UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of
Report (Date of earliest event reported): February 4, 2010
The
Orchard Enterprises, Inc.
(Exact
Name of Registrant as Specified in its Charter)
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Delaware
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000-51761
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20-3365526
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(State
or Other Jurisdiction of Incorporation)
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(Commission
File
Number)
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(I.R.S.
Employer Identification No.)
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23
East 4th
Street
3rd
Floor
New
York, New York
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10003
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(Registrant's
telephone number, including area code): (212)
201-9280
(Former
name or former address if changed since last report.)
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions (see General Instruction
A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
On
February 5, 2009, The Orchard Enterprises, Inc. (“The Orchard”), together with
certain of its subsidiaries (collectively, the “Company”), entered into a Loan
and Security Agreement (the “Credit Agreement”) with Peninsula Bank Business
Funding, a division of the Private Bank of the Peninsula (the “Bank”), providing for a $3 million secured revolving credit
facility which was set to expire on February 4, 2010. On February 4,
2010, the Company entered into an Amendment to the Loan and Security Agreement
which renewed the credit facility through February 4, 2011. The terms of the
renewal remain substantially similar to the terms of the original credit
facility.
The
amount of the revolving credit facility is $3 million. The Company
may borrow, repay and reborrow under the revolving credit facility at any time
an aggregate amount that does not exceed 80% of the Company’s eligible accounts
receivables. Outstanding advances made under the facility bear
interest at prime plus 4% per annum, provided that the minimum amount of
interest shall not be less than 8% per annum and the maximum amount of interest
shall not be greater than 10% per annum. The Company is required to
pay minimum quarterly interest of $20,000. The Company’s line of
credit is collateralized by its accounts receivable and inventory and requires
the Company to comply with customary affirmative and negative covenants
principally relating to use and disposition of assets and to the satisfaction of
financial covenants (which include meeting quarterly net income/loss projections
and cash projections). In addition, the Credit Agreement contains customary
events of default. Upon the occurrence of an uncured event of
default, among other things, the Bank may declare that all amounts owing under
the Credit Agreement are due and payable. Each of The Orchard’s
direct and indirect subsidiaries that is not a borrower with The Orchard under
this revolving credit arrangement has guaranteed the obligations of the Company
under the Credit Agreement. As of the date of this report,
there is no amount outstanding under this revolving credit
facility.
A copy of
the Amendment to the Loan and Security Agreement is filed herewith as Exhibit
10.1. A copy of the Loan and Security Agreement was filed as Exhibit
10.1 to the Company’s Current Report on Form 8-K dated February 5, 2009. The
foregoing summary of the Amendment to the Loan and Security Agreement is
qualified in its entirety by the text of the Amendment to the Loan and Security
Agreement set forth in Exhibit 10.1 to this Current Report, which is
incorporated into this Item 1.01 by reference.
Item
2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
The
information contained in Item 1.01 hereof is incorporated by reference into
this Item 2.03.
Item 9.01 Financial Statements and
Exhibits.
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Exhibit
Number
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Description
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10.1
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Amendment
to Loan and Security Agreement entered into as of February 4, 2010 between
Peninsula Bank Business Funding, a division of The Private Bank of the
Peninsula and The Orchard Enterprises, Inc., Digital Rights Agency, Inc.
and Orchard Enterprises NY, Inc.
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Signatures
Pursuant
to the requirements of the Securities and Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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The
Orchard Enterprises, Inc.
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Date:
February 10, 2010
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By:
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/s/ Nathan Y. Fong |
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Name:
Nathan Y. Fong |
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Title: Chief
Financial Officer
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Exhibit
Index
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Exhibit
Number
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Description
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10.1
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Amendment
to Loan and Security Agreement entered into as of February 4, 2010 between
Peninsula Bank Business Funding, a division of The Private Bank of the
Peninsula and The Orchard Enterprises, Inc., Digital Rights Agency, Inc.
and Orchard Enterprises NY, Inc.
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