise acquire any kind to which CDnow such securities or any CDnow Subsidiary is a party or by which any of them is bound (i) obligating CDnow or any CDnow Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares any such securities. The Company is not a party to any voting agreement with respect to the voting of capital stock any such securities. Other than the Company Subsidiary, the Company does not directly or indirectly beneficially own any securities or other equity beneficial ownership interests in, or in any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stock. There are not any outstanding contractual obligations of CDnow or any CDnow Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow or any CDnow Subsidiary. As of the Effective Time, each CDnow Warrant will, by its terms, provide the holder thereof with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofentity.

Capital Structure. The authorized capital stock of CDnow IRT consists of 200,000,000 150,000,000 shares of CDnow IRT Common Stock, without par valueof which 34,197,736 shares were outstanding as of September 30, 2002, and 50,000,000 10,000,000 shares of preferred stock, without $1.00 par value (together with the CDnow Common Stock, the "CDnow Capital IRT Preferred Stock"). At the close , none of business on July 9, 1999, (i) 30,211,473 shares of CDnow Common Stock were issued and outstanding, (ii) no shares of CDnow Common Stock were held by CDnow in its treasury and (iii) 1,511,934 additional shares of CDnow Common Stock were reserved for issuance pursuant to the CDnow Stock Plans (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04) outstanding at the close of business on July 12, 1999, together with the number of shares of CDnow Common Stock subject to each such CDnow Employee Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in the CDnow Disclosure Letter, at the close of business on July 12, 1999, no shares of capital stock or other voting securities of CDnow were issued, reserved for issuance or which are outstanding. There are no outstanding CDnow stock appreciation rights. All of the outstanding shares of CDnow Capital IRT Common Stock are, have been duly authorized and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, are validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the PBCL, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise bound. There are not any bonds, debentures, notes or other indebtedness of CDnow having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow Common Stock may vote ("Voting CDnow Debt")nonassessable. Except as set forth above or in the CDnow Disclosure Letter, there are not any options, warrants, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which CDnow or any CDnow Subsidiary is a party or by which any of them is bound for (i) obligating CDnow or any CDnow Subsidiary IRT Options to issue, deliver or sell, or cause to be issued, delivered or sold, additional purchase an aggregate of 928,088 shares of capital stock or other equity interests inIRT Common Stock granted pursuant to the IRT Plans, or any security convertible or exercisable for or exchangeable into any capital stock and outstanding as of or other equity interest inthe date hereof, CDnow or any CDnow Subsidiary or any Voting CDnow Debt, and (ii) obligating CDnow or any CDnow Subsidiary the right of the limited partners of IRT Partners, L.P., a Georgia limited partnership ("IRT Partners"), to issueconvert the limited partnership units ("IRT OPUs") of IRT Partners, grantupon the terms and subject to the satisfaction of certain conditions contained in the Limited Partnership Agreement of IRT Partners dated August 12, extend or enter 1998 (the "IRT Partners Agreement"), into any such optionan aggregate of 816,000 shares of IRT Common Stock as of the date hereof, no arrangement, subscription, warrant, call, rightcommitment, agreement, scrip, understanding, option, convertible security, stock appreciation (or depreciation) or other right (contingent or otherwise) to purchase or acquire, or any securities convertible into or exchangeable or exercisable for, any shares of any class or series of capital stock ("Equity Right") of IRT or any of its Subsidiaries is authorized or outstanding as of the date of this Agreement and there is not outstanding or in effect as of the date of this Agreement any commitment, Contractagreement, plan, arrangement or undertaking understanding (whether oral or (iiiwritten) that give of IRT or any person the right of its Subsidiaries to receive issue any economic benefit such Equity Rights or right similar to or derived from the economic benefits and rights accruing distribute to holders of CDnow Capital Stockany class or series of its capital stock any evidences of indebtedness or assets. There are not Neither IRT nor any outstanding contractual obligations of CDnow its Subsidiaries has any obligation (contingent or any CDnow Subsidiary otherwise) to repurchasepurchase, redeem or otherwise acquire any shares of its capital stock of CDnow or any CDnow Subsidiaryinterest therein or to pay any dividend or make any other distribution in respect thereof (other than as required by REITs generally under the Code or as set forth on Schedule 3.1(b) of the IRT Disclosure Memorandum). As of the Effective Timedate of this Agreement, the authorized capital stock, the authorized LLC Interests, the authorized Partnership Interests and the authorized Other Investment Interests, as applicable, of each CDnow Warrant willSubsidiary of IRT consist in their entirety of the shares, the LLC Interests, the Partnership Interests and the Other Investment Interests described on Schedule 3.1(a)(ii) of the IRT Disclosure Memorandum, all of which shares and interests are issued and outstanding and owned beneficially and of record by its terms, provide IRT or through wholly owned Subsidiaries of IRT. Schedule 3.1(b) of the holder IRT Disclosure Memorandum lists all Restrictive Agreements affecting shares of IRT Common Stock or the holders thereof with the right known to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofIRT.

Capital Structure. The (i) As of the date of this Agreement, the authorized capital stock of CDnow the Company consists of (A) 200,000,000 shares of CDnow Company Common Stock, without par valueof which not more than 46,591,000 shares plus no more than 600,000 shares issued pursuant to the Company's Employee Stock Purchase Plan since December 31, 1998 are outstanding, and 50,000,000 (B) 2,000,000 shares of preferred stock, without par value $.01 per share, of which no shares are outstanding. All issued and outstanding shares of the capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, and no class of capital stock is entitled to preemptive rights. As of the date of this Agreement, there are no outstanding options, warrants or other rights to acquire capital stock from the Company other than (together with C) rights issued pursuant to the CDnow Common StockRights Agreement dated as of November 7, 1989 between the Company and BankBoston, N.A., as amended and restated as of August 12, 1992, amended as of August 24, 1992, and amended and restated as of March 7, 1999 (as amended, the "CDnow Capital StockCOMPANY RIGHTS AGREEMENT"). At ) and (D) options representing in the close of business on July 9, 1999, (i) 30,211,473 aggregate the right to purchase not more than 11,293,000 shares of CDnow Company Common Stock were issued and outstanding, under the Company Equity Plans. (ii) no shares All of CDnow Common Stock were held by CDnow in its treasury the issued and (iii) 1,511,934 additional shares of CDnow Common Stock were reserved for issuance pursuant to the CDnow Stock Plans (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04) outstanding at the close of business on July 12, 1999, together with the number of shares of CDnow Common Stock subject to each such CDnow Employee Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in the CDnow Disclosure Letter, at the close of business on July 12, 1999, no shares of capital stock or other voting securities of CDnow were issued, reserved for issuance or outstanding. There the Company's Subsidiaries are no outstanding CDnow stock appreciation rights. All outstanding shares of CDnow Capital Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation are owned by the Company, free and clear of any purchase optionliens, call optionpledges, right of first refusalsecurity interests, claims, encumbrances, restrictions, preemptive right, subscription right rights or any similar right under other claims of any provision third party ("LIENS"). (iii) As of the PBCLdate of this Agreement, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise bound. There are not any no bonds, debentures, notes or other indebtedness of CDnow the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow Common Stock stockholders may vote ("Voting CDnow DebtCOMPANY VOTING DEBT"). ) are issued or outstanding. (iv) Except as otherwise set forth above or in this Section 3.1(b), as of the CDnow Disclosure Letterdate of this Agreement, there are not any no securities, options, warrants, calls, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contractsagreements, arrangements or undertakings of any kind to which CDnow the Company or any CDnow Subsidiary its Subsidiaries is a party or by which any of them is bound (i) obligating CDnow the Company or any CDnow a Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, voting securities of the Company or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow or any CDnow such Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow the Company or any CDnow such Subsidiary to issue, grant, extend or enter into any such security, option, warrant, call, right, security, commitment, Contractagreement, arrangement or undertaking or (iii) that give any person undertaking. As of the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders date of CDnow Capital Stock. There this Agreement, there are not any no outstanding contractual obligations of CDnow the Company or any CDnow Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow the Company or any CDnow such Subsidiary. As Immediately prior to the consummation of the Offer and Merger, no shares of Company Common Stock or other securities of the Company will be issuable pursuant to the Company Rights Agreement, and, immediately after the Effective Time, each CDnow Warrant the Surviving Corporation will, assuming the execution of releases by its termsholders of outstanding Company stock options as described in Section 5.11, provide have no obligation to issue, transfer or sell any shares of common stock of the holder thereof with the right Surviving Corporation pursuant to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (any compensation and no other consideration) upon exercise thereofbenefit plan.

Capital Structure. The (i) As of the date hereof, the authorized capital stock of CDnow consists the Company consisted of 200,000,000 55,000,000 shares of CDnow Company Common Stock, without par value, of which 5,739,378 shares were outstanding and 50,000,000 445,882 shares were held in the treasury of preferred stock, without par value (together with the CDnow Common Stock, the "CDnow Capital Stock")Company. At the close of business on July 9, 1999, (i) 30,211,473 shares of CDnow Common Stock were All issued and outstanding, (ii) no shares of CDnow Common Stock were held by CDnow in its treasury and (iii) 1,511,934 additional shares of CDnow Common Stock were reserved for issuance pursuant to the CDnow Stock Plans (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04) outstanding at the close of business on July 12, 1999, together with the number of shares of CDnow Common Stock subject to each such CDnow Employee Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in the CDnow Disclosure Letter, at the close of business on July 12, 1999, no shares of capital stock or other voting securities of CDnow were issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights. All outstanding shares of CDnow Capital Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation free of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision rights. Section 3.2(b)(i)(1) of the PBCLCompany Disclosure Letter contains a correct and complete list as of the date hereof of the number of outstanding Company Stock Options, the CDnow Charter, exercise price of all Company Stock Options and the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise bound. There are not any bonds, debentures, notes or other indebtedness number of CDnow having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders shares of CDnow Company Common Stock may vote issuable at such exercise price. Section 3.2(b)(i)(2) of the Company Disclosure Letter contains a correct and complete list as of the date hereof of the number of restricted stock units issued under the Directors Deferred Plan. ("Voting CDnow Debt"). ii) Except as otherwise set forth above or in the CDnow Disclosure Letterthis Section 3.2(b), there are not any no securities, options, warrants, calls, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contractsagreements, arrangements or undertakings of any kind outstanding or to which CDnow the Company or any CDnow Subsidiary of its Subsidiaries is a party or by which any of them is bound (i) obligating CDnow the Company or any CDnow Subsidiary of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, voting securities of the Company or any security convertible of its Subsidiaries or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow obligating the Company or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary of its Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, security, commitment, Contractagreement, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stockundertaking. There are not any no outstanding contractual obligations of CDnow the Company or any CDnow Subsidiary of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow the Company or any CDnow Subsidiaryof its Subsidiaries. As There are no outstanding obligations of the Effective TimeCompany or any of its Subsidiaries to provide funds or make any investment in any of its Subsidiaries or any other entity, each CDnow Warrant will, by nor has the Company or any of its terms, provide the holder thereof with the right Subsidiaries granted or agreed to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior grant to the Effective Time (and no other consideration) upon exercise thereofany Person any stock appreciation rights or similar equity based rights.

Capital Structure. (i) The authorized capital stock of CDnow Parent consists of 200,000,000 5,000,000,000 shares of CDnow Parent Common Stock, without par value, and 50,000,000 of which 2,331,018,041 shares were outstanding as of preferred stock, without par value (together with the CDnow Common Stock, the "CDnow Capital Stock"). At the close of business on July 9March 31, 19992001, (i) 30,211,473 and 6,000,000 shares of CDnow Serial Preferred Stock, par value $5.00 per share (the "Parent Preferred Stock"), none of which was outstanding as of the close of business on March 31, 2001. All of the outstanding shares of Parent Common Stock were issued are duly authorized, validly issued, fully paid and outstandingnonassessable. As of March 31, (ii) no 2001, 144,645,878 shares of CDnow Parent Common Stock were held in treasury by CDnow in its treasury and Parent or Parent Subsidiaries. As of the date hereof, Parent has no commitments (iiiincluding contingent or conditional commitments) 1,511,934 additional to issue or deliver shares of CDnow Parent Common Stock or Parent Preferred Stock except that, as of March 31, 2001, there were outstanding options or other rights to purchase or receive up to 39,248,712 shares of Parent Common Stock granted pursuant to compensation, incentive and benefit plans, programs, agreements and arrangements ("Parent Plans"), and up to approximately 52,813,243 shares of Parent Common Stock were reserved for issuance or held for delivery pursuant to the CDnow Stock Parent Plans (as defined in Section 8.04(dincluding pursuant to such outstanding options)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options . (as defined in Section 8.04ii) outstanding at the close of business on July 12, 1999, together with the number of shares of CDnow Common Stock subject to each such CDnow Employee Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above and for changes since March 31, 2001 resulting from the exercise of stock options or in other rights outstanding on such date, as of the CDnow Disclosure Letter, at the close of business on July 12, 1999, date hereof (i) there are no shares of capital stock or other voting securities of CDnow were issuedParent authorized, reserved reserved, issued or outstanding, (ii) neither Parent nor any of its Subsidiaries is a party to any agreement creating preemptive or other outstanding rights, subscriptions, options, warrants, stock appreciation rights, redemption rights, repurchase rights, convertible securities or other agreements, arrangements or commitments of any character relating to, or the value of which is determined by reference to, the issued or unissued share capital or other ownership interest of Parent, and (iii) neither Parent nor any of its Subsidiaries is a party to any agreement creating any other securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for issuance or acquire, any equity securities of Parent, and no equity securities or obligations evidencing such rights are authorized, issued or outstanding. There are no Neither Parent nor any of its Subsidiaries has any outstanding CDnow stock appreciation rights. All outstanding shares of CDnow Capital Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the PBCL, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise bound. There are not any bonds, debentures, notes or other indebtedness obligations the holders of CDnow having which have the right to vote (or convertible into, into or exchangeable for, exercisable for securities having the right to vote) with the shareholders of Parent on any matters on which holders of CDnow Common Stock may vote ("Voting CDnow Debt"). Except as set forth above or in the CDnow Disclosure Letter, there are not any options, warrants, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which CDnow or any CDnow Subsidiary is a party or by which any of them is bound (i) obligating CDnow or any CDnow Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stock. There are not any outstanding contractual obligations of CDnow or any CDnow Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow or any CDnow Subsidiary. As of the Effective Time, each CDnow Warrant will, by its terms, provide the holder thereof with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofmatter.

Capital Structure. (a) The authorized registered (authorized) share capital stock of CDnow the Company consists of 200,000,000 shares of CDnow Common Stock, without par value, and 50,000,000 shares of preferred stock, without par value (together with the CDnow Common Stock, the "CDnow Capital Stock")30,000,000 Company Shares. At the close of business on July 9June 23, 19992011, (i) 30,211,473 shares of CDnow Common Stock 17,194,812 Company Shares were issued and outstanding, including 1,959,093 Company Shares held by the Company in its treasury, and (ii) no shares of CDnow Common Stock were held by CDnow in its treasury and (iii) 1,511,934 additional shares of CDnow Common Stock 5,641,815 Company Shares were reserved for issuance pursuant to the CDnow Stock Plans (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list under Company Employee Plans, of all CDnow Employee Stock Options (as defined in Section 8.04) outstanding at the close of business on July 12, 1999, together with the number of shares of CDnow Common Stock which 1,653,790 were subject to each such CDnow Employee Stock Option outstanding options or the grant of rights to purchase Company Shares, 393,754 were restricted Company Shares and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof723,845 Company Shares were available for future option or restricted share grants. Except as set forth above or in the CDnow Disclosure Letterabove, at the close of business on July 12June 23, 19992011, no shares of capital stock or other voting securities of CDnow the Company were issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights. All outstanding shares of CDnow Capital Stock Company Shares are, and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the PBCLIsraeli Companies Law, the CDnow Charter, the CDnow By-laws Company Charter Documents or any Contract (as defined in Section 3.05) to which CDnow the Company is a party or otherwise bound. There are not any no bonds, debentures, notes or other indebtedness of CDnow the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow Common Stock Company Shares may vote ("“Voting CDnow Company Debt"”). Except as set forth above or in above, as of the CDnow Disclosure Letterdate of this Agreement, there are not any no options, warrants, rights, convertible or exchangeable securities, "“phantom" ” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which CDnow the Company or any CDnow Subsidiary of its Subsidiaries is a party or by which any of them is bound (i) obligating CDnow the Company or any CDnow Subsidiary of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow the Company or of any CDnow Subsidiary of its Subsidiaries or any Voting CDnow Debt, Company Debt or (ii) obligating CDnow the Company or any CDnow Subsidiary of its Subsidiaries to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person undertaking. As of the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders date of CDnow Capital Stock. There this Agreement, there are not any no outstanding contractual obligations of CDnow the Company or any CDnow Subsidiary of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow the Company or any CDnow Subsidiaryof its Subsidiaries. (b) The Company Disclosure Schedule sets forth the following information with respect to each Company Stock Option or restricted Company Share as of June 23, 2011: (i) the name of the grantee; (ii) the particular plan, if applicable, pursuant to which such award was granted, (iii) the number of Company Shares subject to such award; (iv) the exercise price, if any, of such award; (v) the date on which such award was granted; (vi) the applicable vesting schedule, including the vesting commencement date and any accelerated vesting provisions; and (vii) the date on which such award expires. As The Company has made available to Parent accurate and complete copies of all equity plans pursuant to which the Company has granted such awards that are currently outstanding and the form of all equity award agreements evidencing such awards. All Company Shares subject to issuance as aforesaid have been duly authorized and, upon issuance on the terms and conditions specified in the instrument pursuant to which they are issuable, will be validly issued, fully paid and nonassessable. Effective as of the Effective Time, each CDnow Warrant willoutstanding award of restricted Company Shares then outstanding shall become fully vested and all restrictions therein shall lapse. All outstanding Company Shares, by its termsall outstanding Company Stock Options, provide and all outstanding shares of capital stock of each Subsidiary of the holder thereof Company have been issued and granted (i) in compliance with the right to receive the amount of Merger Consideration such holder would have received all applicable securities laws and other applicable Laws and (ii) in material compliance with all applicable requirements set forth in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofCompany Employee Plans.

Capital Structure. The authorized capital stock of CDnow STH consists of 200,000,000 ten million (10,000,000) shares of CDnow STH Common Stock and one million (1,000,000) shares of Class A Preferred Stock, without par value, and 50,000,000 shares of preferred stock, without $1.00 par value per share (together with the CDnow Common Stock, the "CDnow Capital STH Preferred Stock"). At the close As of business on July 9March 31, 19991998, (ia) 30,211,473 there were 4,840,000 shares of CDnow STH Common Stock were issued and outstanding, and no shares of STH Preferred Stock are issued and outstanding, (iib) no shares of CDnow STH Common Stock or STH Preferred Stock were held by CDnow STH in its treasury treasury, and (iiic) 1,511,934 additional 139,200 shares of CDnow STH Common Stock were reserved for issuance pursuant to the CDnow Stock Plans (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04) outstanding at the close of business on July 12, 1999, together with the number of shares of CDnow Common Stock subject to each such CDnow Employee Stock Option and issuable upon the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock outstanding options (the "CDnow WarrantsSTH Options") under the STH Stock Option Plan. STH has no outstanding at bonds, debentures, notes or other obligations the close holders of business on July 12, 1999 together which have the right to vote (or which are convertible into or exercisable for securities having the right to vote) with the number stockholders of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in the CDnow Disclosure Letter, at the close of business STH on July 12, 1999, no shares of capital stock or other voting securities of CDnow were issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rightsany matter. All such issued and outstanding shares of CDnow Capital STH Common Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, are duly authorized, validly issued, fully paid and paid, nonassessable and free of preemptive rights. Except (i) for the STH Options and (ii) as provided on Schedule 5.3 hereto, there are not subject to at the date of this Agreement any existing options, warrants, calls, subscriptions, convertible securities, or issued in violation of any purchase optionother rights, call option, right of first refusal, preemptive right, subscription right agreements or commitments which obligate STH or any similar right under any provision of the PBCLSTH Subsidiaries to issue, the CDnow Charter, the CDnow By-laws transfer or sell any shares of capital stock of STH or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise boundof the STH Subsidiaries. There are not any no bonds, debentures, notes or other indebtedness of CDnow STH having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders stockholders of CDnow Common Stock STH may vote ("Voting CDnow Debt"). Except as set forth above or in the CDnow Disclosure Letter, there are not any options, warrants, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which CDnow or any CDnow Subsidiary is a party or by which any of them is bound (i) obligating CDnow or any CDnow Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stockvote. There are not any no outstanding contractual obligations of CDnow STH or any CDnow Subsidiary of the STH Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow STH or any CDnow Subsidiarycapital stock, voting securities or other securities or other ownership interests in any of the STH Subsidiaries or make any material investment (in the form of a loan, capital contribution or otherwise) in any person (other than one of the STH Subsidiaries). As of Except as provided in Section 4.1(d), after the Effective Time, each CDnow Warrant willPMCT will have no obligation to issue, by its terms, provide the holder thereof with the right transfer or sell any shares of capital stock or other equity interest of STH or PMCT pursuant to receive the amount of Merger Consideration such holder would have received any STH Benefit Plan (as defined in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofSection 5.12).

Capital Structure. The (a) As of May 23, 2000, the authorized capital stock of CDnow consists the Company consisted of 200,000,000 shares of CDnow Common Stock, without par value, and (A) 50,000,000 shares of preferred stockCompany Common Stock of which 18,175,585 shares were issued, without consisting of 17,671,246 shares outstanding and 504,339 shares held in the treasury of the Company and (B) 5,000,000 shares of Preferred Stock, par value (together with the CDnow Common $0.01 per share, of which 50,000 shares have been designated Junior Participating Preferred Stock, the "CDnow Capital Stock"). At the close of business on July 9, 1999, (i) 30,211,473 shares of CDnow Common Stock were issued Series A and outstanding, (ii) no shares of CDnow Common Stock were held by CDnow in its treasury and (iii) 1,511,934 additional shares of CDnow Common Stock were reserved for issuance upon exercise of the Rights. Since May 23, 2000 to the date of this Agreement, there have been no issuances of shares of the capital stock of the Company or any other securities of the Company other than issuances of shares (and accompanying Rights) pursuant to options or rights outstanding as of May 23, 2000 under the CDnow Stock Company's Benefit Plans (as defined in Section 8.04(d)below). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04) outstanding at the close of business on July 12, 1999, together with the number of shares of CDnow Common Stock subject to each such CDnow Employee Stock Option All issued and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in the CDnow Disclosure Letter, at the close of business on July 12, 1999, no shares of capital stock or other voting securities of CDnow were issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights. All outstanding shares of CDnow Capital Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable and not free of any preemptive rights. There were outstanding as of May 23, 2000, no options, warrants or other rights to acquire capital stock from the Company other than (w) options, warrants or other rights to acquire capital stock from the Company disclosed in Section 3.2(a) of the Company Disclosure Letter, (x) the Rights, (y) options to acquire capital stock from the Company representing in the aggregate the right to purchase approximately 2,677,475 shares of Company Common Stock (collectively, the "Company Stock Options") under the Company's 1995 --------------------- Stock Purchase and Option Plan, 1996 Stock Option Plan, Stock Incentive Plan and Non-Employee Director Stock Option Plan (collectively, the "Company Stock Option -------------------- Plans") and (z) rights to purchase an aggregate of no more than approximately ----- 12,000 shares of Company Common Stock under the Company's Employee Stock Discount Purchase Plan and the International Employee Discount Purchase Plan (collectively, the "Company Purchase Plans"). Section 3.2(a) of the Company ---------------------- Disclosure Letter sets forth a complete and correct list, as of May 23, 2000, of the number of shares of Company Common Stock subject to Company Stock Options or issued in violation of any other rights to purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right receive Company Common Stock granted under any provision of the PBCLCompany's Benefit Plans or otherwise, the CDnow Charterdates of grant and the exercise prices thereof. For purposes of this agreement, the CDnow By-laws or "Benefit Plans" means, with respect to ------------- any Contract Person, each employee benefit plan, program, arrangement and contract (including, without limitation, any "employee benefit plan," as defined in Section 3.05(3) to which CDnow is a party or otherwise bound. There are not any bondsof the Employee Retirement Income Security Act of 1974, debentures, notes or other indebtedness of CDnow having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow Common Stock may vote as amended ("Voting CDnow DebtERISA"). Except as set forth above , and any bonus, deferred compensation, stock bonus, stock purchase, ----- restricted stock, stock option, employment, termination, stay agreement or bonus, change in control and severance plan, program, arrangement and contract) in effect on the CDnow date of this Agreement or disclosed on the Company Disclosure Letter, there are not any options, warrants, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which CDnow such Person or any CDnow its Subsidiary is a party party, which is maintained or contributed to by which any of them is bound (i) obligating CDnow or any CDnow Subsidiary to issue, deliver or sellsuch Person, or cause with respect to be issuedwhich such Person could incur material liability under Section 4069, delivered 4201 or sold, additional shares 4212(c) of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stock. There are not any outstanding contractual obligations of CDnow or any CDnow Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow or any CDnow Subsidiary. As of the Effective Time, each CDnow Warrant will, by its terms, provide the holder thereof with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofERISA.

Capital Structure. The (a) As of the date hereof, the authorized capital stock of CDnow the Company consists of 200,000,000 90,100,000 shares of CDnow capital stock of which 90,000,000 are shares of Company Common Stock, without par value, and 50,000,000 100,000 are shares of preferred stock, without par value $1 per share, of the Company (together with the CDnow Common Stock, the "CDnow Capital Company Preferred Stock"). At the close of business on July 9March 15, 19992001, (i) 30,211,473 50,413,400 shares of CDnow Company Common Stock (including associated Rights) were issued and outstanding, all of which were validly issued, fully paid and nonassessable and free of preemptive rights, (ii) no 1,092 shares of CDnow Company Common Stock were held in the treasury or by CDnow in its treasury and Subsidiaries of the Company; (iii) 1,511,934 additional 8,013,681 shares of CDnow Company Common Stock were reserved for issuance pursuant to options to purchase shares of Company Common Stock ("Company Stock Options") issued and outstanding pursuant to (A) the CDnow Company's Stock Plans Option Plan, (as defined B) the Company's Outside Director Stock Option Plan and (C) the Bozell, Jacobs, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Inc. Stock Option Plan (collectively, the "Company Stock Option Plans") (with a weighted average exercise price between $28 and $29); (iv) an additional 868,912 shares of Company Common Stock were authorized (excluding shares subject to stockholder approval) for awards, but not yet issued; and (v) no shares of Company Preferred Stock were issued or outstanding. Set forth in Section 8.04(d3.2 of the letter dated the date hereof and delivered on the date hereof by the Company to Parent, which letter relates to this Agreement and is designated the Company Letter (the "Company Letter")). The CDnow Disclosure Letter sets forth , is a complete list of all CDnow Employee each benefit plan of the Company or its Subsidiaries under which any securities of the Company are issuable or reserved for issuance. All the outstanding shares of Company Common Stock Options (as defined are duly authorized, validly issued, fully paid and nonassessable and free of preemptive rights. As of the date of this Agreement, except for shares reserved or issuable in Section 8.04) outstanding at the close of business on July 12, 1999, together connection with the number Rights Agreement, except as set forth above, except for the issuance of shares of CDnow Company Common Stock subject to each such CDnow Employee Stock Option and upon the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Company Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant Options and the exercise price thereof. Except except as set forth above or in Section 3.2 of the CDnow Disclosure Company Letter, at the close of business on July 12, 1999, no shares of capital stock or other voting securities of CDnow the Company were issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights. All outstanding shares of CDnow Capital Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision As of the PBCLdate hereof, the CDnow Charter, the CDnow By-laws or any Contract except (as defined in Section 3.05i) to which CDnow is a party or otherwise bound. There are not any bonds, debentures, notes or other indebtedness of CDnow having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow Common Stock may vote ("Voting CDnow Debt"). Except as set forth above above, (ii) for options, warrants, calls, rights, puts and agreements that relate to securities of Subsidiaries other than Significant Subsidiaries with exercise or purchase prices that, in the CDnow Disclosure aggregate, do not exceed $25 million and that are not referenced in Section 3.2 of the Company Letter and (iii) as set forth in Section 3.2 of the Company Letter, there are not any no options, warrants, calls, rights, convertible puts or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind agreements to which CDnow the Company or any CDnow Subsidiary of its Subsidiaries is a party or by which any of them is bound (i) obligating CDnow the Company or any CDnow Subsidiary of its Subsidiaries to issue, deliver deliver, sell or sellredeem, or cause to be issued, delivered delivered, sold or soldredeemed, any additional shares of capital stock (or other voting securities or equity interests in, equivalents) or convertible or exchangeable securities of the Company or any security convertible of its Subsidiaries or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow obligating the Company or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary of its Subsidiaries to issue, grant, extend or enter into any such option, warrant, call, right, securityput or agreement. True, commitmentcomplete and correct copies of the Company Charter and Company Bylaws have been delivered to Parent. (b) Each outstanding share of capital stock (or other voting security or equity equivalent) of each Significant Subsidiary of the Company is duly authorized, Contractvalidly issued, arrangement fully paid and nonassessable, and each such share (or undertaking other voting security or equity equivalent) is owned by the Company or another Subsidiary of the Company, free and clear of all Liens other than such Liens which (iiiindividually or in the aggregate) that give are not material. The Company does not have any person outstanding bonds, debentures, notes or other obligations the holders of which have the right to receive any economic benefit vote (or right similar to convertible into or derived from the economic benefits and rights accruing to holders of CDnow Capital Stock. There are not any outstanding contractual obligations of CDnow or any CDnow Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow or any CDnow Subsidiary. As of the Effective Time, each CDnow Warrant will, by its terms, provide the holder thereof with exercisable for securities having the right to receive vote) with the amount stockholders of Merger Consideration such holder would the Company on any matter. Section 3.2(b) of the Company Letter contains a true, accurate and correct statement in all material respects of Exhibit 21 if it were dated as of March 15, 2001. (c) The Company and its Subsidiaries have received no mandatory obligations, contingent or otherwise, to provide financing to or make any investment in (in the Merger had form of a mandatory loan, capital contribution or similar payment) any person or entity (other than wholly-owned subsidiaries) except (i) in the case of such CDnow Warrant been exercised immediately prior persons and entities other than Modem Media, Inc. for obligations (A) involving no more than $15 million in the aggregate or (B) as disclosed in the Company SEC Documents (as hereinafter defined) or in Section 3.2(c) of the Company Letter and (ii) in the case of Modem Media, Inc., the guarantees referenced in Section 3.2(d) of the Company Letter. (d) Section 3.2(d) of the Company Letter discloses all the agreements that the Company has with Modem Media, Inc. and all guarantees, indemnities and other forms of credit support that the Company and its Subsidiaries have undertaken in respect of liabilities and obligations incurred by Modem Media, Inc. (e) Except as set forth in Section 3.2(e) of the Company Letter, neither the Company nor any of its Subsidiaries is a party to any agreement with Modem Media, Inc. that restricts the Effective Time (and no acquisition or disposition of shares of Modem Media, Inc. other consideration) upon exercise thereofthan agreements with regard to restrictions relating to compliance with applicable securities laws.

Capital Structure. The (a) As of the date hereof, the authorized capital stock of CDnow ▇▇▇▇ consists of 200,000,000 240,000,000 shares of CDnow common stock, par value $0.01 per share (“▇▇▇▇ Common Stock, without par value”), and 50,000,000 10,000,000 shares of preferred stock, without par value $0.01 per share (together with the CDnow Common “▇▇▇▇ Preferred Stock, the "CDnow Capital Stock"”). At the close of business on July 9January 16, 19992013, (i) 30,211,473 208,597,574.876 shares of CDnow ▇▇▇▇ Common Stock were issued and outstanding, (ii) no shares of CDnow Common ▇▇▇▇ Preferred Stock were held by CDnow in its treasury issued and outstanding, (iii) 1,511,934 additional 50,000 shares of CDnow ▇▇▇▇ Common Stock were reserved for issuance pursuant to the CDnow terms of outstanding options granted pursuant to the ▇▇▇▇ Stock Plans Option Plan and (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04iv) outstanding at the close of business on July 12, 1999, together with the number of 950,000 shares of CDnow ▇▇▇▇ Common Stock subject to each such CDnow Employee were available for grant under the ▇▇▇▇ Stock Option Plan. ▇▇▇▇ suspended sales pursuant to the DRIP as of December 16, 2012 and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or suspension remains in the CDnow Disclosure Letter, at the close of business on July 12, 1999, no shares of capital stock or other voting securities of CDnow were issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rightseffect. All issued and outstanding shares of CDnow Capital Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, capital stock of ▇▇▇▇ are duly authorized, validly issued, fully paid and nonassessable nonassessable, and not subject no class of capital stock is entitled to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the PBCL, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise boundrights. There are not any no outstanding bonds, debentures, notes or other indebtedness Indebtedness of CDnow ▇▇▇▇ having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters matter on which holders of CDnow shares of ▇▇▇▇ Common Stock may vote vote. Section 4.3(a) of the ▇▇▇▇ Disclosure Letter sets forth a complete and correct list, as of the date of this Agreement, of the total number of outstanding ▇▇▇▇ Options under the ▇▇▇▇ Stock Option Plan and, with respect to each ▇▇▇▇ Option outstanding as of the date of this Agreement, ("Voting CDnow Debt")A) the number of shares of ▇▇▇▇ Common Stock subject to such ▇▇▇▇ Option, (B) the name of the holder of such ▇▇▇▇ Option, (C) the per share exercise price, and (D) the grant date. There are no restricted stock, stock appreciation rights, restricted stock units, dividend equivalent rights, other equity compensation awards or other rights to purchase or receive ▇▇▇▇ Common Stock granted under the ▇▇▇▇ Stock Option Plan, or compensatory awards of units in the ▇▇▇▇ Operating Partnership, or otherwise other than the ▇▇▇▇ Options. The per share exercise price of each ▇▇▇▇ Option was not less than the fair market value of a share of ▇▇▇▇ Common Stock on the applicable grant date. One (1) Business Days prior to the Closing, ▇▇▇▇ will provide to Spirit a complete and correct list that contains the information required to be provided in Section 4.3(a) of the ▇▇▇▇ Disclosure Letter that is correct and complete as of the Closing Date. (b) All of the outstanding shares of capital stock of each of the ▇▇▇▇ Subsidiaries that is a corporation are duly authorized, validly issued, fully paid and nonassessable. All equity interests in each of the ▇▇▇▇ Subsidiaries that is a partnership or limited liability company are duly authorized and validly issued. All shares of capital stock of (or other ownership interests in) each of the ▇▇▇▇ Subsidiaries which may be issued upon exercise of outstanding options or exchange rights are duly authorized and, upon issuance will be validly issued, fully paid and nonassessable. Except as set forth above or in Section 4.3(b) of the CDnow ▇▇▇▇ Disclosure Letter, ▇▇▇▇ owns, directly or indirectly, all of the issued and outstanding capital stock and other ownership interests of each of the ▇▇▇▇ Subsidiaries, free and clear of all encumbrances other than statutory or other Liens for Taxes or assessments which are not yet due or delinquent or the validity of which is being contested in good faith by appropriate proceedings and for which there are not any adequate accruals and reserves on the financial statements of ▇▇▇▇ (if such reserves are required pursuant to GAAP). (c) Except as set forth in Section 4.3(c) of the ▇▇▇▇ Disclosure Letter or as set forth in the ▇▇▇▇ Operating Partnership Agreement, as of the date of this Agreement, there are no securities, options, warrants, calls, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contractsagreements, rights of first refusal, arrangements or undertakings of any kind to which CDnow ▇▇▇▇ or any CDnow ▇▇▇▇ Subsidiary is a party or by which any of them is bound (i) bound, obligating CDnow ▇▇▇▇ or any CDnow ▇▇▇▇ Subsidiary to issue, deliver or sellsell or create, or cause to be issued, delivered or soldsold or created, additional shares of capital ▇▇▇▇ Common Stock, shares of ▇▇▇▇ Preferred Stock or other equity securities or phantom stock or other contractual rights the value of which is determined in whole or in part by the value of any equity interests in, security of ▇▇▇▇ or any security convertible of the ▇▇▇▇ Subsidiaries or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow obligating ▇▇▇▇ or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow ▇▇▇▇ Subsidiary to issue, grant, extend or enter into any such security, option, warrant, call, right, security, commitment, Contractagreement, right of first refusal, arrangement or undertaking or (iiiundertaking. Except as set forth in Section 4.3(c) that give any person of the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stock. There ▇▇▇▇ Disclosure Letter, there are not any no outstanding contractual obligations of CDnow ▇▇▇▇ or any CDnow ▇▇▇▇ Subsidiary to repurchase, redeem or otherwise acquire any shares of ▇▇▇▇ Common Stock, shares of ▇▇▇▇ Preferred Stock, or other equity securities of ▇▇▇▇ or any ▇▇▇▇ Subsidiary. Neither ▇▇▇▇ nor any ▇▇▇▇ Subsidiary is a party to or, to the Knowledge of ▇▇▇▇, bound by any agreements or understandings concerning the voting (including voting trusts and proxies) of any capital stock of CDnow ▇▇▇▇ or any CDnow Subsidiary. As of the Effective Time▇▇▇▇ Subsidiaries. (d) ▇▇▇▇ does not have a “poison pill” or similar shareholder rights plan. (e) Neither ▇▇▇▇ nor any ▇▇▇▇ Subsidiary is under any obligation, each CDnow Warrant willcontingent or otherwise, by its terms, provide reason of any contract to register the holder thereof with offer and sale or resale of any of their securities under the right to receive Securities Act. (f) All dividends or distributions on the amount shares of Merger Consideration such holder would ▇▇▇▇ Common Stock and any material dividends or distributions on any securities of any ▇▇▇▇ Subsidiary which have received in the Merger had such CDnow Warrant been exercised immediately authorized or declared prior to the date hereof have been paid in full (except to the extent such dividends have been publicly announced and are not yet due and payable). (g) ▇▇▇▇ is the sole general partner of the ▇▇▇▇ Operating Partnership and, as the date hereof, owns a 99.99% interest in the ▇▇▇▇ Operating Partnership. ▇▇▇▇ REIT Advisors II, LLC (the “Advisor”) is the sole limited partner and owns, as of the date hereof, less than 0.01% of the interest in the ▇▇▇▇ Operating Partnership. (h) The shares of ▇▇▇▇ Common Stock to be issued by ▇▇▇▇ in exchange for shares of the Spirit Common Stock pursuant to this Agreement will be duly authorized for issuance prior to the Company Merger Effective Time (and no other consideration) upon exercise thereofwill, when issued in the Company Merger pursuant to the terms of this Merger Agreement, be validly issued, fully paid and nonassessable.

Capital Structure. The As of the date of this Agreement, the authorized capital stock of CDnow the Company consists of 200,000,000 (i) 75,000,000 shares of CDnow Company Common Stock, without par value, Stock and 50,000,000 (ii) 1,000,000 shares of preferred stock, without par value $0.001 per share (“Company Preferred Stock” and, together with the CDnow Company Common StockStock and any other capital stock of the Company, the "CDnow “Company Capital Stock"”). At the close of business on July 9March 11, 19992014 (the “Capitalization Reference Date”), (iA) 30,211,473 39,206,958 shares of CDnow Company Common Stock were issued and outstanding, including 472,379 shares of Company Restricted Shares, (iiB) no shares of CDnow Common Preferred Stock were held by CDnow in its treasury issued and outstanding, (iiiC) 1,511,934 additional 2,460,041 shares of CDnow Company Common Stock were reserved for issuance pursuant to the CDnow Company Stock Plans Plans, (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04D) outstanding at the close of business on July 12, 1999, together with the number of options to purchase 1,596,287 shares of CDnow Company Common Stock subject to each such CDnow Employee were issued and outstanding under the Company Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire Plans, (E) 40,472 shares of CDnow Common Stock Company Phantom Shares and (the "CDnow Warrants"F) outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant no Voting Debt was issued and the exercise price thereof. Except as set forth above or in the CDnow Disclosure Letter, at the close of business on July 12, 1999, no shares of capital stock or other voting securities of CDnow were issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights. All outstanding shares of CDnow Capital Company Common Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, are validly issued, fully paid and nonassessable non-assessable and are not subject to any preemptive rights or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision other statutory rights. Schedule 3.1(b)(i) of the PBCLCompany Disclosure Schedule sets forth, as of the CDnow CharterCapitalization Reference Date, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise bound. There are not any bonds, debentures, notes or other indebtedness of CDnow having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow Common Stock may vote ("Voting CDnow Debt"). Except as set forth above or in the CDnow Disclosure Letter, there are not any all outstanding options, warrants, rights (including preemptive rights), convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind Contracts to which CDnow the Company or any CDnow Subsidiary of the Company is a party or by which any of them it is bound (i) in any case obligating CDnow the Company or any CDnow Subsidiary of the Company to issue, deliver deliver, sell, purchase, redeem or sellacquire, or cause to be issued, delivered delivered, sold, purchased, redeemed or soldacquired, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow or any CDnow Subsidiary Company Capital Stock or any Voting CDnow Debt, (ii) or obligating CDnow the Company or any CDnow Subsidiary of the Company to issue, grant, extend or enter into any such option, warrant, call, right, securitycommitment or agreement, commitmentexcluding Company Equity Awards. Schedule 3.1(b)(ii) of the Company Disclosure Schedule sets forth, Contractas of the Capitalization Reference Date, arrangement or undertaking or (iii) that give any person a complete and correct list of all securities of the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stock. There are not any outstanding contractual obligations of CDnow Company or any CDnow Subsidiary to repurchaseof the Company convertible into or exchangeable or exercisable for shares of Company Capital Stock or Voting Debt, redeem or otherwise acquire any excluding Company Equity Awards. Schedule 3.1(b)(iii) of the Company Disclosure Schedule sets forth, as of the Capitalization Reference Date, a complete and correct list of all outstanding Company Equity Awards, including the holder, date of grant, exercise price (if applicable) and number of shares of Company Capital Stock subject thereto. All outstanding shares of capital stock of CDnow the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly-owned Subsidiary of the Company, free and clear of any Encumbrances other than Encumbrances described in clause (g) of the definition of “Permitted Encumbrances”. Except as set forth in this Section 3.1(b), and except for changes since the Capitalization Reference Date resulting from the exercise or vesting of Company Equity Awards granted in accordance with Section 4.1(b), (1) there are no outstanding shares of Company Capital Stock, (2) there is no Voting Debt, (3) there are no securities of the Company or any CDnow Subsidiary. As Subsidiary of the Effective TimeCompany convertible into or exchangeable or exercisable for shares of Company Capital Stock or Voting Debt, each CDnow Warrant willand (4) there are no options, warrants, calls, rights (including preemptive rights), Contracts to which the Company or any Subsidiary of the Company is a party or by its termswhich it is bound in any case obligating the Company or any Subsidiary of the Company to issue, provide deliver, sell, purchase, redeem or acquire, or cause to be issued, delivered, sold, purchased, redeemed or acquired, additional shares of Company Capital Stock or any Voting Debt, or obligating the holder thereof with Company or any Subsidiary of the right Company to receive grant, extend or enter into any such option, warrant, call, right, commitment or agreement. There are no stockholder agreements, voting trusts or other Contracts to which the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior Company is a party or by which it is bound relating to the Effective Time (voting of any shares of Company Capital Stock. Schedule 3.1(b)(iv) of the Company Disclosure Schedule contains a complete and accurate list of the name, jurisdiction of organization, capitalization and schedule of stockholders of each Subsidiary of the Company. The Company has no joint venture or other considerationsimilar material equity interests in any Person or obligations, whether contingent or otherwise, to consummate any material additional investment in any Person other than its Subsidiaries and the joint ventures listed on Schedule 3.1(b)(v) upon exercise thereofof the Company Disclosure Schedule. Except as set forth in Schedule 3.1(b)(vi) of the Company Disclosure Schedule, as of the date of this Agreement, none of the Company or any of its Subsidiaries has any Indebtedness other than intercompany indebtedness owed to the Company or one of its wholly-owned Subsidiaries.

Capital Structure. The authorized capital stock of CDnow the Company consists of 200,000,000 (i) Forty Million (40,000,000) shares of CDnow Common Stock, without par value, value $0.001 per share and 50,000,000 (ii) Five Million (5,000,000) shares of preferred stockPreferred Stock, without par value $0.001 per share (together with the CDnow Common “Company Preferred Stock, the "CDnow Capital Stock"”). At the close As of business on July 9January 11, 19992012, (i) 30,211,473 there were 18,591,609 shares of CDnow Common Company Shares issued and outstanding and no shares of Company Preferred Stock were issued and outstanding, (ii) no shares of CDnow Common Stock were held by CDnow in its treasury and (iii) 1,511,934 additional shares of CDnow Common Stock were reserved for issuance other than any Company Shares issued after the date hereof pursuant to Company Options and Company RSUs outstanding on the CDnow Stock Plans (date of this Agreement. As of January 11, 2012, there were outstanding Company Options to acquire 2,363,803 Company Shares and outstanding Company RSUs to acquire 461,468 Company Shares. As of the date of this Agreement, the only outstanding warrants to purchase Company Shares are the Company Warrants. Section 4.2 of the Company Schedule of Exceptions sets forth, as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth of the date of this Agreement, a complete and accurate list of all CDnow Employee the Company Options and Company RSUs, the Company Stock Options (as defined in Section 8.04) outstanding at the close of business on July 12Plan under which each Company Option and Company RSU was awarded, 1999, together with the number of shares issuable thereunder, vesting schedule, exercise price, if any, and expiration date relating thereto. All of CDnow Common Stock subject to each such CDnow Employee Stock Option the issued and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire outstanding shares of CDnow Common Stock (Company Shares have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights. As of the "CDnow date of this Agreement, except as provided by this Agreement and except for the Company Options, Company RSUs and Company Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in the CDnow Disclosure Letterthere are no subscriptions, at the close of business on July 12options, 1999warrants, no shares of capital calls, stock appreciation rights or other voting securities commitments, rights or agreements of CDnow were issuedany character relating to dividend rights or the purchase, reserved for sale (other than registration rights), issuance or outstandingvoting of any security of the Company to which the Company or any Subsidiary of the Company is a party, including any securities convertible into, exchangeable for or representing the right to purchase or otherwise receive, any Company Shares. There are no outstanding CDnow stock appreciation rights. All outstanding shares of CDnow Capital Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the PBCL, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise bound. There are not any bonds, debentures, notes or other indebtedness of CDnow having the Company or any of the Subsidiaries which provide by their terms a right to vote (on matters submitted to stockholders of the Company. There are no voting trusts or convertible into, other agreements or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow Common Stock may vote ("Voting CDnow Debt"). Except as set forth above or in the CDnow Disclosure Letter, there are not any options, warrants, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind understandings to which CDnow the Company or any CDnow Subsidiary of the Subsidiaries is a party or by which any with respect to the voting of them is bound (i) obligating CDnow or any CDnow Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional the shares of capital stock or other equity interests in, of the Company or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stock. There are not any outstanding contractual obligations of CDnow or any CDnow Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow or any CDnow Subsidiary. As of the Effective Time, each CDnow Warrant will, by its terms, provide the holder thereof with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofSubsidiaries.

Capital Structure. The authorized capital stock of CDnow the Company consists of 200,000,000 shares of CDnow Common Stock, without par value, and 50,000,000 2,000,000 shares of preferred stock, without par value $.01 per share (together with the CDnow Common “Preferred Stock”), the "CDnow Capital and 10,000,000 shares of Company Stock"). At the close of business on July 9December 31, 19992009 (the “Capitalization Date”), (i) 30,211,473 5,210,950 shares of CDnow Common Stock Company were issued and outstanding, (ii) no 52,000 shares of CDnow Common Company Stock were held by CDnow in its treasury subject to outstanding Company Stock Options with a weighted average exercise price of $2.43 per share, and (iii) 1,511,934 additional no shares of CDnow Common Preferred Stock were reserved for issuance pursuant to the CDnow Stock Plans (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04) outstanding at the close of business on July 12, 1999, together with the number of shares of CDnow Common Stock subject to each such CDnow Employee Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereofissued or outstanding. Except as set forth above or in the CDnow Disclosure Letterabove, at the close of business on July 12, 1999the Capitalization Date, no shares of capital stock or other voting securities or equity interests of CDnow the Company were issued, reserved for issuance (other than with respect to such shares reserved for issuance upon the exercise of Company Stock Options) or outstanding. There are no outstanding CDnow stock appreciation rights, “phantom” stock rights, restricted stock units, performance units, rights to receive shares of Company Stock on a deferred basis or other rights (other than Company Stock Options) that are linked to the value of Company Stock (collectively, “Company Stock-Based Awards”). The Company has provided or made available to Parent a true and complete list, as of the date of this Agreement, of each outstanding Company Stock Option and the exercise price thereof. The Company Stock is not listed on any national securities exchange. All Company Stock Options were issued under the Company Stock Plans and Schedule 3.03(a) is a true and correct list of the outstanding Company Stock Options as of the Capitalization Date. All outstanding shares of CDnow Capital Stock capital stock of the Company are, and all such shares that which may be issued prior pursuant to the Effective Time Company Stock Options will be be, when issuedissued in accordance with the terms thereof, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the PBCL, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise boundrights. There are not any no bonds, debentures, notes or other indebtedness of CDnow the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders stockholders of CDnow Common Stock the Company may vote ("Voting CDnow Debt")vote. Except as set forth above in this Section 4.03 and except for issuances of shares of Company Stock pursuant to the exercise of Company Stock Options, (A) there are not issued, reserved for issuance or in outstanding (1) any shares of capital stock or other voting securities or equity interests of the CDnow Disclosure LetterCompany, (2) any securities of the Company convertible into or exchangeable or exercisable for shares of capital stock or other voting securities or equity interests of the Company, (3) any warrants, calls, options or other rights to acquire from the Company, and no obligation of the Company to issue, any capital stock, voting securities, equity interests or securities convertible into or exchangeable or exercisable for capital stock or voting securities of the Company, or (4) any Company Stock-Based Awards, and (B) there are not any optionsoutstanding obligations of the Company to repurchase, warrantsredeem or otherwise acquire any such shares of capital stock, rightsequity interests or other securities or to register, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which CDnow or any CDnow Subsidiary is a party or by which any of them is bound (i) obligating CDnow or any CDnow Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional any such shares of capital stock stock, equity interests or other equity interests in, or securities. Neither the Company nor any security convertible or exercisable for or exchangeable into of its Subsidiaries is a party to any capital stock voting Contract with respect to the voting of or other equity interest in, CDnow or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stock. There are not any outstanding contractual obligations of CDnow or any CDnow Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow or any CDnow Subsidiary. As of the Effective Time, each CDnow Warrant will, by its terms, provide the holder thereof with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofsecurities.

Capital Structure. (a) The authorized share capital stock of CDnow the Company consists of 200,000,000 shares an unlimited number of CDnow Common Stock, without par value, and 50,000,000 shares Shares. As of preferred stock, without par value (together with the CDnow Common Stock, the "CDnow Capital Stock"). At the close of business on July 9, 1999, Capitalization Date: (i) 30,211,473 shares of CDnow 178,714,423 Common Stock Shares were issued and outstanding, ; (ii) no shares of CDnow warrants to acquire 25,457,623 Common Stock Shares were held by CDnow in its treasury issued and outstanding (the “Existing Warrants”); (iii) 1,511,934 additional shares of CDnow Company Options to purchase 12,862,111 Common Stock Shares were issued and outstanding; and (iv) no Common Shares were reserved for issuance other than (A) 12,862,111 Common Shares reserved for issuance pursuant to the CDnow Stock Plans Plans, (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04B) outstanding at the close of business on July 12, 1999, together with the number of shares of CDnow 25,457,623 Common Stock subject to each such CDnow Employee Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in the CDnow Disclosure Letter, at the close of business on July 12, 1999, no shares of capital stock or other voting securities of CDnow were issued, Shares reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights. All outstanding shares upon the exercise of CDnow Capital Stock arethe Existing Warrants and (C) 14,674,903.68 Common Shares reserved for issuance pursuant to the Ginkgo Agreement, and all such shares that which number of Common Shares may be adjusted pursuant to the terms and conditions of the Ginkgo Agreement. Since the Capitalization Date and through the date of this Agreement, no Common Shares have been repurchased or redeemed or issued (other than with respect to the exercise of Company Options or tandem Share Appreciation Rights outstanding prior to the Effective Time will be when issuedCapitalization Date and, duly authorized, validly issued, fully paid and nonassessable and not subject pursuant to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision the terms of the PBCLapplicable Stock Plan in effect on the date of this Agreement or the issuances of Common Shares as otherwise expressly permitted by this Agreement), and no Common Shares have been reserved for issuance and no Company Options have been granted, except for grants of Company Options in accordance with Section 5.7(a)(v) pursuant to the CDnow Charterterms of the applicable Stock Plan in effect on the date of this Agreement. (b) Other than the Existing Warrants, neither the CDnow By-laws or Company nor any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise bound. There are not of its Subsidiaries have outstanding any bonds, debentures, notes or other indebtedness obligations the holders of CDnow having which have the right to vote (or convertible into, or exchangeable for, exercisable for securities having the right to vote) with the stockholders of the Company on any matters on which matter or with the equity holders of CDnow Common Stock may vote ("Voting CDnow Debt"). Except as set forth above or in the CDnow Disclosure Letter, there are not any options, warrants, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which CDnow or any CDnow Subsidiary is a party or by which any of them is bound the Company’s Subsidiaries on any matters, respectively. (ic) obligating CDnow or any CDnow Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow or any CDnow Subsidiary or any Voting CDnow Debt, (iiSchedule B2(c) obligating CDnow or any CDnow Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stock. There are not any outstanding contractual obligations of CDnow or any CDnow Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow or any CDnow Subsidiary. As of the Effective TimeCompany Disclosure Letter sets forth a correct and complete list of all outstanding Company Options as of the Capitalization Date, setting forth the number of Common Shares subject to each CDnow Warrant willCompany Option and the holder, by its termsgrant date, provide the holder thereof vesting schedule and exercise or reference price with the right respect to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofeach Company Option as applicable.

Capital Structure. (i) The authorized capital stock of CDnow Purchaser consists of 200,000,000 800,000,000 shares of CDnow Purchaser Common Stock, without par valuevalue $0.01 per share, and 50,000,000 100,000,000 shares of preferred stock, without par value $0.01 per share. (together with ii) As of the CDnow Common Stock, the "CDnow Capital Stock"). At the close date of business on July 9, 1999this Agreement, (iA) 30,211,473 81,067,848 shares of CDnow Purchaser Common Stock were are issued and outstanding, all of which are validly issued, fully paid and nonassessable and were issued in full compliance with all applicable laws and not in violation of any preemptive rights; (iiB) no shares of CDnow Purchaser preferred stock are issued and outstanding; and (C) 4,072,308 shares of Purchaser Common Stock were held by CDnow in its treasury and (iii) 1,511,934 additional shares of CDnow Common Stock were are reserved for issuance pursuant to outstanding grants or awards under Purchaser’s stock-based benefit plans. (iii) The shares of Purchaser Common Stock to be issued in exchange for shares of Company Common Stock upon consummation of the CDnow Stock Plans (as defined Merger in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined accordance with this Agreement have been duly authorized and when issued in Section 8.04) outstanding at the close of business on July 12, 1999, together accordance with the number terms of shares of CDnow Common Stock this Agreement, will be validly issued, fully paid and nonassessable and subject to each such CDnow Employee Stock Option and no preemptive rights. (iv) No bonds, debentures, notes or other indebtedness having the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list right to vote on any matters on which stockholders of all warrants to acquire shares of CDnow Common Stock Purchaser may vote are issued or outstanding. (the "CDnow Warrants"v) outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in this Section 3.3(c), as of the CDnow Disclosure Letterdate of this Agreement, at the close of business on July 12, 1999, (A) no shares of capital stock or other voting securities of CDnow were Purchaser are issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights. All outstanding , and (B) other than options to purchase shares of CDnow Capital Stock arePurchaser Common Stock, and all such shares that may be issued prior to neither the Effective Time will be when issuedCompany nor any of its Subsidiaries has or is bound by any outstanding subscriptions, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the PBCL, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise bound. There are not any bonds, debentures, notes or other indebtedness of CDnow having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow Common Stock may vote ("Voting CDnow Debt"). Except as set forth above or in the CDnow Disclosure Letter, there are not any options, warrants, calls, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements commitments or undertakings agreements of any kind to which CDnow character obligating Purchaser or any CDnow Subsidiary is a party or by which any of them is bound (i) obligating CDnow or any CDnow Subsidiary its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, any additional shares of capital stock of Purchaser (including any rights plan or other equity interests in, agreement) or obligating Purchaser or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary its Subsidiaries to issue, grant, extend or enter into any such option, warrant, call, right, convertible security, commitmentcommitment or agreement. Neither Purchaser nor any of its Subsidiaries has or is bound by any rights of any character relating to the purchase, Contractsale or issuance or voting of, arrangement or undertaking right to receive dividends or (iii) that give other distributions on shares of Purchaser Common Stock, or any person other security of Purchaser or a Subsidiary of Purchaser or any securities representing the right to vote, purchase or otherwise receive any economic benefit shares of Purchaser Common Stock or right any other security of Purchaser or a Subsidiary of Purchaser. Other than as stated herein, there are no outstanding securities or instruments that contain any redemption or similar to or derived from the economic benefits provisions, and rights accruing to holders of CDnow Capital Stock. There there are not any no outstanding contractual obligations of CDnow Purchaser or any CDnow Subsidiary of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow Purchaser or any CDnow Subsidiary. As of the Effective Time, each CDnow Warrant will, by its terms, provide the holder thereof with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofSubsidiaries.

Capital Structure. (i) The authorized capital stock of CDnow the Company consists of 200,000,000 100,000 shares of CDnow Common Stock, without par value, and 50,000,000 common stock. (ii) As of the date of this Agreement: (A) 87,934 shares of preferred stock, without par value (together with the CDnow Common Stock, the "CDnow Company Capital Stock"). At the close of business on July 9, 1999, (i) 30,211,473 shares of CDnow Common Stock were are issued and outstanding, all of which are validly authorized, validly issued, fully paid, and nonassessable and were issued in full compliance with all applicable laws; (iiB) no shares of CDnow Common Stock were held by CDnow in its treasury and (iii) 1,511,934 additional shares of CDnow Common Stock were reserved for issuance pursuant to the CDnow Stock Plans (as defined 2,650 Company SARs are outstanding. Set forth in Section 8.04(d)). The CDnow 3.2(c)(ii)(B) of the Company’s Disclosure Letter sets forth is a complete and accurate list of all CDnow Employee Stock Options awards under the Company’s equity incentive plans, including names of recipients, award dates, and vesting schedules; (as defined in Section 8.04C) outstanding at Except for the close of business on July 12Company SARs, 1999no stock options or other rights to purchase Company Capital Stock, together with the number of shares of CDnow Common Stock subject to each such CDnow Employee Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock are issued or outstanding; (the "CDnow Warrants"D) outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in Section 3.2(c)(ii)(D) of the CDnow Company’s Disclosure Letter, at there are no preemptive rights or transfer restriction applicable to Company Capital Stock. (iii) No bonds, debentures, notes or other indebtedness, in each case having the close right to vote on any matters on which shareholders of business on July 12the Company may vote, 1999are issued or outstanding. (iv) As of the date of this Agreement, (A) except for outstanding shares of Company Capital Stock, no shares of capital stock or other voting securities of CDnow were the Company are issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights. All outstanding shares of CDnow Capital Stock are, and all such shares that may be issued prior to (B) neither the Effective Time will be when issuedCompany nor any of its Subsidiaries has or is bound by any outstanding subscriptions, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the PBCL, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise bound. There are not any bonds, debentures, notes or other indebtedness of CDnow having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow Common Stock may vote ("Voting CDnow Debt"). Except as set forth above or in the CDnow Disclosure Letter, there are not any options, warrants, puts, calls, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements commitments or undertakings agreements of any kind to which CDnow character obligating the Company or any CDnow Subsidiary is a party or by which any of them is bound (i) obligating CDnow or any CDnow Subsidiary its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, any additional shares of capital stock of the Company (including any rights plan or other equity interests in, agreement and including any cash awards where the amount of payment is determined in whole or any security convertible or exercisable for or exchangeable into in part on the price of any capital stock of the Company or other equity interest in, CDnow its Subsidiaries) or obligating the Company or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary of its Subsidiaries to issue, grant, extend or enter into any such option, warrant, put, call, right, convertible security, commitmentcommitment or agreement. Except as set forth in this Section 3.2(c), Contractneither the Company nor any of its Subsidiaries has or is bound by any rights of any character relating to the purchase, arrangement sale or undertaking issuance or (iii) that give voting of, or right to receive dividends or other distributions on shares of Company Capital Stock, or any person other security of the Company or a Subsidiary of the Company or any securities representing the right to vote, purchase or otherwise receive any economic benefit shares of Company Capital Stock or right any other security of the Company or a Subsidiary of the Company. Other than as stated herein, there are no outstanding securities or instruments that contain any redemption or similar to or derived from the economic benefits provisions, and rights accruing to holders of CDnow Capital Stock. There there are not any no outstanding contractual obligations of CDnow the Company or any CDnow Subsidiary of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow the Company or any CDnow Subsidiary. As of its Subsidiaries. (v) Other than the Company Voting Agreements and except as otherwise contemplated in Section 5.8 of this Agreement, there are no voting trusts, shareholder agreements, proxies or similar agreements to which the Company or any of its Subsidiaries has a contractual obligation in effect with respect to the voting or transfer of Company Capital Stock or other voting securities or equity interests of the Effective Time, each CDnow Warrant will, by its terms, provide the holder thereof with the right to receive the amount of Merger Consideration such holder would Company or granting any shareholder or other person any registration rights. The Company does not have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofeffect a “poison pill” or similar shareholder rights plan.

Capital Structure. (a) The authorized capital stock of CDnow the Company consists of 200,000,000 1,000,000,000 shares of CDnow the Company Common Stock, without par value, value $0.0001 per share and 50,000,000 200,000,000 shares of preferred stock, without par value $0.0001 per share (together with the CDnow Common “Company Preferred Stock, the "CDnow Capital Stock"”). At the close of business on July 9February 13, 19992024 (the “Measurement Date”), (i) 30,211,473 47,166,421 shares of CDnow the Company Common Stock were issued and outstanding, (ii) no shares of CDnow the Company Common Stock were held by CDnow the Company in its treasury and treasury, (iii) 1,511,934 additional 9,021,658 shares of CDnow the Company Common Stock were subject to outstanding Company Stock Options with a weighted average exercise price of $9.83 per share, (iv) 121,713 shares of the Company Common Stock were subject to outstanding Company Restricted Stock Units, (v) 20,021,298 shares of the Company Common Stock were reserved for issuance pursuant to the CDnow Company Stock Plans Plans, of which 5,638,023 shares were available for future issuance, (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04vi) outstanding at the close of business on July 12, 1999, together with the number of 1,316,982 shares of CDnow the Company Common Stock subject were reserved for issuance pursuant to each such CDnow Employee Stock Option the Company ESPP, of which 1,116,217 shares were available for future issuance, and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire (vii) no shares of CDnow Common Company Preferred Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereofwere issued or outstanding. Except as set forth above or in the CDnow Disclosure Letterabove, at the close of business on July 12, 1999the Measurement Date, no shares of capital stock or other voting securities of CDnow the Company were issued, reserved for issuance or outstanding. There are From the Measurement Date to the Agreement Date, there have been no outstanding CDnow issuances by the Company of shares of capital stock appreciation rights. or other voting securities or equity interests of the Company or options, warrants, convertible or exchangeable securities, stock-based performance units or other rights to acquire shares of capital stock or other voting securities or equity interests of the Company or other rights that give the holder thereof any economic or voting interest of a nature accruing to the holders of the Company Common Stock, other than the issuance of the Company Common Stock upon the exercise of Company Stock Options or vesting of Company Restricted Stock Units in accordance with their terms. (b) All outstanding shares of CDnow Capital the Company Common Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision rights. (c) As of the PBCLAgreement Date, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise bound. There there are not any no bonds, debentures, notes or other indebtedness of CDnow the Company or its subsidiaries having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow the Company Common Stock may vote by virtue of their ownership thereof ("“Voting CDnow Company Debt"”). . (d) Except as set forth above or in Section 4.02(d) of the CDnow Company Disclosure Letter, as of the Measurement Date, there are not any no options, warrants, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements units or undertakings of any kind other rights or Contracts to which CDnow or any CDnow Subsidiary the Company is a party or by which any of them the Company is bound (i) obligating CDnow or any CDnow Subsidiary the Company to issue, grant, deliver or sell, or cause to be issued, granted, delivered or sold, additional shares of capital stock of, or other voting securities or equity interests in, or any security convertible or exercisable exchangeable for or exchangeable into any shares of capital stock of of, or other voting securities or equity interest interests in, CDnow or any CDnow Subsidiary the Company or any Voting CDnow Company Debt, (ii) obligating CDnow or any CDnow Subsidiary the Company to issue, grant, extend grant or enter into any such option, warrant, call, right, security, commitmentunit, right or Contract, arrangement or undertaking or (iii) that give any person Person the right to receive any economic benefit or voting interest of a nature accruing to the holders of the Company Common Stock or (iv) restricting the transfer of, containing any right of first refusal or right similar to of first offer with respect to, or derived from requiring the economic benefits and rights accruing to holders registration for sale of CDnow Capital Stock. There any shares of, capital stock of the Company. (e) As of the Measurement Date, there are not any no outstanding contractual obligations of CDnow or any CDnow Subsidiary the Company to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow the Company or any CDnow Subsidiary. As options, warrants, convertible or exchangeable securities, stock-based performance units or other rights to acquire shares of capital stock of the Effective TimeCompany, except for (i) acquisitions of shares of the Company Common Stock in connection with the surrender of shares of the Company Common Stock by holders of Company Stock Options in order to pay the exercise price of Company Stock Options, (ii) the withholding of shares of the Company Common Stock to satisfy tax obligations with respect to awards granted pursuant to the Company Stock Plans and (iii) the acquisition by the Company of Company Stock Options and Company Restricted Stock Units in connection with the forfeiture of such awards. (f) All Company Stock Options and Company Restricted Stock Units are evidenced by written award agreements, in each CDnow Warrant willcase, by its termssubstantially in the forms that have been made available to Parent, provide except to the extent that such agreements differ from such forms and from one another with respect to the number of shares of the Company Common Stock covered thereby, the type of award, the exercise price, exercise period, vesting schedule, vesting terms and expiration date applicable thereto. (g) Section 4.02(g) of the Company Disclosure Letter sets forth a true and complete list of all outstanding Company Stock Options and Company Restricted Stock Units, as of the Measurement Date, indicating for each such Company Stock Option or Company Restricted Stock Unit: (i) the name of the holder thereof thereof, (ii) the date of grant, (iii) the number of vested and unvested Company Stock Options and Company Restricted Stock Units and shares of Company Common Stock subject thereto, and (iv) for each Company Stock Option, the exercise price. Each Company Stock Option and Company Restricted Stock Unit was issued in accordance with the right to receive terms of the amount Company Stock Plan under which it was granted and all applicable Laws. Each Company Stock Option characterized by the Company on Section 4.02(g) of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to Company Disclosure Letter as an “incentive stock option” within the Effective Time (and no other consideration) upon exercise thereofmeaning of Section 422 of the Code complies with all of the applicable requirements of Section 422 of the Code.

Capital Structure. (i) The authorized capital stock of CDnow Telaria consists of 200,000,000 250,000,000 shares of CDnow common stock, $0.0001 par value per share (the “Telaria Common Stock, without par value”), and 50,000,000 10,000,000 shares of undesignated preferred stock, without $0.0001 par value per share (together with the CDnow Common “Telaria Preferred Stock, the "CDnow Capital Stock"”). At the close of business on July 9December 11, 19992019 (the “Telaria Measurement Date”), (iA) 30,211,473 46,833,507 shares of CDnow Telaria Common Stock were issued and outstanding (for the avoidance of doubt, excluding shares of Telaria Common Stock held by Telaria in its treasury), (B) 12,564,240 shares of Telaria Common Stock were held by Telaria in its treasury, (C) no shares of Telaria Preferred Stock were issued and outstanding, (iiD) no 5,410,193 shares of CDnow Telaria Common Stock were held by CDnow in its treasury subject to issuance pursuant to Telaria Stock Options and (iiiE) 1,511,934 additional 2,476,091 shares of CDnow Telaria Common Stock were reserved for subject to issuance pursuant to the CDnow Stock Plans Telaria RSU Awards. (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04ii) All outstanding at the close of business on July 12, 1999, together with the number of shares of CDnow Common Stock subject to each such CDnow Employee Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in the CDnow Disclosure Letter, at the close of business on July 12, 1999, no shares of capital stock or other voting securities of CDnow were issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights. All outstanding shares of CDnow Capital Stock Telaria are, and all such shares of capital stock of Telaria that may be issued prior to the Effective Time will be as permitted by this Agreement or otherwise shall be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the PBCL, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise bound. There are not any bonds, debentures, notes or other indebtedness of CDnow having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow Common Stock may vote ("Voting CDnow Debt")rights. Except as set forth above in this Section 4.1(c) and except for changes since the Telaria Measurement Date resulting from the issuance of shares of Telaria Common Stock pursuant to Telaria Equity Awards outstanding on the Telaria Measurement Date in accordance with their present terms or in the CDnow Disclosure Letteras expressly permitted by Section 5.1(a)(ii), (A) there are not issued or outstanding (1) any shares of capital stock or other voting or equity securities or interests of Telaria, (2) any securities or interests of Telaria or any of its Subsidiaries convertible into or exchangeable or exercisable for, or based upon the value of, shares of capital stock or voting or equity securities or interests of Telaria or (3) any warrants, calls, options, warrants, preemptive rights, subscriptions or other rights to acquire from Telaria or any of its Subsidiaries (including any Subsidiary trust), or obligations of Telaria or any of its Subsidiaries to issue, any capital stock, voting or equity securities or interests or securities or interests convertible into or exchangeable securitiesor exercisable for, "phantom" or based upon the value of, capital stock rightsor voting or equity securities or interests of Telaria, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings and (B) there are no outstanding obligations of any kind to which CDnow Telaria or any CDnow Subsidiary is a party of its Subsidiaries to repurchase, redeem or by which otherwise acquire any of them is bound (i) obligating CDnow such securities or any CDnow Subsidiary interests or to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares any such securities or interests of Telaria. (iii) Except for the Telaria Voting Agreement, there are no stockholder agreements or voting trusts or other agreements or understandings to which Telaria is a party with respect to the voting, or restricting the transfer, of the capital stock or other equity interests ininterest of Telaria. Telaria has not granted any preemptive rights, anti-dilutive rights or any security convertible rights of first refusal, registration rights or exercisable for or exchangeable into any similar rights with respect to its shares of capital stock of or other equity interest in, CDnow or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stockare in effect. There are not any outstanding contractual obligations of CDnow or any CDnow Subsidiary to repurchase, redeem or otherwise acquire any No shares of capital stock of CDnow Telaria are held by any Subsidiary of Telaria. Telaria does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of Telaria on any CDnow Subsidiary. matter. (iv) As of the Effective Timedate of this Agreement, each CDnow Warrant willthere is no stockholder rights plan, by “poison pill” antitakeover plan or similar device in effect to which Telaria or any of its termsSubsidiaries is subject, provide the holder thereof with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofparty or otherwise bound.

Capital Structure. (a) The authorized capital stock of CDnow the Company consists of 200,000,000 300,000,000 shares of CDnow Company Common Stock, without par value, Stock and 50,000,000 shares of preferred stock, without $0.01 par value per share (together with the CDnow Common “Company Preferred Stock, the "CDnow Capital Stock"”). At the close of business on July 9December 14, 19992012, (i) 30,211,473 177,807,713 shares of CDnow Company Common Stock were issued and outstanding, including 17,400 shares of Company Restricted Stock, (ii) no shares of CDnow Common Company Preferred Stock were held by CDnow in its treasury issued and outstanding, (iii) 1,511,934 additional 8,000,000 shares of CDnow Company Common Stock were reserved for issuance pursuant to the CDnow terms of outstanding awards granted pursuant to the Company Stock Plans Plans, and (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04iv) outstanding at the close of business on July 12, 1999, together with the number of 7,982,000 shares of CDnow Company Common Stock subject to each such CDnow Employee were available for grant under the Company Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in the CDnow Disclosure Letter, at the close of business on July 12, 1999, no shares of capital stock or other voting securities of CDnow were issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rightsPlans. All issued and outstanding shares of CDnow Capital Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable non-assessable, and not subject to or issued in violation no class of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision capital stock of the PBCL, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) Company is entitled to which CDnow is a party or otherwise boundpreemptive rights. There are not any no outstanding bonds, debentures, notes or other indebtedness of CDnow the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters matter on which holders of CDnow shares of Company Common Stock may vote vote. As of the date of this Agreement, there are no Company Options outstanding. Section 4.3(a) of the Company Disclosure Letter, sets forth for each holder of Company Restricted Stock outstanding as of the date of this Agreement ("Voting CDnow Debt"A) the name with respect to the holder of Company Restricted Stock, (B) the number of shares of outstanding Company Restricted Stock, (C) the date of grant of such Company Restricted Stock, and (D) the vesting schedule for such Company Restricted Stock. There are no other rights, options, stock or unit appreciation rights, phantom stock or units, restricted stock units, dividend equivalents or similar rights with respect to the Company Common Stock or Company Partnership Units other than the Company Options, Company Restricted Stock and Company Partnership Units disclosed on Section 4.3(a) of the Company Disclosure Letter. Each grant of a Company Option was duly authorized no later than the date on which the grant of such Company Option was by its terms to be effective by all necessary corporate action, including, as applicable, approval by the Company’s board of directors (the “Company Board”), or a committee thereof, and any required stockholder approval by the necessary number of votes or written consents, and each Company Option and Company Restricted Stock grant was made in accordance in all material respects with the terms of the applicable Company Stock Plan and applicable Law. The per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable grant date. Immediately prior to the Closing, the Company will provide to Parent a complete and correct list that contains the information required to be provided in Section 4.3(a) of the Company Disclosure Letter, that is correct and complete as of the Closing Date; provided, however, delivery of such updated schedule shall not cure any breach of this Section 4.3 for purposes of determining whether the applicable closing condition has been satisfied. (b) All of the outstanding shares of capital stock of each of the Company Subsidiaries that is a corporation are duly authorized, validly issued, fully paid and nonassessable. All equity interests in each of the Company Subsidiaries that is a partnership or limited liability company are duly authorized and validly issued. All shares of capital stock of (or other ownership interests in) each of the Company Subsidiaries that may be issued upon exercise of outstanding options or exchange rights are duly authorized and, upon issuance will be validly issued, fully paid and nonassessable. Except as set forth above or in Section 4.1(c) of the CDnow Company Disclosure Letter, the Company owns, directly or indirectly, all of the issued and outstanding capital stock and other ownership interests of each of the Company Subsidiaries, free and clear of all encumbrances other than statutory or other liens for Taxes or assessments which are not yet due or delinquent or the validity of which is being contested in good faith by appropriate proceedings and for which adequate reserves are being maintained, and there are not any no existing options, warrants, rightscalls, subscriptions, convertible securities or other securities, agreements, commitments or obligations of any character relating to the outstanding capital stock or other securities of any Company Subsidiary or which would require any Company Subsidiary to issue or sell any shares of its capital stock, ownership interests or securities convertible into or exchangeable for shares of its capital stock or ownership interests. (c) Except as set forth in this Section 4.3 or in Section 4.3(a) of the Company Disclosure Letter, as of the date of this Agreement, there are no securities, "phantom" stock options, warrants, calls, rights, stock appreciation rights, stock-based performance units, commitments, Contractsagreements, rights of first refusal, arrangements or undertakings of any kind to which CDnow the Company or any CDnow Company Subsidiary is a party or by which any of them is bound (i) bound, obligating CDnow the Company or any CDnow Company Subsidiary to issue, deliver or sellsell or create, or cause to be issued, delivered or soldsold or created, additional shares of capital Company Common Stock, shares of Company Preferred Stock or other equity securities or phantom stock or other contractual rights the value of which is determined in whole or in part by the value of any equity interests in, security of the Company or any security convertible of the Company Subsidiaries or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow obligating the Company or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Company Subsidiary to issue, grant, extend or enter into any such security, option, warrant, call, right, security, commitment, Contractagreement, right of first refusal, arrangement or undertaking or (iiiundertaking. Except as set forth in Section 4.3(c) that give any person of the right to receive any economic benefit or right similar to or derived from Company Disclosure Letter, as of the economic benefits and rights accruing to holders date of CDnow Capital Stock. There this Agreement, there are not any no outstanding contractual obligations of CDnow the Company or any CDnow Company Subsidiary to repurchase, redeem or otherwise acquire any shares of Company Common Stock, shares of Company Preferred Stock or other equity securities of the Company or any Company Subsidiary (other than in satisfaction of withholding Tax obligations pursuant to certain awards outstanding under the Company Stock Plans in the event the grantees fail to satisfy withholding Tax obligations). Neither the Company nor any Company Subsidiary is a party to or bound by any agreements or understandings concerning the voting (including voting trusts and proxies) of any capital stock of CDnow the Company or any CDnow Subsidiary. As of the Effective Time, each CDnow Warrant will, by its terms, provide Company Subsidiaries. (d) All dividends or other distributions on the holder thereof with the right to receive the amount shares of Merger Consideration such holder would Company Common Stock and Company Preferred Stock and any material dividends or other distributions on any securities of any Company Subsidiary which have received in the Merger had such CDnow Warrant been exercised immediately authorized or declared prior to the Effective Time date hereof have been paid in full (except to the extent such dividends have been publicly announced and no other consideration) upon exercise thereofare not yet due and payable).

Capital Structure. (a) The authorized capital stock of CDnow the Company consists of 200,000,000 40,000,000 shares of CDnow Common Stock, without par value, and 50,000,000 40,000 shares of preferred stock, without par value (together with the CDnow Common Preferred Stock, the "CDnow Capital Stock"). At the close of business on July 918, 19992019, (i) 30,211,473 15,227,562 shares of CDnow Common Stock were issued and outstanding, ; (ii) no 40,000 shares of CDnow Common Preferred Stock were held by CDnow in its treasury issued and outstanding; (iii) 1,511,934 additional 7,188,036 shares of CDnow Common Stock were reserved for issuance pursuant to the CDnow Stock Plans Warrants; (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04iv) outstanding at the close of business on July 12, 1999, together with the number of 6,359,300 shares of CDnow Common Stock subject were reserved for issuance pursuant to each such CDnow Employee Stock Option the conversion of Preferred Stock; and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire (v) 459,027 shares of CDnow Common Stock (were issuable upon the "CDnow Warrants") vesting or settlement of outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereofRSUs. Except as set forth above or in on Section 4.3(a) of the CDnow Company Disclosure LetterSchedule, all outstanding shares of Common Stock and Preferred Stock are, and, at the close time of business on July 12issuance, 1999, no all shares of capital stock or other voting securities of CDnow were issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights. All outstanding shares of CDnow Capital Common Stock are, and all such shares that may be issued prior to upon the Effective Time vesting or settlement of any RSUs or Warrants will be when issuedbe, duly authorized, validly issued, fully paid and nonassessable and nonassessable, not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision right. (b) Except as set forth in Section 4.3(a) and in Section 4.3(b) of the PBCLCompany Disclosure Schedule, there are not issued, reserved for issuance or outstanding, and there are not any outstanding obligations of the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, (i) any capital stock of the Company or any Company Subsidiary or any securities of the Company or any Company Subsidiary convertible into or exchangeable or exercisable for shares of capital stock or voting securities of, or other equity interests in, the CDnow CharterCompany or any Company Subsidiary, (ii) any warrants, calls, options or other rights to acquire from the Company or any Company Subsidiary, or any other obligation of the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, any capital stock or voting securities of, or other equity interests in, the CDnow By-laws Company or any Contract Company Subsidiary or (as defined iii) any rights issued by, or other obligations of, the Company or any Company Subsidiary that are linked in Section 3.05) any way to which CDnow is a party the price of any class of capital stock of the Company or otherwise boundany shares of capital stock of any Company Subsidiary, the value of the Company, any Company Subsidiary or any part of the Company or any Company Subsidiary or any dividends or other distributions declared or paid on any shares of capital stock of the Company or any Company Subsidiary. There are not any outstanding obligations of the Company or any of the Company Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock or voting securities or other equity interests of the Company or any Company Subsidiary or any securities, interests, warrants, calls, options or other rights referred to in clause (i), (ii) or (iii) of the immediately preceding sentence. There are no debentures, bonds, debentures, notes or other indebtedness Indebtedness of CDnow the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow Common Stock the Company’s shareholders may vote vote. ("Voting CDnow Debt"). c) Except as set forth above or in on Section 4.3(c) of the CDnow Company Disclosure LetterSchedule, there are not any options, warrants, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings none of any kind to which CDnow the Company or any CDnow Subsidiary of the Company Subsidiaries is a party or by which any of them is bound to (i) obligating CDnow any agreement with respect to the voting or any CDnow Subsidiary to issue, deliver or sellissuance of, or cause to be issuedrestricting the transfer of, delivered or soldproviding registration rights with respect to, additional shares of any capital stock or voting securities of, or other equity interests in, the Company or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow any agreement pursuant to which any Person is entitled to elect, designate or nominate any CDnow Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stock. There are not any outstanding contractual obligations of CDnow or any CDnow Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow or any CDnow Subsidiary. As director of the Effective Time, each CDnow Warrant will, by its terms, provide the holder thereof with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofCompany.

Capital Structure. (a) The authorized capital stock of CDnow the Company consists of 200,000,000 shares of CDnow Company Common Stock, without par value, Stock and 50,000,000 70,000,000 shares of preferred stock, without par value (together with the CDnow Common Company Preferred Stock, the "CDnow Capital Stock"). At the close of business on July 9, 1999, (i) 30,211,473 129,849,690 shares of CDnow Company Common Stock were are issued and outstanding, (ii) no 58,244,308 shares of CDnow Common Company Preferred Stock were held by CDnow in its treasury are issued and outstanding and (iii) 1,511,934 additional 15,000,000 shares of CDnow Company Common Stock were are reserved and available for issuance pursuant to the CDnow Company Stock Plans (as defined in Section 8.04(d))Plan, of which 13,317,334 shares are reserved and available for issuance upon exercise of outstanding Company Stock Options. As of the date hereof, no Company Stock Options, whether vested or unvested, are currently exercisable by the holders thereof. The CDnow Stockholder is the sole and exclusive owner of the Company Common Stock and Company Preferred Stock. (b) Section 3.03(b) of the Company Disclosure Letter sets forth a complete true and correct list as of the date hereof of (i) the holder of each Company Stock Option and (ii) the number of Company Stock Options held by such holder. The Option Payment Schedule will set forth, as of the Effective Time, (i) a list of all CDnow Employee Company Stock Options Options, (as defined in Section 8.04ii) outstanding at the close holder of business on July 12such Company Stock Option, 1999, together with the number of shares of CDnow Common Stock subject to each such CDnow Employee Stock Option and (iii) the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list for such Company Stock Option, (iv) whether such Company Stock Option is vested or unvested as of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in the CDnow Disclosure Letter, at the close of business on July 12, 1999, no shares of capital stock or other voting securities of CDnow were issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights. All outstanding shares of CDnow Capital Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject (v) the amount of Cash Option Consideration payable to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the PBCL, the CDnow Charter, the CDnow By-laws or any Contract each holder. (as defined in Section 3.05c) to which CDnow is a party or otherwise bound. There are not any bonds, debentures, notes or other indebtedness of CDnow having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow Common Stock may vote ("Voting CDnow Debt"). Except as otherwise set forth above or in the CDnow Disclosure Letterthis Section 3.03, there are not any (i) no outstanding shares of capital stock of, or other equity or voting interests in, the Company, (ii) no outstanding securities of the Company convertible into or exchangeable for shares of capital stock of, or other equity or voting interests in, the Company, (iii) no outstanding options, warrants, rights, convertible rights or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements other commitments or undertakings of any kind agreements to which CDnow acquire from the Company or any CDnow Subsidiary is a party of the Company, or by which any of them is bound (i) obligating CDnow that obligate the Company or any CDnow Subsidiary of the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of any capital stock of, or other equity or voting interests in, or any security securities convertible or exercisable for into or exchangeable into any for shares of capital stock of of, or other equity interest or voting interests in, CDnow the Company, (iv) no obligations of the Company or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary of its Subsidiaries to issue, grant, extend or enter into any such optionsubscription, warrant, call, right, securityconvertible or exchangeable security or other similar agreement or commitment relating to any capital stock of, commitmentor other equity or voting interests in, Contractthe Company and (v) no other obligations by the Company or any of its Subsidiaries to make any payments based on the price or value of any of the foregoing or dividends paid thereon (the items in clauses (i), arrangement or undertaking or (ii), (iii), (iv) that give any person and (v) being referred to collectively as “Company Securities”). None of the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stock. There are not any outstanding contractual obligations of CDnow Company or any CDnow Subsidiary of its Subsidiaries is a party to repurchaseany stockholders’ agreement, redeem voting trust agreement, registration rights agreement or otherwise acquire other similar agreement or understanding relating to any Company Securities or any other agreement relating to the disposition, voting or dividends with respect to any Company Securities. All outstanding shares of capital stock Company Common Stock and Company Preferred Stock have been duly authorized and validly issued and are fully paid, nonassessable and free of CDnow or any CDnow Subsidiary. As of the Effective Time, each CDnow Warrant will, by its terms, provide the holder thereof with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofpreemptive rights.

Capital Structure. (i) The authorized capital stock of CDnow the Company consists of 200,000,000 350,000,000 shares of CDnow Company Common Stock, without par value, Stock and 50,000,000 20,000,000 shares of preferred stock, without par value (together with $0.01 per share, of the CDnow Common Company, of which 6,900,000 shares are classified and designated as Company Series A Preferred Stock, the "CDnow Capital Stock"). At As of the close of business on July 9October 25, 19992023, (A) (i) 30,211,473 141,331,218 shares of CDnow Company Common Stock were issued and outstanding (including 206,817 shares of Company Common Stock subject to unvested Company Restricted Stock Awards), (ii) 6,900,000 shares of Company Series A Preferred Stock were issued and outstanding, (iiiii) no 4,630,723 shares of CDnow Common Stock were held by CDnow in its treasury and (iii) 1,511,934 additional shares of CDnow Company Common Stock were reserved for issuance pursuant to future awards under the CDnow Stock Plans Company Equity Plan, (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04iv) outstanding at the close of business on July 12, 1999, together with the number of 1,971,896 shares of CDnow Company Common Stock were subject to each such CDnow Employee Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock outstanding Company Performance Share Awards (the "CDnow Warrants"assuming maximum performance), (v) outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in the CDnow Disclosure Letter, at the close of business on July 12, 1999, no shares of capital stock or Company Common Stock were held by any Subsidiaries of the Company and (B) no Company Partnership Units (including Company Partnership Preferred Units) were issued and outstanding, other voting securities than such Partnership Units issued to the Company and its wholly owned Subsidiaries in such amounts set forth on Section 3.1(b)(i) of CDnow were issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rightsthe Company Disclosure Letter. All outstanding shares of CDnow Capital Company Common Stock areand Company Series A Preferred Stock, and all such shares that may be outstanding Company Partnership Units have been duly authorized and validly issued prior to the Effective Time will be when issued, duly authorized, validly issued, and are fully paid and nonassessable non-assessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the PBCL, the CDnow Charter, the CDnow By-laws or any Contract rights. (as defined in Section 3.05ii) to which CDnow is a party or otherwise bound. There are not any No bonds, debentures, notes or other indebtedness of CDnow Indebtedness having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow Common Stock stockholders may vote ("“Voting CDnow Debt"). Except as ”) of the Company or any of its Subsidiaries is issued or outstanding. (iii) As of the close of business on October 25, 2023, except for (A) this Agreement and (B) the outstanding Company Restricted Stock Awards and Company Performance Share Awards in the amounts set forth above or in the CDnow Disclosure LetterSection 3.1(b)(i)), there are not any no options, warrants, calls, rights, convertible commitments or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings agreements of any kind character to which CDnow or any CDnow Subsidiary the Company is a party or by which any of them it is bound (i) obligating CDnow or any CDnow Subsidiary the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow or any CDnow Subsidiary or any Voting CDnow Debt, (ii) Debt or stock appreciation rights of the Company or obligating CDnow or any CDnow Subsidiary the Company to issue, grant, extend or enter into any such option, warrant, call, right, securitycommitment or agreement. As of the close of business on October 25, commitment2023, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stock. There there are not any no outstanding contractual obligations of CDnow or any CDnow Subsidiary the Company, except as set forth on Section 3.1(b)(iii) of the Company Disclosure Letter, (1) other than in respect of Company Equity Awards under the Company Equity Plan, to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow the Company or (2) pursuant to which the Company is or could be required to register shares of Company Common Stock or other securities under the U.S. Securities Act of 1933, as amended (the “Securities Act”). (iv) As of the close of business on October 25, 2023, except for (A) this Agreement and (B) the outstanding Company Restricted Stock Awards and Company Performance Share Awards in the amounts set forth in Section 3.1(b)(i)), there are no options, warrants, calls, rights, commitments or agreements of any character to which any Subsidiary of the Company is a party or by which any such Subsidiary is bound obligating the Company or any CDnow SubsidiarySubsidiary of the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or any Voting Debt or stock appreciation rights of the Company or of any Subsidiary of the Company or obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. As of the Effective Timeclose of business on October 25, each CDnow Warrant will2023, by there are no outstanding contractual obligations of any of the Company’s Subsidiaries, except as set forth on Section 3.1(b)(iii) of the Company Disclosure Letter, (1) other than in respect of Company Equity Awards under the Company Equity Plan, to repurchase, redeem or otherwise acquire any shares of capital stock of the Company or any of its terms, provide Subsidiaries or (2) pursuant to which the holder thereof with Company or any of its Subsidiaries is or could be required to register shares of Company Common Stock or other securities under the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofSecurities Act.

Capital Structure. The authorized capital stock of CDnow the Company consists of 200,000,000 10,000,000 shares of CDnow Company Common Stock, without par value, Stock and 50,000,000 2,500,000 shares of preferred stock, without par value $0.01 per share (the “Company Preferred Stock” and, together with the CDnow Company Common Stock, the "CDnow “Company Capital Stock"”). At , of which as of the close date of business on July 9, 1999this Agreement, (ia) 30,211,473 6,748,056 shares of CDnow Company Common Stock and no shares of Company Preferred Stock were issued and outstanding, (iib) no 99,200 shares of CDnow Company Common Stock were held by CDnow the Company in its treasury and (iiic) 1,511,934 920,750 shares of Company Common Stock were subject to outstanding Options and 304,000 additional shares of CDnow Company Common Stock were reserved for issuance pursuant to the CDnow Company Stock Plans (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04) outstanding at the close of business on July 12, 1999, together with the number of shares of CDnow Common Stock subject to each such CDnow Employee Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereofPlans. Except as set forth above or in above, as of the CDnow Disclosure Letter, at the close date of business on July 12, 1999this Agreement, no shares of capital stock or other voting securities of CDnow the Company were issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights. All outstanding shares of CDnow Capital Company Common Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the PBCLDGCL, the CDnow Company Charter, the CDnow Company By-laws or any Contract (as defined in Section 3.05) to which CDnow the Company is a party or otherwise bound. There are not any bonds, debentures, notes or other indebtedness of CDnow the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow Company Common Stock may vote ("“Voting CDnow Company Debt"”). Except as set forth above or in above, as of the CDnow Disclosure Letterdate of this Agreement, there are not any options, warrants, rights, convertible or exchangeable securities, "“phantom" ” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which CDnow the Company or any CDnow Company Subsidiary is a party or by which any of them is bound (i) obligating CDnow the Company or any CDnow Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow the Company or of any CDnow Company Subsidiary or any Voting CDnow Company Debt, (ii) obligating CDnow the Company or any CDnow Company Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing occurring to holders of CDnow Capital Company Common Stock. There As of the date of this Agreement, there are not any outstanding contractual obligations of CDnow the Company or any CDnow Company Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow the Company or any CDnow Company Subsidiary. As Following the consummation of the Effective TimeMerger, each CDnow Warrant willthere will not be outstanding any rights, by its termswarrants, provide options or other securities entitling the holder holders thereof with to purchase, acquire or otherwise receive any shares of the right to receive capital stock of the amount of Merger Consideration Company or any Company Subsidiary (or any other securities exercisable for or convertible into such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofShares).

Capital Structure. (i) The authorized capital stock of CDnow Parent consists of 200,000,000 700,000,000 shares of CDnow Parent Common Stock, without par value, Stock and 50,000,000 shares of preferred stockstock of Parent. As of June 30, without par value 2015, there were outstanding (together with the CDnow A) 314,640,137 shares of Parent Common Stock, (B) Parent Stock Options to purchase an aggregate of 15,655,682 shares of Parent Common Stock (of which Options to purchase an aggregate of 9,682,286 shares of Parent Common Stock were exercisable), (C) Parent Restricted Stock Units with respect to an aggregate of 9,705,417 shares of Parent Common Stock, (D) no shares of preferred stock, and (E) 12,458,753 shares of Parent Common Stock reserved for issuance under the "CDnow Capital Stock"). At SunEdison, Inc. 2015 Long-Term Incentive Plan, 558,000 shares of Parent Common Stock reserved for issuance under the SunEdison, Inc. 2015 Non-Employee Director Incentive Plan, and 2,000,000 shares of Parent Common Stock reserved for issuance under the SunEdison, Inc. Employee Stock Purchase Plan. (ii) As of the close of business on July 917, 19992015, (iexcept as set forth in this Section 3.02(b) 30,211,473 shares and except for changes since such date resulting from the exercise of CDnow Options to purchase Parent Common Stock were issued and outstandingor the settlement of restricted stock units, (ii) in each case outstanding on such date, there are no shares of CDnow Common Stock were held by CDnow in its treasury and (iii) 1,511,934 additional shares of CDnow Common Stock were issued, reserved for issuance pursuant to the CDnow Stock Plans or outstanding (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04A) outstanding at the close of business on July 12, 1999, together with the number of shares of CDnow Common Stock subject to each such CDnow Employee Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in the CDnow Disclosure Letter, at the close of business on July 12, 1999, no shares of capital stock or other voting securities of CDnow were issuedor other equity interests in Parent, reserved (B) securities of Parent convertible into or exchangeable for issuance shares of capital stock or outstanding. There are no outstanding CDnow other voting securities of or other equity interests in Parent, (C) warrants, calls, Options or other rights to acquire from Parent, or other obligation of Parent to issue, any shares of capital stock, voting securities or securities convertible into or exchangeable for capital stock or other voting securities of or other equity interests in Parent or (D) restricted shares, stock appreciation rights. , performance units, contingent value rights, phantom stock or similar securities or rights issued or granted by Parent or any of its subsidiaries that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any shares of capital stock or other voting securities of or other equity interests in Parent. (iii) As of the date of this Agreement, no bonds, debentures, notes or other indebtedness of Parent or any of its subsidiaries having the right to vote (or which are convertible into or exercisable for securities having the right to vote) (collectively, “Parent Voting Debt”) on any matters on which Parent stockholders may vote are issued or outstanding nor are there any outstanding Options obligating Parent or any of its subsidiaries to issue or sell any Parent Voting Debt or to grant, extend or enter into any Option with respect thereto. (iv) All of the issued and outstanding shares of CDnow Capital Parent Common Stock are, and all such shares that may be issued prior reserved for issuance will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to the Effective Time will be when issuedwhich they are issuable, duly authorized, validly issued, fully paid and nonassessable nonassessable, including shares which constitute a portion of the Merger Consideration and not any Parent Common Stock issuable upon conversion of the Convertible Note Consideration. Sufficient shares of Parent Common Stock have been reserved for the issuance of the maximum number of shares of Parent Common Stock issuable upon conversion of the Convertible Notes. All of the outstanding shares of capital stock, membership interests, partnership interests, voting securities or other ownership interests of each subsidiary of Parent are duly authorized, validly issued, fully paid and non-assessable and are owned, beneficially and of record, by Parent or a subsidiary of Parent, free and clear of any Liens. All of the shares of capital stock, membership interests, partnership interests, voting securities or other ownership interests of each Parent Joint Venture that are held by Parent or any subsidiary of Parent are duly authorized, validly issued, fully paid and non-assessable and are owned, beneficially and of record, by Parent or such subsidiary of Parent. The Convertible Notes, including the Convertible Notes which constitute a portion of the Merger Consideration, have been duly authorized and, when executed and authenticated in accordance with the provisions of the Indenture, will be valid and binding obligations of Parent, enforceable against Parent in accordance with their terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally and equitable principles of general applicability, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or issued in violation equity), and will be entitled to the benefits of any purchase optionthe Indenture. There are no voting trusts, call optionproxies or other commitments, right of first refusalunderstandings, preemptive right, subscription right restrictions or arrangements to which Parent or any similar right under any provision of the PBCL, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow its subsidiaries is a party in favor of any person other than Parent or otherwise bound. There are not any bondsa subsidiary wholly-owned, debenturesdirectly or indirectly, notes by Parent with respect to the voting of or other indebtedness of CDnow having the right to vote (participate in dividends or convertible into, or exchangeable for, securities having the right to vote) other earnings on any matters on which holders of CDnow Common Stock may vote ("Voting CDnow Debt"). Except as set forth above or in the CDnow Disclosure Lettercapital stock, there are not any optionsmembership interests, warrantspartnership interests, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which CDnow or any CDnow Subsidiary is a party or by which any of them is bound (i) obligating CDnow or any CDnow Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock voting securities or other equity ownership interests inof Parent, any subsidiary of Parent or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stock. There are not any outstanding contractual obligations of CDnow or any CDnow Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow or any CDnow Subsidiary. As of the Effective Time, each CDnow Warrant will, by its terms, provide the holder thereof with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofParent Joint Ventures.

Capital Structure. The As of the date of this Agreement, the authorized capital stock of CDnow the Company consists of 200,000,000 (a) 600,000,000 shares of CDnow Company Common Stock, without par value, Stock and (b) 50,000,000 shares of preferred stock, without par value $0.01 per share (“Company Preferred Stock” and, together with the CDnow Company Common Stock, the "CDnow “Company Capital Stock"”). At the close of business on July 9May 13, 1999, 2016: (i) 30,211,473 206,360,672 shares of CDnow Company Common Stock were issued and outstanding, including 2,619,588 shares of restricted Company Common Stock issued pursuant to the Company Stock Plan; (ii) no shares of CDnow Common Company Preferred Stock were held by CDnow in its treasury issued and outstanding; (iii) 1,511,934 additional 16,259,811 shares of CDnow Company Common Stock were reserved for issuance pursuant to the CDnow Company Stock Plans Plan; and (as defined in Section 8.04(d))iv) no Voting Debt of the Company was issued and outstanding. The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04) All outstanding at the close of business on July 12, 1999, together with the number of shares of CDnow Company Common Stock are validly issued, fully paid and non-assessable and are not subject to each such CDnow Employee Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in the CDnow Disclosure Letter, at the close of business on July 12, 1999, no shares of capital stock or other voting securities of CDnow were issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation preemptive rights. All outstanding shares of CDnow Capital Company Common Stock arehave been issued and granted in compliance in all material respects with (i) applicable securities Laws and other applicable Law and (ii) all requirements set forth in applicable contracts. As of the close of business on May 13, and all such shares that may be issued prior 2016, there are no outstanding options, warrants or other rights to subscribe for, purchase or acquire from the Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right Company or any similar right under of its Subsidiaries any provision capital stock of the PBCLCompany or securities convertible into or exchangeable or exercisable for capital stock of the Company (and the exercise, the CDnow Charterconversion, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise bound. There are not any bondspurchase, debentures, notes exchange or other indebtedness similar price thereof). All outstanding shares of CDnow having capital stock of the right to vote (or convertible intoSubsidiaries of the Company that are owned by the Company, or exchangeable fora direct or indirect wholly-owned Subsidiary of the Company, securities having the right to vote) on any matters on which holders are free and clear of CDnow Common Stock may vote ("Voting CDnow Debt")all Encumbrances, other than Permitted Encumbrances. Except as set forth above in this Section 4.2, and except for stock grants or other awards granted in the CDnow Disclosure Letteraccordance with Section 6.1(b)(ii), there are not outstanding: (1) no shares of Company Capital Stock, (2) no Voting Debt, (3) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable or exercisable for shares of Company Capital Stock or Voting Debt, and (4) no options, warrants, calls, rights (including preemptive rights), convertible commitments or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind agreements to which CDnow the Company or any CDnow Subsidiary of the Company is a party or by which any of them it is bound (i) in any case obligating CDnow the Company or any CDnow Subsidiary of the Company to issue, deliver deliver, sell, purchase, redeem or sellacquire, or cause to be issued, delivered delivered, sold, purchased, redeemed or soldacquired, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow or any CDnow Subsidiary Company Capital Stock or any Voting CDnow DebtDebt or other voting securities of the Company, (ii) or obligating CDnow the Company or any CDnow Subsidiary of the Company to issue, grant, extend or enter into any such option, warrant, call, right, securitycommitment or agreement. Other than the Existing Voting Agreement, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stock. There there are not any outstanding contractual obligations stockholder agreements, voting trusts or other agreements to which the Company is a party or by which it is bound relating to the voting of CDnow or any CDnow Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow or any CDnow Subsidiarythe Company Capital Stock. As of the Effective Timedate of this Agreement, each CDnow Warrant willthe Company has no (x) material joint venture or other similar material equity interests in any Person or (y) obligations, by whether contingent or otherwise, to consummate any material additional investment in any Person other than its terms, provide the holder thereof with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofSubsidiaries.

Capital Structure. The authorized capital stock (a) Section 3.4 of CDnow consists the STEAG Disclosure Schedule sets forth for each of 200,000,000 shares of CDnow Common Stock, without par value, and 50,000,000 shares of preferred stock, without par value (together with the CDnow Common Stock, the "CDnow Capital Stock"). At the close of business on July 9, 1999, STEAG Subsidiaries: (i) 30,211,473 where such concept is recognized under applicable legal and accounting principles, the number of authorized shares or other units of CDnow Common Stock were issued and outstanding, each class or series of capital stock; (ii) no the number of shares or other units of CDnow Common Stock were held by CDnow in its treasury each class or series of capital stock which are issued and outstanding as of the date of this Agreement; (iii) 1,511,934 additional shares of CDnow Common Stock were reserved for issuance pursuant to where applicable, the CDnow Stock Plans registered share capital; (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04iv) outstanding at the close of business on July 12, 1999, together with the number of shares of CDnow Common Stock subject to other units of each class or series of capital stock, if any, which are held in the treasury of such CDnow Employee Stock Option and entity as of the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list date of all warrants to acquire shares of CDnow Common Stock this Agreement; (the "CDnow Warrants"v) outstanding at the close of business on July 12, 1999 together with the number of shares or other units of CDnow Common Stock each class or series of capital stock, if any, which are reserved for issuance, indicating each particular reservation; and (vi) the aggregate number of shares or other units of each class or series of capital stock, if any, subject to each such warrant and employee stock options or other rights to purchase or receive capital stock granted under any stock option or other stock-based employee or non-employee director benefit plans. (b) There are no authorized, issued, reserved for issuance, or outstanding, (i) securities of STEAG or any of the exercise price thereof. Except as set forth above STEAG Subsidiaries convertible into or in the CDnow Disclosure Letter, at the close of business on July 12, 1999, no exchangeable for shares of capital stock or other voting securities of CDnow were issuedthe STEAG Subsidiaries, reserved or (ii) warrants, calls, options, or other rights to acquire from the STEAG Subsidiaries, or any obligation of any of the STEAG Subsidiaries to issue, any shares of capital stock or voting securities or securities convertible into or exchangeable or exercisable for issuance capital stock or outstanding. There voting securities of the STEAG Subsidiaries; and, except for this Agreement, there are no outstanding CDnow stock appreciation rights. All outstanding shares of CDnow Capital Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision obligations of the PBCLSTEAG Subsidiaries to repurchase, the CDnow Charterredeem, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise bound. There are not acquire any bonds, debentures, notes such securities or other indebtedness of CDnow having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow Common Stock may vote ("Voting CDnow Debt"). Except as set forth above or in the CDnow Disclosure Letter, there are not any options, warrants, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which CDnow or any CDnow Subsidiary is a party or by which any of them is bound (i) obligating CDnow or any CDnow Subsidiary to issue, deliver deliver, or sell, or cause to be issued, delivered delivered, or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stock. There are not any outstanding contractual obligations of CDnow or any CDnow Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow or any CDnow Subsidiary. As of the Effective Time, each CDnow Warrant will, by its terms, provide the holder thereof with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofsecurities.

Capital Structure. The (a) Immediately prior to the Closing, the authorized capital stock of CDnow consists the Company shall consist of 200,000,000 (i) 500,000 shares of CDnow Class A Common Stock, without $0.01 par value, and 50,000,000 of which 316,399 shares of preferred stock, without par value (together with the CDnow Common Stock, the "CDnow Capital Stock"). At the close of business on July 9, 1999, (i) 30,211,473 shares of CDnow Common Stock were issued and will be outstanding, (ii) no 200,000 shares of CDnow Class B Common Stock were held by CDnow in its treasury and Stock, $0.01 par value ("Class B Common Stock"), of which 10,000 shares will be outstanding, (iii) 1,511,934 additional 75,000 shares of CDnow Common Stock were reserved for issuance pursuant Series A Preferred Stock, $0.01 par value, ("Series A Preferred Stock") of which 40,000 shares will be outstanding and (iv) 20,000 shares of Series B Preferred Stock, $0.01 par value, of which no shares will be outstanding. Immediately prior to the CDnow Stock Plans (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list Closing, all of all CDnow Employee Stock Options (as defined in Section 8.04) outstanding at the close of business on July 12, 1999, together with the number of shares of CDnow Common Stock subject to each such CDnow Employee Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in the CDnow Disclosure Letter, at the close of business on July 12, 1999, no shares of capital stock or other voting securities of CDnow were issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights. All outstanding shares of CDnow Capital Class A Common Stock, Class B Common Stock are, and all such shares that may be issued prior to the Effective Time Series A Preferred Stock will have been duly authorized and will be when issued, duly authorized, validly issued, fully paid and nonassessable nonassessable. The ownership of Class A Common Stock, the Class B Common Stock and the Series A Preferred immediately prior to the transactions contemplated hereby is as set forth on Schedule 3.03(a) hereto. The Acquired Securities have been duly authorized and, when issued and delivered in accordance with the terms of this Agreement, will be validly issued, fully paid and nonassessable, and the issuance thereof will not have been subject to any preemptive rights or issued made in violation of any purchase optionApplicable Law. (b) Immediately prior to the Closing, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of except for the PBCL, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise bound. There are not any bonds, debentures, notes or other indebtedness of CDnow having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow Common Stock may vote ("Voting CDnow Debt"). Except as set forth above or in the CDnow Disclosure LetterSeries A Preferred Stock, there are not any will be (i) no outstanding options, warrants, agreements, conversion rights, convertible or exchangeable securities, "phantom" stock exchange rights, stock appreciation rightspreemptive rights or other rights (whether contingent or not) to subscribe for, stock-based performance units, commitments, Contracts, arrangements purchase or undertakings of acquire any kind to which CDnow issued or any CDnow Subsidiary is a party or by which any of them is bound (i) obligating CDnow or any CDnow Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional unissued shares of capital stock or other equity interests in, of the Company or any security convertible or exercisable for or exchangeable into any capital stock subsidiary of or other equity interest inthe Company, CDnow or any CDnow Subsidiary or any Voting CDnow Debt, and (ii) obligating CDnow no restrictions upon, or Contracts or understandings of the Company or any CDnow Subsidiary subsidiary of the Company, or, to issuethe knowledge of the Company, grant, extend Contracts or enter into understandings of any such option, warrant, call, right, security, commitment, Contract, arrangement other Person with respect to the voting or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders transfer of CDnow Capital Stock. There are not any outstanding contractual obligations of CDnow or any CDnow Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow the Company or any CDnow Subsidiary. As subsidiary. (c) The shares of Class B Common Stock to be issued upon conversion of the Effective TimeAcquired Securities have been duly authorized and adequately reserved in contemplation of the conversion of the Series B Preferred Stock and, each CDnow Warrant when issued and delivered in accordance with the terms of the Certificate of Designation of the Series B Preferred Stock, will be validly issued, and will be fully paid and nonassessable, and the issuance thereof will not have been subject to any preemptive rights or made in violation of Applicable Law which would likely have a material adverse effect on such issuance. (d) The holders of the Series B Preferred Stock will, by its termsupon the issuance thereof, provide have the holder thereof with the right to receive the amount of Merger Consideration such holder would have received rights set forth in the Merger had such CDnow Warrant been exercised immediately prior Certificate of Designation of the Series B Preferred Stock (subject to the Effective Time limitations and qualifications set forth therein and under the Nevada Revised Statutes). (and no other consideratione) upon exercise thereofThe issuance of the Series B Preferred Stock contemplated by this Agreement will not cause any anti-dilution provisions contained in any outstanding securities of the Company to become applicable to such issuance.

Capital Structure. The authorized capital stock of CDnow the Company consists of 200,000,000 50,000,000 shares of CDnow Company Common Stock, without par valuevalue $0.05 per share, and 50,000,000 no shares of preferred stock, without par value (together with the CDnow Common Stock, the "CDnow Capital Stock"). At the close of business on July 9March 25, 19992000, (ia) 30,211,473 13,826,268 shares of CDnow Company Common Stock were issued and outstanding, (iib) no shares of CDnow Company Common Stock were held by CDnow the Company in its treasury treasury, (c) 2,530,474 shares of Company Common Stock were reserved for issuance pursuant to outstanding Stock Option Plans and (iiid) 1,511,934 additional 252,260 shares of CDnow Company Common Stock were reserved for issuance pursuant to the CDnow Stock Plans (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04) outstanding at the close of business on July 12, 1999, together with the number of shares of CDnow Common Stock subject to each such CDnow Employee Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereofPurchase Plan. Except as set forth above or in the CDnow Disclosure LetterFiled Company SEC Documents, at the close of business on July 12March 25, 19992000, no shares of capital stock or other voting securities of CDnow the Company were issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights. All outstanding shares of CDnow Capital Stock capital stock of the Company are, and all such shares that which may be issued prior pursuant to the Effective Time Stock Option Plans will be be, when issuedissued in accordance with the terms thereof, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the PBCL, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise boundrights. There are not any no bonds, debentures, notes or other indebtedness of CDnow the Company having the right to vote (or convertible into, or exchangeable for, into securities having the right to vote) on any matters on which holders shareholders of CDnow Common Stock the Company may vote ("Voting CDnow Debt")vote. Except as set forth above or in the CDnow Disclosure Letteras contemplated herein, there are not any no securities, options, warrants, calls, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contractsagreements, arrangements or undertakings of any kind to which CDnow or any CDnow Subsidiary the Company is a party party, or by which any of them it is bound (i) bound, obligating CDnow or any CDnow Subsidiary the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, voting securities of the Company or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary the Company to issue, grant, extend or enter into any such security, option, warrant, call, right, security, commitment, Contractagreement, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stockundertaking. There are not any outstanding contractual obligations of CDnow or any CDnow Subsidiary the Company to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow or any CDnow Subsidiary. As other securities of the Effective TimeCompany. Except for the Stockholders Agreement contemplated hereby, each CDnow Warrant willthere are no shareholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by its terms, provide the holder thereof with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior which it is bound relating to the Effective Time voting of any shares of capital stock of the Company. All of the outstanding capital stock of the Company's subsidiaries is owned by the Company (other than directors' qualifying shares), directly or indirectly, free and no other consideration) upon exercise thereof.clear of any pledge, claim,

Capital Structure. (a) The authorized capital stock of CDnow Parent consists of 200,000,000 575,000,000 shares of CDnow Parent Common Stock, without par value, Stock and 50,000,000 5,000,000 shares of preferred stock, without par value (together with the CDnow Common Stock, the "CDnow Capital Stock")$0.01 per share. At As of the close of business on July 9May 31, 19992010, (i) 30,211,473 459,949,694 shares of CDnow Parent Common Stock were issued and outstanding, (ii) no shares of CDnow preferred stock were outstanding, (iii) an aggregate of 40,736,541 shares of Parent Common Stock were held by CDnow issuable upon exercise of then outstanding stock options (whether or not exercisable as of such date) and the vesting of restricted stock units, and (iv) 35,000 shares of Parent Common Stock were issuable upon the exercise of then outstanding warrants. In addition to the shares of Parent Common Stock referred to in its treasury clauses (i) and (iii) 1,511,934 additional shares ), as of CDnow Common Stock were reserved for issuance pursuant to the CDnow Stock Plans (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04) outstanding at the close of business on July 12May 31, 19992010, together with the number of 20,935,840 shares of CDnow Parent Common Stock subject to each such CDnow Employee Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above were available for additional grants under Parent’s stock option or in the CDnow Disclosure Letter, at the close of business on July 12, 1999, no shares of capital stock or other voting securities of CDnow were issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rightsequity incentive plans. All of the outstanding shares of CDnow Capital Parent Common Stock are, are validly issued and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, validly issuedoutstanding, fully paid and nonassessable non assessable and not subject free of preemptive rights. (b) Except as otherwise set forth in this Section 4.2, as of the date of this Agreement, Parent has no (i) outstanding stock or securities convertible into or exchangeable for any shares of its equity securities, or any outstanding rights to subscribe for or issued in violation to purchase any shares of its equity securities, or any outstanding options for the purchase thereof, (ii) any agreements providing for the issuance of any purchase option, call option, right of first refusal, preemptive right, subscription right equity securities or any similar right under stock or securities convertible into or exchangeable for any provision equity securities of the PBCL, the CDnow Charter, the CDnow By-laws Parent or any Contract (as defined in Section 3.05iii) to which CDnow is a party or otherwise bound. There are not any outstanding bonds, debentures, notes or other indebtedness of CDnow having the right to vote (or convertible into, into or exchangeable for, for securities having the right to vote) on any matters on which holders stockholders of CDnow Parent may vote. From June 25, 2010 to the date of this Agreement, Parent has not (i) issued any shares of Parent Common Stock may vote except in connection with the conversion, exercise or settlement of any stock options or ("Voting CDnow Debt"). Except as set forth above ii) issued or in the CDnow Disclosure Letter, there are not granted any options, warrants, rights, warrants or securities convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which CDnow or any CDnow Subsidiary is a party or by which any of them is bound (i) obligating CDnow or any CDnow Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible into or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stock. There are not any outstanding contractual obligations of CDnow or any CDnow Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock its Parent Common Stock other than in the ordinary course of CDnow or any CDnow Subsidiary. As business. (c) The shares of the Effective Time, each CDnow Warrant will, by its terms, provide the holder thereof with the right Parent Common Stock to receive the amount of Merger Consideration such holder would have received be issued in the Merger had such CDnow Warrant have been exercised immediately prior duly authorized and, when issued and delivered in accordance with the terms of this Agreement, will have been validly issued and will be fully paid and nonassessable and the issuance thereof is not subject to the Effective Time (and no any preemptive or other consideration) upon exercise thereofsimilar right.

Capital Structure. The authorized capital stock of CDnow the Purchaser consists of 200,000,000 shares of CDnow Common Purchaser Stock and 10,000,000 shares of Preferred Stock, without par value, and 50,000,000 shares of preferred stock, without par value $.01 per share (together with the CDnow Common Stock, the "CDnow Capital Purchaser Preferred Stock"). At the close of business on July 9December 31, 19991996, (i) 30,211,473 68,290,984 shares of CDnow Common Purchaser Stock were issued and outstanding, (ii) no shares of CDnow Common Purchaser Preferred Stock were held by CDnow in its treasury issued and outstanding, (iii) 1,511,934 additional 8,813,520 shares of CDnow Common Purchaser Stock were reserved for issuance pursuant to the CDnow Stock Plans (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04) outstanding at the close of business on July 12, 1999, together with the number of shares of CDnow Common Stock subject to each such CDnow Employee Stock Option and upon the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares stock options of CDnow Common Stock the Purchaser, and (the "CDnow Warrants"iv) outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in the CDnow Disclosure Letter, at the close of business on July 12, 1999, no shares of capital stock or other voting securities of CDnow Purchaser Stock were issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rightsheld by the Purchaser in its treasury. All outstanding shares of CDnow Capital Stock are, and all such shares that may be issued prior to capital stock of the Effective Time will be when issued, duly authorized, Purchaser are validly issued, fully paid and nonassessable and not subject to or issued preemptive rights. As of December 31, 1996, there were options ("Purchaser Stock Options") outstanding, in violation of any purchase optionthe aggregate, call optionunder the Purchaser's Amended and Restated 1995 Employee Stock Option Plan, right of first refusalAmended and Restated 1996 Employee Stock Option Plan, preemptive right, subscription right or any similar right under any provision of the PBCLand 1995 Stock Option Plan for Non-Employee Directors (collectively, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05"Purchaser Option Plans") to which CDnow is a party or otherwise bound. There are not any bonds, debentures, notes or other indebtedness acquire 5,811,868 shares of CDnow having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow Common Stock may vote ("Voting CDnow Debt")Stock. Except for such Purchaser Stock Options, as set forth above or in the CDnow Disclosure Letterof December 31, 1996, there are not any were no options, warrants, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contractsagreements, arrangements or undertakings of any kind to which CDnow the Purchaser or any CDnow Subsidiary of its Subsidiaries is a party or by which any of them is bound (i) obligating CDnow the Purchaser or any CDnow Subsidiary of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests invoting securities of the Purchaser or of any of its Subsidiaries. Since December 31, or 1996, no shares of Purchaser's capital stock have been issued other than pursuant to the exercise of Purchaser Stock Options already in existence on such date, and the Purchaser has not granted any security convertible or exercisable for or exchangeable into stock options on any capital stock of or other equity interest invoting securities of the Purchaser, CDnow except as may be consistent with past practice or any CDnow Subsidiary or any Voting CDnow Debtas otherwise may be contemplated by this Agreement, (ii) obligating CDnow or any CDnow Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person in each case in a manner as would not preclude the right to receive any economic benefit or right similar to or derived Merger from being accounted for as a "pooling of interests." All of the economic benefits and rights accruing to holders of CDnow Capital Stock. There are not any outstanding contractual obligations of CDnow or any CDnow Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow or any CDnow Subsidiary. As of NEWCO are owned by the Effective Time, each CDnow Warrant will, by its terms, provide the holder thereof with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofPurchaser.

Capital Structure. (a) The authorized capital stock of CDnow the Company consists of 200,000,000 shares (i) 150,000,000 Shares, of CDnow Common Stock, without par value, which 38,592,203 Shares were issued and 50,000,000 shares outstanding as of preferred stock, without par value (together with the CDnow Common Stock, the "CDnow Capital Stock"). At the close of business on July 9October 2, 19992020 (the “Measurement Date”), (i) 30,211,473 shares of CDnow Common Stock which 251,404 were issued subject to Company Restricted Share Awards, and outstanding, (ii) no shares 5,000,000 preferred shares, par value $0.001 per share, of CDnow Common Stock were held by CDnow in its treasury which none are issued and (iii) 1,511,934 additional shares outstanding as of CDnow Common Stock were the date hereof. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. As of the Measurement Date, other than 3,274,911 Shares reserved for future issuance under the Company Stock Plans and the Employee Stock Purchase Plan, of which 1,911,632 Shares are subject to issuance pursuant to the CDnow Stock Plans (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Company Options (as defined in Section 8.04) outstanding at the close of business on July 12, 1999, together with the number of shares of CDnow Common Stock and 9,052 Shares are subject to each such CDnow Employee Stock Option and outstanding restricted stock units entitling the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list holder thereof to Shares or cash equal to the value of all warrants to acquire shares of CDnow Common Stock (Shares with only time-based vesting requirements, the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereofCompany has no Shares reserved for issuance. Except as set forth above above, there are no preemptive or in other outstanding rights, options, warrants, conversion rights, stock appreciation rights, restricted share units, performance units, phantom stock rights, profit participation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights, obligations or contracts of any kind that obligate the CDnow Disclosure Letter, at the close of business on July 12, 1999, no Company to issue or sell any shares of capital stock or other voting securities of CDnow were issuedthe Company or any securities or obligations convertible or exchangeable into or exercisable for, reserved or giving any Person a right to subscribe for issuance or acquire, any securities of the Company, and no securities or obligations evidencing such rights are authorized, issued or outstanding. There are no outstanding CDnow stock appreciation rights. All outstanding shares Upon any issuance of CDnow Capital any Shares in accordance with the terms of the Company Stock arePlans, and all such shares that may be issued prior to the Effective Time Shares will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation free and clear of any purchase optionlien, call optioncharge, right of first refusalpledge, preemptive rightsecurity interest, subscription right claim, adverse ownership interest or any similar right under any provision of the PBCLother encumbrance (each, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise bound“Lien”). There are The Company does not have outstanding any bonds, debentures, notes or other indebtedness obligations the holders of CDnow having which have the right to vote (or which are convertible into, into or exchangeable for, exercisable for securities having the right to vote) with the holders of Shares on any matters on which holders matter. From the Measurement Date to the date of CDnow Common Stock may vote this Agreement, no Shares or Company Equity Awards have been issued, other than in connection with the vesting, settlement or exercise of Company Equity Awards that were issued and outstanding as of the Measurement Date. ("Voting CDnow Debt"). Except as set forth above b) The Company does not own any capital stock, equity interest or other direct or indirect ownership interest in the CDnow Disclosure Letterany other Person, there are not any options, warrants, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which CDnow or any CDnow Subsidiary is other than equity securities in a party or by which any of them is bound publicly traded company (i) obligating CDnow or any CDnow Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares held for investment and (ii) consisting of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any less than one percent (1%) of the outstanding capital stock of or other equity interest insuch company. (c) Each Company Option (i) was granted and properly approved in compliance with all applicable Laws, CDnow or any CDnow Subsidiary or any Voting CDnow Debtincluding the applicable requirements of NASDAQ, and all of the terms and conditions of the applicable Company Stock Plan pursuant to which it was issued and (ii) obligating CDnow or any CDnow Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar has an exercise price per Share equal to or derived from greater than the economic benefits and rights accruing to holders fair market value of CDnow Capital Stock. There are not any outstanding contractual obligations a Share on the date of CDnow or any CDnow Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow or any CDnow Subsidiary. As of the Effective Time, each CDnow Warrant will, by its terms, provide the holder thereof with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofgrant.

Capital Structure. (i) The authorized capital stock of CDnow Company consists of 200,000,000 50,000,000 shares of CDnow Common Stock, without par value, Stock and 50,000,000 10,000,000 shares of preferred stock, without par value $.01 per share (together with the CDnow Common Stock, the "CDnow Capital Authorized Preferred Stock"). At the close of business on July 9, 1999, (iA) 30,211,473 25,603,512 shares of CDnow Common Stock were are issued and outstanding, (iiB) no shares of CDnow Authorized Preferred Stock are issued and outstanding, (C) no shares of Common Stock were are held by CDnow the Company in its treasury and (iiiD) 1,511,934 additional shares of CDnow Common Stock were reserved for issuance pursuant to the CDnow Stock Plans (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04) outstanding at the close of business on July 12, 1999, together with the number of shares of CDnow Common Stock subject to each such CDnow Employee Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in the CDnow Disclosure Letter, at the close of business on July 12, 1999, no shares of capital stock or other voting securities Common Stock are held by any of CDnow were issuedthe Company's Subsidiaries. (ii) As of the date hereof, reserved for issuance or outstanding. There there are no outstanding CDnow stock appreciation rights. All outstanding shares of CDnow Capital Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the PBCL, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise bound. There are not any bonds, debentures, notes or other indebtedness of CDnow issued or outstanding having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow Common Stock or Authorized Preferred Stock may vote vote, including without limitation the approval of the Articles of Amendment and issuance of the Remaining Shares to the Purchaser (the "Voting CDnow DebtShare Issuance"). (iii) Except as set forth in Schedule 3.1(c)(iii) of the Company Disclosure Schedule, there are no outstanding warrants, stock options, stock appreciation rights or other rights to receive any capital stock of the Company granted under the Stock Plans or otherwise. Schedule 3.1(c)(iii) of the Company Disclosure Schedule sets forth a complete and correct list, as of the date hereof, of the number, class and series of shares subject to all warrants, options, stock appreciation rights or other rights to receive any of the capital stock of the Company (collectively, "Company Options"), and the exercise or base prices thereof. Except for the Company Options and, except as set forth above or in Schedule 3.1(c)(iii) of the CDnow Company Disclosure LetterSchedule, there are not any no outstanding securities, options, warrants, calls, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contractsagreements, arrangements or undertakings of any kind to which CDnow the Company or any CDnow Subsidiary of its Subsidiaries is a party or by which any of them is bound (i) obligating CDnow the Company or any CDnow Subsidiary of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock (or other voting or equity interests insecurities or interests, as applicable) of the Company or of any of its Subsidiaries or obligating the Company or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary its Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, security, commitment, Contractagreement, arrangement or undertaking or (iiiundertaking. Except as set forth in Schedule 3.1(c)(iii) that give any person of the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stock. There Company Disclosure Schedule, there are not any no outstanding contractual obligations of CDnow the Company or any CDnow Subsidiary of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock (or other voting or equity securities or interests, as applicable) of CDnow the Company or any CDnow Subsidiary. As of its Subsidiaries. (iv) All outstanding shares of capital stock (or other voting or equity securities or interests, as applicable) of the Effective TimeCompany and its Subsidiaries are, each CDnow Warrant willand all shares which may be issued will be, by its termswhen issued, provide the holder thereof with the right duly authorized, validly issued, fully paid and nonassessable and not subject to receive the amount of Merger Consideration such holder would have received preemptive or similar rights. (v) Except as contemplated hereby or in the Merger had such CDnow Warrant been exercised immediately prior other Transaction Documents or as set forth in Schedule 3.1(c)(iii) of the Company Disclosure Schedule, there are not as of the date hereof and there will not be at the time of either Closing any shareholder agreements, voting agreements or trusts, proxies or other agreements or contractual obligations to which the Company or any Subsidiary is a party or bound with respect to the Effective Time voting or disposition of any shares of the capital stock (and or other voting or equity securities or interests, as applicable) of the Company or any of its Subsidiaries and, to the Company's knowledge, as of the date hereof, there are no other considerationshareholder agreements, voting agreements or trusts, proxies or other agreements or contractual obligations among the shareholders of the Company with respect to the voting or disposition of any shares of the capital stock (or other voting or equity securities or interests, as applicable) upon exercise thereofof the Company or any of its Subsidiaries.

Capital Structure. (a) The authorized capital stock of CDnow the Company consists of 200,000,000 100,000,000 shares of CDnow Common Stock, without par value, and 50,000,000 shares of preferred stock, without par value (together with the CDnow Common Stock, the "CDnow Capital Stock"). At the close of business on July 914, 1999, (i) 30,211,473 6,856,437 shares of CDnow Common Stock were issued and outstanding, (ii) no and 371,464 shares of CDnow Common Stock were held by CDnow in its treasury and (iii) 1,511,934 additional shares of CDnow Common Stock were reserved for issuance pursuant to the CDnow Stock Plans (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04) outstanding at the close of business on July 12, 1999, together with the number of options to purchase shares of CDnow Common Stock subject which have been granted to each such CDnow Employee directors, officers, or employees of the Company or others ("Company Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the Options"CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof). Except as set forth above or in the CDnow Disclosure Letterabove, at the close of business on July 1214, 1999, no shares of capital stock or other voting equity securities of CDnow the Company were issued, reserved for issuance issuance, or outstanding. There are no outstanding CDnow stock appreciation rights. All outstanding shares of CDnow Capital Stock capital stock of the Company are, and all such shares that which may be issued prior pursuant to the Effective Time any outstanding Company Stock Options will be be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued preemptive rights. Except as set forth in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision Section 4.2 of the PBCLDisclosure Schedule, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise bound. There are not any no bonds, debentures, notes notes, or other indebtedness of CDnow the Company or any Subsidiary having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders the shareholders of CDnow Common Stock the Company or any Subsidiary may vote ("Voting CDnow Debt")are issued or outstanding. Except as disclosed in Section 4.2 of the Disclosure Schedule, all the outstanding shares of capital stock or other ownership interests of each Subsidiary have been validly issued and are fully paid and nonassessable and are owned by the Company, by one or more Subsidiaries, or by the Company and one or more such Subsidiaries, free and clear of all Liens. Except as set forth above or in Section 4.2 of the CDnow Disclosure LetterSchedule, there are not neither the Company nor any optionsSubsidiary has any outstanding option, warrantswarrant, rightssubscription, convertible or exchangeable securitiesother right, "phantom" stock rightsagreement, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to commitment which CDnow or any CDnow Subsidiary is a party or by which any of them is bound (i) obligating CDnow obligates the Company or any CDnow Subsidiary to issue, deliver sell or selltransfer, repurchase, redeem, or cause to be issued, delivered otherwise acquire or sold, additional vote any shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any the capital stock of or other equity interest in, CDnow the Company or any CDnow Subsidiary or any Voting CDnow DebtSubsidiary, (ii) obligating CDnow restricts the transfer of shares of stock of the Company or any CDnow Subsidiary to issueSubsidiary, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person grants the right to receive participate in any economic benefit or right similar to or derived from equity appreciation of the economic benefits and rights accruing to holders of CDnow Capital Stock. There are not any outstanding contractual obligations of CDnow Company or any CDnow Subsidiary to repurchaseSubsidiary. (b) When issued in accordance with the terms of this Agreement, redeem or otherwise acquire any shares of capital stock of CDnow or any CDnow Subsidiary. As and if applicable in accordance with the terms of the Effective TimeNotes, each CDnow the Convertible Preferred Stock, and the Nonvoting Warrants, the Shares, the Convertible Preferred Stock, the Stock, the Nonvoting Stock, and the Nonvoting Warrant willShares will be duly authorized, by its termsvalidly issued, provide the holder thereof with the right to receive the amount fully paid, and non-assessable, will not be issued in violation of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (any preemptive rights and no other consideration) upon exercise thereofwill be free and clear of any and all taxes or Liens.

Capital Structure. (a) The authorized capital stock of CDnow the Company consists of 200,000,000 1,000,000,000 shares of CDnow the Company Common Stock, without par value, Stock and 50,000,000 shares of preferred stock, without par value $0.01 per share (the “Company Preferred Stock”, and, together with the CDnow Company Common Stock, the "CDnow “Company Capital Stock"”). At the close of business on July 9May 8, 19992015 (the “Measurement Date”), (ia) 30,211,473 36,809,108 shares of CDnow Company Common Stock (which includes 290,566 shares of Company Restricted Stock) were issued and outstanding, outstanding and (iib) no shares of CDnow Common Company Preferred Stock were held by CDnow in its treasury issued or outstanding. All issued and (iii) 1,511,934 additional outstanding shares of CDnow Common Stock were reserved for issuance pursuant the capital stock of the Company are duly authorized, validly issued, fully paid and non-assessable, and no class of capital stock of the Company is entitled to the CDnow Stock Plans (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options (as defined in Section 8.04) outstanding at the close of business on July 12, 1999, together with the number of shares of CDnow Common Stock subject to each such CDnow Employee Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereofpreemptive rights. Except as set forth above or in the CDnow Disclosure Letterabove, at the close of business on July 12, 1999the Measurement Date, no shares of capital stock or other voting securities of CDnow the Company were issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights. All outstanding shares of CDnow Capital Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the PBCL, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise bound. There are not any bonds, debentures, notes or other indebtedness of CDnow the Company or any Company Subsidiary having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow the Company Common Stock Stock, the Company OP Units or the general partnership interests in the Company OP may vote ("“Voting CDnow Company Debt"”). Except as set forth above or in above, as of the CDnow Disclosure LetterMeasurement Date, there are not any were no options, warrants, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which CDnow the Company or any CDnow Company Subsidiary is was a party or by which any of them is was bound (i) obligating CDnow the Company or any CDnow Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow the Company or of any CDnow Company Subsidiary or any Voting CDnow Debt, Company Debt or (ii) obligating CDnow the Company or any CDnow Company Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitmentcommitment or undertaking. At the close of business on the Measurement Date, Contract(a) Company OP GP, arrangement as sole general partner of Company OP, owned the entire general partnership interest in Company OP; (b) 39,152,608 Company OP Units were issued and outstanding (c) no preferred units of the Company OP were issued and outstanding; (d) no Class B Contingent Units (as defined in the Company OP Limited Partnership Agreement) were issued and outstanding; (e) no LTIP Units (as defined in the Company OP Limited Partnership Agreement) were issued and outstanding; and (f) no other partnership interests were issued and outstanding or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stockissuable. There are not no partners of the Company OP or holders of Company OP Units other than as set forth on Section 3.02(a) of the Company Disclosure Letter. Section 3.02(a) of the Company Disclosure Letter sets forth the number of partnership units held by each partner in the Company OP. Other than the Company OP Units owned by the limited partners of the Company OP set forth in Section 3.02(a) of the Company Disclosure Letter, the Company directly owns all of the issued and outstanding Company OP Units of the Company OP, free and clear of any outstanding contractual obligations Liens, and all Company OP Units have been duly authorized and validly issued and are free of CDnow preemptive rights. The Company OP GP is the sole general partner of the Company OP and owns the general partnership interest free and clear of any Liens. (b) Except as set forth above, as of the close of business on the Measurement Date, there were no (i) restricted shares, restricted share units, stock appreciation rights, performance shares, performance share units, contingent value rights, “phantom” stock or similar securities or rights that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any capital stock of, or other voting securities or ownership interests in, the Company or any CDnow Company Subsidiary, (ii) voting trusts, proxies or other similar agreements or understandings to which the Company or any Company Subsidiary was a party or by which the Company or any Company Subsidiary was bound with respect to repurchase, redeem or otherwise acquire the voting of any shares of capital stock of CDnow the Company or any CDnow Company Subsidiary, or (iii) contractual obligations or commitments of any character to which the Company or any Company Subsidiary was a party or by which the Company or any Company Subsidiary was bound restricting the transfer of, or requiring the registration for sale of, any shares of capital stock of the Company or any Company Subsidiary. As Neither the Company nor any Company Subsidiary has granted any preemptive rights, anti-dilutive rights or rights of first refusal or similar rights with respect to any of its capital stock or other equity interests. (c) Except as set forth in Section 3.02(c) of the Effective TimeCompany Disclosure Letter, all of the outstanding shares of capital stock or other equity interests of each CDnow Warrant willCompany Subsidiary are owned by the Company, by its termsanother Company Subsidiary or by the Company and another Company Subsidiary, provide the holder thereof with free and clear of all pledges, liens, charges, mortgages, encumbrances and security interests of any kind or nature whatsoever (collectively, “Liens”) and free of any restriction on the right to receive vote, sell or otherwise dispose of such capital stock or other equity interests other than transfer and other restrictions under applicable federal and state securities Laws. (d) All dividends or other distributions on the amount shares of Merger Consideration such holder would Company Common Stock and any material dividends or other distributions on any securities of any Company Subsidiary which have received in the Merger had such CDnow Warrant been exercised immediately authorized and declared prior to the Effective Time date hereof have been paid in full (except to the extent such dividends have been publicly announced and no other consideration) upon exercise thereofare not yet due and payable).

Capital Structure. The authorized capital stock of CDnow the Company consists of 200,000,000 45,000,000 shares of CDnow Company Common Stock, without par value, Stock and 50,000,000 5,000,000 shares of preferred stock, without par value $.001 per share (together with the CDnow Common Stock, the "CDnow Capital Company Preferred Stock"). At the close of business on July 9January 14, 19992003, (i) 30,211,473 22,595,758 shares of CDnow Company Common Stock were issued and outstanding, (ii) no shares of CDnow Company Common Stock were held by CDnow the Company in its treasury and treasury, (iii) 1,511,934 additional 5,633,499 shares of CDnow Company Common Stock were reserved for issuance pursuant to the CDnow Equity Compensation Plan of the Company, as amended, and the 2000 Equity Compensation Plan of the Company, as amended (such plans, collectively, the "Company Stock Plans (as defined in Section 8.04(dPlans")). The CDnow Disclosure Letter sets forth a complete list , of all CDnow Employee Stock Options (as defined in Section 8.04) outstanding at the close of business on July 12, 1999, together with the number of which 3,884,538 shares of CDnow Company Common Stock were subject to each such CDnow Employee outstanding Company Stock Option Options, and 47,787 shares of Company Common Stock were subject to vesting and restrictions on transfer (collectively, "Company Restricted Stock"), (iv) no shares of Company Preferred Stock were issued or outstanding or were held by the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all Company as treasury shares and (v) warrants to acquire 106,329 shares of CDnow Company Common Stock from the Company pursuant to the warrant agreements set forth on Section 3.01(c) of the Company Disclosure Schedule and previously delivered in complete and correct form to Parent (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant were issued and the exercise price thereofoutstanding. Except as set forth above or in the CDnow Disclosure Letterthis Section 3.01(c), at the close of business on July 12January 14, 19992003, no shares of capital stock or other voting securities or equity interests of CDnow the Company were issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation rights, "phantom" stock rights, performance units, rights to receive shares of Company Common Stock on a deferred basis or other rights (other than Company Stock Options and Warrants) that are linked to the value of Company Common Stock (collectively, "Company Stock-Based Awards"). Section 3.01(c) of the Company Disclosure Schedule sets forth a complete and accurate list, as of January 14, 2003, of all outstanding options to purchase shares of Company Common Stock (collectively, "Company Stock Options") under the Company Stock Plans or otherwise, and all outstanding Warrants, the number of shares of Company Common Stock (or other stock) subject thereto, the grant dates, expiration dates, exercise or base prices (if applicable) and vesting schedules thereof and the names of the holders thereof. No shares of Company Common Stock are subject to repurchase by the Company at a fixed purchase price. All outstanding Company Stock Options are evidenced by stock option agreements, restricted stock purchase agreements or other award agreements, in each case in the forms set forth in Section 3.01(c) of the Company Disclosure Schedule, and no stock option agreement, restricted stock purchase agreement or other award agreement contains terms that are inconsistent with such forms. As of the close of business on January 14, 2003, there were outstanding Company Stock Options to purchase 1,162,531 shares of Company Common Stock with exercise prices on a per share basis lower than the Merger Consideration, and the weighted average exercise price of such Company Stock Options was equal to $2.67. As of the close of business on January 14, 2003, there were outstanding Warrants to purchase 101,829 shares of Company Common Stock with exercise prices on a per share basis lower than the Merger Consideration. Each Company Stock Option may, by its terms, be canceled in connection with the transactions contemplated hereby for a lump sum cash payment in accordance with and to the extent required by Section 5.04(a). All Warrants may, by their terms, be canceled in exchange for a lump sum cash payment in accordance with and to the extent required by Section 5.04(b). All outstanding shares of CDnow Capital Stock capital stock of the Company are, and all such shares that which may be issued prior pursuant to the Effective Time Company Stock Options or the Warrants will be be, when issuedissued in accordance with the terms thereof, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the PBCL, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise boundrights. There are not any no bonds, debentures, notes or other indebtedness of CDnow the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders stockholders of CDnow Common Stock the Company may vote ("Voting CDnow Debt")vote. Except as set forth above in this Section 3.01(c), (x) there are not issued, reserved for issuance or in outstanding (A) any shares of capital stock or other voting securities or equity interests of the CDnow Disclosure LetterCompany, (B) any securities of the Company convertible into or exchangeable or exercisable for shares of capital stock or other voting securities or equity interests of the Company or (C) any warrants, calls, options or other rights to acquire from the Company or any of its Subsidiaries, and no obligation of the Company or any of its Subsidiaries to issue, any capital stock, voting securities, equity interests or securities convertible into or exchangeable or exercisable for capital stock or voting securities of the Company and (y) there are not any options, warrants, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings outstanding obligations of any kind to which CDnow the Company or any CDnow Subsidiary is a party of its Subsidiaries to repurchase, redeem or by which otherwise acquire any of them is bound (i) obligating CDnow such securities or any CDnow Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional any such securities. Neither the Company nor any of its Subsidiaries is a party to any voting agreement with respect to the voting of any such securities. Except as set forth above in this Section 3.01(c), there are no outstanding (1) securities of the Company or any of its Subsidiaries convertible into or exchangeable or exercisable for shares of capital stock or other voting securities or equity interests inof any Subsidiary of the Company, (2) warrants, calls, options or other rights to acquire from the Company or any security of its Subsidiaries, and no obligation of the Company or any of its Subsidiaries to issue, any capital stock, voting securities, equity interests or securities convertible into or exchangeable or exercisable for or exchangeable into any capital stock or voting securities of any Subsidiary of the Company or other equity interest in, CDnow (3) obligations of the Company or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stock. There are not any outstanding contractual obligations of CDnow or any CDnow Subsidiary its Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow such outstanding securities or to issue, deliver or sell, or cause to be issued, delivered or sold, any CDnow Subsidiary. As of the Effective Time, each CDnow Warrant will, by its terms, provide the holder thereof with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofsecurities.

Capital Structure. The authorized capital stock Except as set forth in Section 3.2 of CDnow consists the UTI Disclosure Schedule, all of 200,000,000 shares the outstanding equity securities of CDnow Common Stockeach Subsidiary of UTI is owned by UTI, without par valuedirectly or indirectly, free and 50,000,000 shares clear of preferred stockany Liens, without par value (together with including any restriction on the CDnow Common Stockright to vote, the "CDnow Capital Stock")sell or otherwise dispose of such equity securities. At the close of business on July 9February 2, 19992001, (i) 30,211,473 37,569,461 shares of CDnow UTI Common Stock were validly issued and outstandingoutstanding fully paid and non-assessable and free of preemptive rights, (ii) no a total of 4,287,426 shares of CDnow Common Stock were held by CDnow in its treasury and (iii) 1,511,934 additional shares of CDnow UTI Common Stock were reserved for issuance pursuant to upon exercise of then outstanding UTI Stock Options (as defined in Section 5.7) and UTI Warrants (as defined in Section 5.8), (iii) a total of 1,182,434 additional shares of UTI Common Stock were reserved for issuance under the CDnow UTI Stock Plans (as defined in Section 8.04(d5.7)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options , (as defined in Section 8.04iv) outstanding at the close of business on July 12, 1999, together with the number of 1,206,548 shares of CDnow UTI Common Stock subject to each such CDnow Employee Stock Option were held by UTI in its treasury, and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants"v) outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in the CDnow Disclosure Letter, at the close of business on July 12, 1999, no shares of capital stock or other voting securities of CDnow UTI Preferred Stock were issued, issued and outstanding and 50,000 were reserved for issuance or outstandingissuance. There are no outstanding CDnow stock appreciation rightsrights ("SARs"). All outstanding shares equity securities of CDnow Capital Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, UTI are validly issued, fully paid and nonassessable non-assessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision rights. Except for UTI Stock Options and UTI Warrants outstanding as of the PBCL, date of this Agreement and the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise bound. There are not any bonds, debentures, notes or other indebtedness additional shares of CDnow having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow UTI Common Stock may vote ("Voting CDnow Debt"). Except as set forth above or in reserved for issuance under the CDnow Disclosure LetterUTI Stock Plans, there are not any no options, warrants, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contractsagreements, arrangements or undertakings of any kind to which CDnow UTI or any CDnow Subsidiary of its Subsidiaries is a party or by which any of them is bound (i) obligating CDnow UTI or any CDnow Subsidiary of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock equity securities or other equity interests invoting securities of UTI or its Subsidiaries. True and correct copies of all agreements, or any security convertible or exercisable for or exchangeable into any capital stock of or instruments and other equity interest in, CDnow or any CDnow Subsidiary or any Voting CDnow Debt, (ii) obligating CDnow or any CDnow Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stock. There are not any outstanding contractual obligations of CDnow or any CDnow Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of CDnow or any CDnow Subsidiary. As of the Effective Time, each CDnow Warrant will, by its terms, provide the holder thereof with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior governing documents relating to the Effective Time (UTI Stock Options, UTI Stock Warrants and no other consideration) upon exercise thereofUTI Stock Plans have been furnished to PEC.

Capital Structure. The Except as set forth in Schedule 4.2 of the Company Disclosure Letter: (a) As of the date of this Agreement, the authorized capital stock of CDnow the Company consists of 200,000,000 (i) 65,000,000 shares of CDnow Company Common Stock, without par value, Stock and 50,000,000 (ii) 10,000,000 shares of preferred stock, without par value $0.01 per share (“Company Preferred Stock” and, together with the CDnow Company Common Stock, the "CDnow “Company Capital Stock"”). At As of the close date of business on July 9, 1999, this Agreement: (iA) 30,211,473 50,924,098 shares of CDnow Company Common Stock are issued and outstanding and no shares of Company Preferred Stock were issued and outstanding, ; (iiB) no the shares of CDnow Company Common Stock were held by CDnow in its treasury issued and (iii) 1,511,934 additional outstanding include 325,775 shares of CDnow Common Stock were reserved Company Restricted Stock; (C) 928,781 Company RSUs are outstanding and 590,767 Company RSUs remain available for issuance pursuant to the CDnow Company Restricted Stock Plans Units Plan; and (as defined in Section 8.04(d)). The CDnow D) the outstanding Company PIAs consist solely of those awarded under the Company PIA Award Agreements listed on Schedule 4.2 of the Company Disclosure Letter sets forth a complete list of all CDnow Employee Stock Options Letter. (as defined in Section 8.04b) All outstanding at the close of business on July 12, 1999, together with the number of shares of CDnow Company Common Stock subject to each such CDnow Employee Stock Option have been duly authorized and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "CDnow Warrants") outstanding at the close of business on July 12, 1999 together with the number of shares of CDnow Common Stock subject to each such warrant and the exercise price thereof. Except as set forth above or in the CDnow Disclosure Letter, at the close of business on July 12, 1999, no shares of capital stock or other voting securities of CDnow were are validly issued, reserved for issuance or outstanding. There are no outstanding CDnow stock appreciation fully paid and non-assessable and were not issued in violation of any preemptive rights. All outstanding shares of CDnow Capital Company Common Stock are, have been issued and granted in compliance in all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, validly issued, fully paid material respects with (i) applicable securities Laws and nonassessable other applicable Law and not subject to or issued (ii) all requirements set forth in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision applicable contracts. As of the PBCLdate of this Agreement, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise bound. There are not any bonds, debentures, notes or other indebtedness of CDnow having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow Common Stock may vote ("Voting CDnow Debt"). Except except as set forth above or in the CDnow Disclosure Letterthis Section 4.2, there are not any no outstanding options, warrantswarrants or other rights to subscribe for, rights, purchase or acquire from the Company or any of its Subsidiaries any capital stock of the Company or securities convertible into or exchangeable securitiesor exercisable for capital stock of the Company (and the exercise, "phantom" stock rightsconversion, stock appreciation rightspurchase, stock-based performance units, commitments, Contracts, arrangements exchange or undertakings of any kind to which CDnow or any CDnow Subsidiary is a party or by which any of them is bound (i) obligating CDnow or any CDnow Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional other similar price thereof). All outstanding shares of capital stock or other equity interests inof the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly-owned Subsidiary of the Company, are free and clear of all Encumbrances (other than Encumbrances described in Schedule 4.2 of the Company Disclosure Letter) and have been duly authorized and are validly issued, fully paid and nonassessable (except, in the case of partnerships or limited liability companies, to the extent such non-assessability may be affected by applicable Law of their jurisdictions of formation or organization). Except as set forth in this Section 4.2, and except for stock grants or other awards granted in accordance with Section 6.1(b)(ii), there are outstanding: (A) no shares of Company Capital Stock, Voting Debt or other voting securities of the Company, (B) no securities of the Company or any security Subsidiary of the Company convertible into or exchangeable or exercisable for or exchangeable into any capital stock shares of Company Capital Stock, Voting Debt or other equity interest invoting securities of the Company and (C) no options, CDnow warrants, subscriptions, calls, rights (including preemptive and appreciation rights), commitments or agreements to which the Company or any CDnow Subsidiary of the Company is a party or by which it is bound in any case obligating the Company or any Subsidiary of the Company to issue, deliver, sell, purchase, redeem or acquire, or cause to be issued, delivered, sold, purchased, redeemed or acquired, additional shares of Company Capital Stock or any Voting CDnow Debt, (ii) obligating CDnow Debt or other voting securities of the Company or any CDnow Subsidiary of the Company, or obligating the Company or any Subsidiary of the Company to issue, grant, extend or enter into any such option, warrant, subscription, call, right, securitycommitment or agreement. Other than the Company Voting Agreements and the Company Stockholders Agreement, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of CDnow Capital Stock. There there are not any outstanding contractual obligations of CDnow stockholder agreements, voting trusts or other agreements to which the Company or any CDnow Subsidiary of its Subsidiaries is a party or by which it is bound relating to repurchase, redeem or otherwise acquire the voting of any shares of capital stock or other equity interest of CDnow the Company or any CDnow Subsidiaryof its Subsidiaries. No Subsidiary of the Company owns any shares of Company Capital Stock. As of the Effective Timedate of this Agreement, each CDnow Warrant willneither the Company nor any of its Subsidiaries has any (1) interests in a material joint venture or, by directly or indirectly, equity securities or other similar equity interests in any Person or (2) obligations, whether contingent or otherwise, to consummate any material additional investment in any Person other than its terms, provide Subsidiaries and its joint ventures listed on Schedule 4.2 of the holder thereof with the right to receive the amount of Merger Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and no other consideration) upon exercise thereofCompany Disclosure Letter.