EXHIBIT (A)(5)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
CDnow, Inc.
at
$3.00 Net Per Share
by
BINC Acquisition Corp.
a wholly owned subsidiary of
Bertelsmann, Inc.
July 26, 2000
To Our Clients:
Enclosed for your consideration is the Offer to Purchase dated July 26,
2000 (the "Offer to Purchase") and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute
the "Offer") in connection with the offer by BINC Acquisition Corp., a
Pennsylvania corporation ("Purchaser") and a wholly owned subsidiary of
Bertelsmann, Inc., a Delaware corporation ("Parent"), to purchase all
outstanding shares of common stock, no par value (the "Shares"), of CDnow,
Inc., a Pennsylvania corporation (the "Company"), at a purchase price of $3.00
per Share, net to the seller in cash, without interest thereon, upon the terms
and subject to the conditions set forth in the Offer to Purchase and in the
Letter of Transmittal enclosed herewith.
We are the holder of record of Shares for your account. A tender of such
Shares can be made only by us as the holder of record and pursuant to your
instructions. The enclosed Letter of Transmittal is furnished to you for your
information only and cannot be used by you to tender Shares held by us for your
account.
We request instructions as to whether you wish us to tender any or all of
the Shares held by us for your account, upon the terms and subject to the
conditions set forth in the Offer to Purchase.
Your attention is invited to the following:
1. The offer price is $3.00 per Share, net to you in cash, without
interest.
2. The Offer and withdrawal rights expire at 12:00 midnight, New
York City time, on Tuesday, August 22, 2000, unless the Offer is
extended.
3. The Offer is being made pursuant to an Agreement and Plan of
Merger, dated as of July 19, 2000 (the "Merger Agreement"), among
Parent, Purchaser and the Company. The Merger Agreement provides,
among other things, that Purchaser will be merged into the
Company (the "Merger") following the satisfaction or waiver of
each of the conditions to the Merger set forth in the Merger
Agreement.
4. The Board of Directors of the Company has determined that the
Offer and the Merger are fair to and in the best interests of the
shareholders of the Company and recommends that the Company's
shareholders tender their Shares in the Offer.
5. The Offer is conditioned upon, among other things, (i) there
being validly tendered and not withdrawn prior to the expiration
of the Offer a number of Shares that represents, together with
any Shares beneficially owned by Parent (other than Shares, if
any, convertible upon conversion of the Convertible Loan
Agreement (as defined in the Offer to Purchase)), at least a
majority of the then outstanding Shares on a diluted basis
(taking into consideration options and warrants to acquire Shares
at $10 per Share or less but excluding Shares, if any, issuable
upon exercise of the Convertible Loan Agreement) and (ii) the
expiration of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 or other
applicable foreign antitrust or competition laws. The Offer is
also subject to other conditions.
6. Any stock transfer taxes applicable to the sale of Shares to
Purchaser pursuant to the Offer will be paid by Purchaser, except
as otherwise provided in Instruction 6 of the Letter of
Transmittal.
If you wish to have us tender any or all of your Shares, please so
instruct us by completing, executing and returning to us the instruction form
set forth on the reverse side of this letter. An envelope to return your
instructions to us is also enclosed. If you authorize the tender of your
Shares, all such Shares will be tendered unless otherwise specified on the
reverse side of this letter. Your instructions should be forwarded to us in
ample time to permit us to submit a tender on your behalf prior to the
expiration of the Offer.
The Offer is not being made to, nor will tenders be accepted from or
on behalf of, holders of Shares in any jurisdiction in which the making of the
Offer or acceptance thereof would not be in compliance with the laws of such
jurisdiction.
Payment for Shares accepted for payment pursuant to the Offer will be
made only after timely receipt by ChaseMellon Shareholder Services, L.L.C. (the
"Depositary") of (a) certificates evidencing such Shares or confirmation of the
book-entry transfer of such Shares into the Depositary's account at The
Depository Trust Company (the "Book- Entry Transfer Facility"), pursuant to the
procedures set forth in the Offer to Purchase under "Procedures for Accepting
the Offer and Tendering Shares", (b) the Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, with any required signature
guarantees or, in the case of a book-entry transfer, an Agent's Message (as
defined in the Offer to Purchase) in lieu of the Letter of Transmittal, and (c)
any other documents required by the Letter of Transmittal. Accordingly, payment
may not be made to all tendering shareholders at the same time depending upon
when certificates for or confirmations of book-entry transfer of such Shares
into the Depositary's account at the Book- Entry Transfer Facility are actually
received by the Depositary.
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Instructions with Respect to the
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
CDnow, Inc.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated July 26, 2000 and the related Letter of Transmittal, in
connection with the offer by BINC Acquisition Corp. to purchase all outstanding
shares of common stock, no par value (the "Shares"), of CDnow, Inc. at a
purchase price of $3.00 per Share, net to the seller in cash, without interest
thereon, upon the terms and subject to the conditions set forth in the Offer to
Purchase and the related Letter of Transmittal.
This will instruct you to tender to Purchaser the number of Shares
indicated below (or, if no number is indicated below, all Shares) that are held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer to Purchase and the related Letter of
Transmittal.
Number of Shares to Be Tendered:* SIGN HERE
_______________________________ Shares ______________________________________________
Signature(s)
Account No.: _________________________
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Dated: __________________________, 2000 Print Name(s)
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and Address(es)
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Area Code and Telephone Number
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Tax Identification or Social Security Number
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* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
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