<PAGE> 14

                                  Press Release
                               (See Exhibit: 99.1)


                                 Exhibit: 10.1


     AMENDMENT dated as of March 13, 2000 (this "Amendment"), to the Convertible
Loan Agreement  dated as of July 12, 1999 (the  "Convertible  Loan  Agreement"),
among CDNOW,  INC., a  Pennsylvania  corporation  (the  "Borrower"),  SONY MUSIC
ENTERTAINMENT  INC.  ("Sony  Music") and TIME WARNER INC.  ("Time  Warner",  and
together with Sony Music, the "Lenders").

     WHEREAS the Borrower and the Lenders have entered into the Convertible Loan
Agreement;

     WHEREAS the Borrower and the Lenders desire to amend the  Convertible  Loan
Agreement to make certain  modifications  and  clarifications  to the provisions
contained therein;

     NOW,  THEREFORE,  in  consideration  of  the  premises,   mutual  promises,
representations,  warranties  and  covenants  contained in this  Amendment,  the
parties hereto hereby agree:

     SECTION  1.  Amendment  of  Section  1.  (a)  The  definition  of the  term
"Conversion  Price" in Section 1 of the  Convertible  Loan  Agreement  is hereby
deleted  in its  entirety  and  such  definition  is  hereby  replaced  with the
following definition:

     "'Conversion Price' shall mean $10.00.".

     (b) The  definition of the term "Final  Maturity  Date" in Section 1 of the
Convertible Loan Agreement is hereby deleted in its entirety and such definition
is hereby replaced with the following definition:

     "'Final  Maturity Date' shall mean the earlier of (a) such time as the Loan
Commitment  is reduced to zero  pursuant to the terms hereof and (b) January 15,
2003.".

     (c)  The  definition  of  the  term  "Indebtedness"  in  Section  1 of  the
Convertible  Loan  Agreement is hereby  amended to delete clause (iv) thereof in
its entirety and such clause is hereby replaced with the following clause:

     "(iv) any  obligation  of such  Person  issued or assumed  as the  deferred
purchase price of Property or services (but excluding trade accounts  payable or
accrued liabilities arising in the ordinary course of business,  which in either
case are not more than 120 days overdue, or alternative terms of which have been
agreed to by the  parties  (so long as such terms do not provide for any amounts
to be more than 366 days overdue) or which are being contested in good faith)".

<PAGE>  15

     (d)  The  definition  of the  term  "Interest  Rate"  in  Section  1 of the
Convertible Loan Agreement is hereby deleted in its entirety and such definition
is hereby replaced with the following definition:

     "'Interest  Rate' shall mean a rate per annum equal to the Eurodollar  Rate
plus 3%.".

     (e) The  definition  of the term "Net Debt  Proceeds"  in  Section 1 of the
Convertible Loan Agreement is hereby deleted in its entirety.

     (f) The definition of the term "Permitted  Interim  Financing" in Section 1
of the  Convertible  Loan  Agreement is hereby  deleted in its entirety and such
definition is hereby replaced with the following definition:

     "'Permitted  Interim  Financing' shall mean Indebtedness for borrowed money
incurred by the Borrower  provided that (i) the maturity date thereof extends to
at least 366 days beyond the Final Maturity Date, (ii) such  Indebtedness (A) is
unsecured  or is  secured  by a Lien  that is junior  to any Lien  securing  any
amounts  outstanding  under  this  Agreement  and (B) is not  guaranteed  by any
Subsidiary of the Borrower,  (iii) such Indebtedness  contains  representations,
warranties,   covenants  and   agreements   which  are  not  more   restrictive,
individually or taken as a whole,  than those in effect  hereunder and (iv) such
Indebtedness  is  subject  to  subordination  and   intercreditor   arrangements
satisfactory  to the Lenders  (and  appropriate  to reflect the senior,  secured
nature of the Obligations).".

     (g) The  definition  of the term "Third Party Tender Offer" in Section 1 of
the  Convertible  Loan Agreement is hereby amended to add to the end thereof the
phrase "(and replacing every reference to "Company" therein with "Borrower", the
reference  to  "Purchaser"  therein with  "Lender" and the  reference to "Common
Stock" therein with "common stock, without par value, of the Borrower")".

     SECTION 2. Amendment of Section 2.6.  Section 2.6 of the  Convertible  Loan
Agreement  is hereby  amended to delete  clause (i) thereof in its  entirety and
such clause is hereby replaced with the following clause:

     (i) the  Borrower  shall give the  Lenders  written  notice (or  telephonic
notice promptly confirmed in writing), which notice shall be irrevocable, of its
intent to prepay the Loans,  at least five  Business Days prior to a prepayment,
which notice shall specify the date (which shall be a Business  Day),  the Loans
and the amount of such prepayment and".

     SECTION 3. Amendment of Section 2.7. Section 2.7(a) of the Convertible Loan
Agreement is hereby deleted in its entirety and such section is hereby  replaced
with the following two sentences:

     "If the Borrower or any of its Subsidiaries shall receive any proceeds from
any sale, lease, transfer or disposition to any Person of any of its Property or
Equity Securities then the Borrower shall immediately upon receipt thereof apply
in  accordance  with Section 2.9 an amount in cash equal to 100% of the Net Sale
Proceeds  from such sale,  lease,  transfer or  disposition  to the Lenders as a
mandatory  repayment of  outstanding  Loans and reduction in the remaining  Loan
Commitment  in  accordance  with the  requirements  of  Section  2.8;  provided,
however,  that this Section  2.7(a) shall not apply to (i) sales of inventory in
the ordinary course of business, (ii) permitted Sale and Leaseback Transactions,
(iii) sales of shares of CDnow Common Stock to Time Warner and Sony  Corporation
of America ("Sony"),  or any of their respective  Subsidiaries,  pursuant to the

<PAGE> 16

Termination  Agreement dated as of the date hereof among Time Warner,  Sony, the
Borrower, Delaware Holdco Corporation,  Pennsylvania Subsidiary,  Inc., Delaware
Sub I L.L.C., Delaware Sub II L.L.C., (iv) sales of shares of Liquid Audio, Inc.
held by the Borrower or any of its  subsidiaries in accordance with the terms of
the Consent dated as of the date hereof among the Borrower, Time Warner and SMEI
or (v) the issuance of Equity  Securities for fair market value  representing up
to 19.9% of the then outstanding shares of CDnow Common Stock in connection with
any Permitted Interim Financing.  For the avoidance of doubt, if the Borrower or
any of its  Subsidiaries  shall receive any proceeds from any Permitted  Interim
Financing,  such  proceeds  shall not be applied  as a  mandatory  repayment  of
outstanding Loans or a reduction in the remaining Loan Commitment."

     Section 2.7(b) of the  Convertible  Loan Agreement is hereby deleted in its
entirety and Section 2.7(c) of the Convertible  Loan Agreement is hereby denoted
Section 2.7(b).

     SECTION 4. Amendment of Section 2.8.  Section 2.8 of the  Convertible  Loan
Agreement is hereby amended to delete the second sentence of such section in its
entirety and such sentence is hereby replaced with the following sentence:

     "The  excess  of any Net  Sale  Proceeds  over  amounts  required  to repay
principal and Interest shall reduce the remaining unused Loan Commitment.".

     SECTION 5. Amendment of Section 5.1. Section 5.1(h) of the Convertible Loan
Agreement is hereby deleted in its entirety and such section is hereby  replaced
with the following:

     " - five  Business  Days prior to the Borrower or any  Subsidiary  entering
into any  transaction  or taking any action  which  would  result in a mandatory
prepayment under Section 2.7, a written notice specifying the nature thereof.".

     SECTION 6. Amendment of Section 6.3.  Section 6.3 of the  Convertible  Loan
Agreement is hereby deleted in its entirety and such section is hereby  replaced
with the following sentence:

     "The Borrower will not, and will not permit its  Subsidiaries  to, directly
or indirectly, incur any Indebtedness other than Permitted Indebtedness, and the
Borrower will not issue any Disqualified Stock or permit any of its Subsidiaries
to issue any Disqualified Stock.".

     SECTION 7.  Amendment  of Section 8.1 Section 8.1 of the  Convertible  Loan
Agreement is hereby deleted in its entirety and such section is hereby  replaced
with the following sentence:

     "Subject to and upon compliance with the provisions of this Section 8, each
Lender, at its sole option, may, at any time and from time to time, irrespective
of whether the Borrower shall have delivered any notice  pursuant to Section 2.6
or Section  5.1,  convert (a) each Note or any portion of the  principal  amount
thereof  which equals  $500,000 or any integral  multiple  thereof,  and (b) the
amount of  accrued  and unpaid  Interest  on the Loan  represented  by such Note
(including  without  limitation  any  overdue  Interest  accruing at the Default
Rate),  into a number of fully paid and nonassessable  shares  (calculated as to
each  conversion to the nearest 1/100 of a share) of CDnow Common Stock equal to
the quotient obtained by dividing (i) the aggregate of such principal amount and
accrued and unpaid  interest to be so  converted by (ii) the  Conversion  Price,
determined as hereinafter provided, in effect at the time of conversion.

<PAGE> 17

     SECTION 8. Representations and Warranties.  (a) The Borrower represents and
warrants to each of the Lenders that (i) the Borrower  has all  requisite  power
and  authority to execute and deliver this  Amendment,  (ii) the  execution  and
delivery by the  Borrower of this  Amendment  have been duly  authorized  by all
necessary  action  on the part of the  Borrower,  (iii)  the  Borrower  has duly
executed and delivered  this  Amendment,  and,  assuming the due  authorization,
execution and delivery by each person other than the Borrower party hereto, this
Amendment  constitutes  its legal,  valid and  binding  obligation,  enforceable
against  it in  accordance  with its  terms  and (iv)  the  representations  and
warranties set forth in the Section 4 of the Convertible Loan Agreement are true
and correct in all  material  respects  on and as of the date of this  Amendment
with the same effect as though made on and as of the date hereof,  except to the
extent such representations and warranties expressly relate to an earlier date.

     (b) Time Warner represents and warrants to the Borrower and Sony Music that
(i) Time Warner has all  requisite  power and  authority  to execute and deliver
this Amendment, (ii) the execution and delivery by Time Warner of this Amendment
have been duly authorized by all necessary action on the part of Time Warner and
(iii) Time Warner has duly executed and delivered this Amendment,  and, assuming
the due  authorization,  execution  and  delivery by each person other than Time
Warner party hereto,  this Amendment  constitutes  its legal,  valid and binding
obligation, enforceable against it in accordance with its terms.

     (c) Sony Music represents and warrants to the Borrower and Time Warner that
(i) Sony Music has all requisite power and authority to execute and deliver this
Amendment,  (ii) the execution and delivery by Sony Music of this  Amendment has
been duly authorized by all necessary action on the part of Sony Music and (iii)
Sony Music has duly executed and delivered this Amendment, and, assuming the due
authorization, execution and delivery by each person other than Sony Music party
hereto,  this Amendment  constitutes  its legal,  valid and binding  obligation,
enforceable against it in accordance with its terms.

     SECTION 9. Governing Law, Submission to Jurisdiction.

     (a) THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES  HEREUNDER
SHALL BE CONSTRUED IN  ACCORDANCE  WITH AND BE GOVERNED BY THE LAWS OF THE STATE
OF NEW YORK  (WITHOUT  GIVING  EFFECT  TO THE  PRINCIPLES  THEREOF  RELATING  TO
CONFLICTS OF LAW).

     (b) Any legal action or proceeding  with respect to this  Amendment and any
action for  enforcement  of any judgment in respect hereof may be brought in the
courts of the State of New York in New York  County or of the  United  States of
America for the Southern District of New York, and, by execution and delivery of
this  Amendment,  the Borrower  hereby  accepts for itself and in respect of its
property,  generally and unconditionally,  the non-exclusive jurisdiction of the
aforesaid courts and appellate courts from any thereof. The Borrower irrevocably
consents to the service of process  out of any of the  aforementioned  courts in
any such action or proceeding by the mailing of copies  thereof by registered or
certified  mail,  postage  prepaid,  to the Borrower at its address set forth in
Section 10.3 of the Convertible Loan Agreement.  The Borrower hereby irrevocably
waives any objection  which it may now or hereafter  have to the laying of venue
of any of the aforesaid  actions or proceedings  arising out of or in connection
with this Amendment  brought in the courts  referred to above and hereby further
irrevocably  waives  and agrees not to plead or claim in any such court that any
such  action or  proceeding  brought  in any such  court has been  brought in an
inconvenient forum.  Nothing herein shall affect the right of the Lenders or any
holder of a Note (as defined in the Convertible Loan Agreement) to serve process
in any  other  manner  permitted  by law or to  commence  legal  proceedings  or
otherwise proceed against the Borrower in any other jurisdiction.


<PAGE>  18

     SECTION 10.  Counterparts.  This Amendment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts,  each
of which when so executed and delivered  shall be an original,  but all of which
shall together constitute one and the same instrument.

     SECTION 11. Headings  Descriptive.  The headings of the several Sections of
this Amendment are inserted for convenience only and shall not in any way affect
the meaning or construction of any provision of this Amendment.

     SECTION 12. Waiver of Trial by Jury. TO THE EXTENT  PERMITTED BY APPLICABLE
LAW, EACH OF THE BORROWER AND EACH LENDER HEREBY IRREVOCABLY WAIVES ALL RIGHT OF
TRIAL BY JURY IN ANY ACTION,  PROCEEDING  OR  COUNTERCLAIM  ARISING OUT OF OR IN
CONNECTION  WITH THIS AMENDMENT OR ANY OTHER LOAN DOCUMENT OR ANY MATTER ARISING
HEREUNDER OR THEREUNDER.

     SECTION 13. Full Force and Effect.  Except as  expressly  set forth in this
Amendment,  this Amendment shall not by implication or otherwise limit,  impair,
constitute  a waiver of, or  otherwise  affect the  rights and  remedies  of the
Lenders or the Borrower under the  Convertible  Loan Agreement or any other Loan
Document (as defined in the Convertible  Loan  Agreement),  and shall not alter,
modify,  amend or in any way affect any of the terms,  conditions,  obligations,
covenants or agreements contained in the Convertible Loan Agreement or any other
Loan Document,  all of which are ratified and affirmed in all respects and shall
continue in full force and effect.  Nothing contained in this Amendment shall be
deemed  to  entitle  the  Borrower  to a consent  to,  or a  waiver,  amendment,
modification  or other  change of, any of the  terms,  conditions,  obligations,
covenants or agreements contained in the Convertible Loan Agreement or any other
Loan  Document  in similar or  different  circumstances.  This  Amendment  shall
constitute a "Loan Document" for all purposes of the Convertible  Loan Agreement
and the other Loan  Documents.  As used in the Convertible  Loan Agreement,  the
terms  "hereof" and "hereto",  and words of similar  import,  shall,  unless the
context otherwise  requires,  refer to the Convertible Loan Agreement as amended
by this  Amendment.  Any  reference  in any  document  to the  Convertible  Loan
Agreement shall be deemed to be a reference to the Convertible Loan Agreement as
amended by this Amendment.

     SECTION 14. Fees and Expenses. All fees and expenses incurred in connection
with  this  Amendment  shall be  borne  by the  party  incurring  such  fees and
expenses.

<PAGE>  19

     IN WITNESS  WHEREOF,  each of the parties  hereto have duly  executed  this
Amendment, all as of the date first written above.


                                                                    CDNOW, INC.,

                                                               by /s/ Jason Olim
                                                    ----------------------------
                                                                Name: Jason Olim
                                                          Title: President & CEO


                                                  SONY MUSIC ENTERTAINMENT INC.,

                                                         by /s/ Thomas C. Tyrrel
                                                    ----------------------------
                                                         Name:  Thomas C. Tyrrel
                                                    Title: Senior Vice President
                                                             and General Counsel

                                                               TIME WARNER INC.,

                                                         by /s/ Spencer B. Hayes
                                                    ----------------------------
                                                         Name:  Spencer B. Hayes
                                                       Title: Vice President and
                                                          Deputy General Counsel


<PAGE> 20


     The  undersigned  guarantors  under the Guarantee and Collateral  Agreement
entered into in connection with the Convertible Loan Agreement hereby consent to
the  Amendment  and  acknowledge  and agree that the  Guarantee  and  Collateral
Agreement  (including  the  guarantee  provided  by such  guarantor  thereunder)
remains in full force and effect.

                                                             CDNOW ONLINE, INC.,

                                                         by /s/ David A. Capozzi
                                                         -----------------------
                                                         Name:  David A. Capozzi
                                                                Title: President


                                                                       N2K INC.,

                                                         by /s/ David A. Capozzi
                                                         -----------------------
                                                         Name:  David A. Capozzi
                                                                Title: President


                                                        CDNOW INVESTMENTS, INC.,

                                                         by /s/ David A. Capozzi
                                                         -----------------------
                                                         Name:  David A. Capozzi
                                                                Title: President


                                                         CDNOW TRADEMARKS, INC.,

                                                         by /s/ David A. Capozzi
                                                         -----------------------
                                                         Name:  David A. Capozzi
                                                                Title: President


                                                          SUPERSONIC BOOM, INC.,

                                                         by /s/ David A. Capozzi
                                                         -----------------------
                                                         Name:  David A. Capozzi
                                                                Title: President


                                                            TSI LICENSING, INC.,

                                                         by /s/ David A. Capozzi
                                                         -----------------------
                                                         Name:  David A. Capozzi
                                                                Title: President