THE
ORCHARD ENTERPRISES, INC.

    


    Fairness
Opinion Addendum

    


    Offer by
Dimensional Associates, LLC

    to Buyout
Remaining Common Stockholders

    of The
Orchard Enterprises, Inc.

    At a Per
Share Price of $2.05

    


    March 15,
2010

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    

     

    
      	
              1.0

            	
              STATEMENT
      OF PURPOSE

            


    

     

    We have
been informed by the Special Committee (the “Committee”) of the Board of
Directors of The Orchard Enterprises, Inc. (“Orchard” or “Company”) that
Dimensional Associates, LLC (“Dimensional”), a current preferred and common
shareholder of the Company, has tendered an offer to purchase all of the
remaining outstanding common shares (the “Common Shares”) of the Company. The
offer consists of a cash payment in the amount of $2.05 per share (the
“Offer”).

     

    The above
transaction is hereinafter collectively referred to as the
"Transaction".

     

    The
Special Committee has requested that we perform certain procedures and, upon the
completion of those procedures, issue a letter setting forth our opinion as to
whether the Transaction is fair, from a financial point of view, to the holders
of the remaining Common Shares.

     

    
      	
              2.0

            	
              EVALUATION
      PROCEDURES

            


    

     

    The
procedures we have employed in evaluating whether the Transaction is fair, from
a financial point of view, to the holders of the Common Shares, include the
following:

     

    
      	
              1.

            	
              We
      have estimated the Fair Market Value and Strategic Values of the common
      equity of the Company on a per share
basis.

            


    

     

    
      	
              2.

            	
              We
      have compared the estimated Fair Market Value and Strategic Values of the
      common equity of the Company on a per share basis to the Offer in order to
      ascertain whether the Transaction is fair, from a financial point of view,
      to the holders of the Common
Shares.

            


    

     

    The term
"Fair Market Value", as used in our fairness opinion letter and in this
Addendum, is defined as the price at which property would change hands between a
willing buyer and a willing seller when the former is not under any compulsion
to buy and the latter is not under any compulsion to sell, and both parties are
able, as well as willing, to trade and are well informed about the asset and the
market for such asset.

     

    The term
“Strategic Value”, as used in our fairness opinion letter and this Addendum, is
defined as the value based on expected earnings or monetary return to a specific
investor, in this case Dimensional Associates, LLC.

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    
      
        	
                THE
      ORCHARD ENTERPRISES, INC.

              	
                Page 2    

              


      

    

     

    
      	
              3.0

            	
              INDICATED
      RESULTS

            


    

     

    Procedure 1 – Equity
Valuation of Orchard

     

    Our
valuation analysis for Orchard is based in part on its audited financial
statements for the years ended December 31, 2006 to December 31, 2008, unaudited
financial statements for the nine-months ended September 30, 2009 and management
provided financial forecasted income statements for the years ending December
31, 2010 to 2014. A summary of the income statements, balance sheets and
forecasts are included in Exhibits 1-4.

     

    The
market value of invested capital (“MVIC”) or business enterprise value is the
total capitalization value for an entity. By definition, the MVIC includes the
total market value of all classes of stock plus all interest bearing
debt.

     

    The
equity value of Orchard is considered equal to the MVIC since no interest
bearing debt existed as of both September 30, 2009 and March 15,
2010.

     

    In
analyzing the equity value of Orchard, the Market and Income Approaches of
valuation were employed.

     

    Market
Approach

     

    The
market approach compares Orchard with similar companies that have recently been
sold or with companies that are publicly traded. The primary criteria for
selecting guideline comparable companies include similarities in lines of
business and other relevant factors such as size, profitability, leverage,
growth prospects, market position and risk.

     

    The
Guideline Public Company Analysis Method

     

    One of the fundamental approaches to
estimating the value of a business is to look to the public market for evidence
of the prices investors are willing to pay for similar businesses. The guideline
public company analysis method derives valuation multiples from public companies
engaged in the same or similar lines of business as the subject company in order
to develop relationships between an entity’s value and the various calculated
value measurement multiples.

     

    After
inquiring of management regarding public companies that are competitors and
analyzing various databases in order to identify public companies that are
engaged in providing various digital media services including music and audio
recordings and video programming, we selected nine publicly traded companies for
a comparative analysis. Rarely is there an exact comparability between the
subject of the valuation and the companies selected for comparative evaluation.
Differences typically exist in terms of size, products, product mix and
structure.

    


    

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

    
      	
              THE
      ORCHARD ENTERPRISES, INC.

            	
              Page 3    

            


    

     

    Despite
the potential infirmities underlying the comparative evaluation process, it is
still a valid method for formulating valuation multiples. First of all, to the
extent the companies are engaged in business lines similar to that of Orchard,
investor perception as to the desirability or attractiveness of an investment in
Orchard can be ascertained. Secondly, multiples indicated by the guideline
publicly traded companies can be adjusted to reflect the economic advantages or
disadvantages of Orchard on a comparative basis.

    


    The nine
publicly traded companies selected for comparative evaluation with Orchard are
summarized below.

     

    
      	
               
      

            	
              t

            	
              Glu
      Mobile Inc.: Glu Mobile Inc. designs, markets, and sells games for
      mobile phones worldwide. The company’s games are based on licensed
      intellectual property (Call of Duty, Deer Hunter, and World Series of
      Poker) and its own intellectual property (Brain Genius, My Hangman, and
      Bonsai Blast). The Company sells its products through wireless carriers
      and other distributors.

            


    

     

    
      	
               
      

            	
              t

            	
              EDGAR
      Online, Inc.: EDGAR Online, Inc creates and distributes financial
      data and public filings for equities, mutual funds, and a range of other
      publicly traded assets. The Company delivers its information products in
      the form of online end-user subscriptions, as well as through data
      licenses and bulk data feeds. The company also engages in advertising and
      e-commerce activities. The Company sells its subscriptions and data feeds
      directly to end-users or embedded in other websites, and through a range
      of data redistributors.

            


    

     

    
      	
               
      

            	
              t

            	
              Limelight
      Networks, Inc.: Limelight Networks, Inc is a provider of content
      delivery network services. It is engaged in providing content for media
      companies, or content providers, including businesses operating in the
      television, music, radio, newspaper, magazine, software and social media
      industries, as well as enterprises and government entities doing business
      online.

            


    

     

    
      	
               
      

            	
              t

            	
              Salary.Com,
      Inc.: Salary.com, Inc. is a provider of on-demand compensation,
      payroll, human resource management, performance management, and competency
      management solutions in the human capital software-as-a-service (SaaS)
      market. The Company offers software and services that are integrated with
      its data sets to help businesses and individuals manage pay and employee
      performance.

            


    

     

    
      	
               
      

            	
              t

            	
              WebMediaBrands
      Inc.: WebMediaBrands Inc is a global provider of images, original
      information and events for information technology (IT), business and
      creative professionals. WebMediaBrands includes three distinct online
      networks: Internet.com for information technology (IT), business
      professionals and for developers and Mediabistro.com and Graphics.com for
      media and creative professionals.

            


    

     

    

    
    

    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

    
      	
              THE
      ORCHARD ENTERPRISES, INC.

            	
              Page 4    

            


    

     

    
      	
               
      

            	
              t

            	
              Image
      Entertainment, Inc.: Image Entertainment, Inc is a licensee and
      distributor of entertainment programming in North America. The Company
      releases its library of content on a variety of formats and platforms,
      including digital versatile disc (DVD), blu-ray disc (Blu-ray), digital
      (video-on-demand, electronic sell-through and streaming), broadcast
      television, cable, and satellite, theatrical and non-theatrical
      exploitation. Image also acquires rights to audio content for distribution
      via digital platforms and on compact disc
(CD).

            


    

     

    
      	
               
      

            	
              t

            	
              RealNetworks
      Inc: RealNetworks, Inc. creates and delivers digital media content
      such as music, games and video to consumers worldwide. It sells digital
      entertainment services to consumers for use with a variety of platforms
      such as personal computer (PC), portable music players, mobile phones,
      home entertainment systems and other consumer electronic devices. The
      Company’s products and services include RealPlayer, Rhapsody, and
      RealArcade.

            


    

     

    
      	
               
      

            	
              t

            	
              Internap
      Network Services Corp.: Internap Network Services Corporation
      markets products and services that optimize the performance and
      reliability of business Internet applications for e-commerce, customer
      relationship management (CRM), multimedia streaming, voice-over Internet
      protocol (VoIP), virtual private networks (VPNs) and supply chain
      management. The Company also provides products and services for storing
      and delivering audio and video digital media to audiences over the
      Internet through a subsidiary, VitalStream Holdings,
  Inc.

            


    

     

    
      	
               
      

            	
              t

            	
              LiveWire
      Mobile, Inc: LiveWire Mobile, Inc. is a provider of managed
      personalization services for mobile operators and mobile subscribers. The
      Company’s integrated managed service offerings, which includes ringback
      tones, ringtones, full track downloads, and other applications, as well
      as, dedicated content and service marketing, integrated storefront
      management and merchandising. The Company sells its offerings as a managed
      service to mobile operators who then offer these services to their
      subscribers.

            


    

     

    Comparative
Analysis

     

    The above
companies have annual sales ranging from $16.8 million to $562.3 million. The
MVIC or business enterprise minority values of these companies ranged from $10.7
million to $334 million. Market and financial data on the publicly traded
companies is presented in Exhibit 5 to this addendum. The financial data on
these companies was obtained from their most recent 10-K and 10-Q filings with
the Securities and Exchange Commission.

    


    Based
upon the financial data set forth as Exhibit 5 to this Addendum, we formulated
valuation multiples which were applied to the appropriate earnings stream for
Orchard. In selecting the proper industry multiple to apply to Orchard, we
utilized a public guideline company ranking analysis presented in Exhibit 6
which summarizes various profitability, liquidity and leverage ratios for
Orchard and the comparative public guideline companies. Orchard did not have any
tangible net book value as of September 30, 2009.

     

    

     

    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    
      	
              THE
      ORCHARD ENTERPRISES, INC.

            	
              Page 5    

            


    

     

    Valuation
multiples have been developed in order to calculate total capitalization (debt
and equity) or MVIC for the nine public guideline companies. An invested capital
valuation method is commonly used to minimize the effects of leverage between
the subject company and the guideline companies due to differences in capital
structures. Cash and marketable securities are often subtracted out of the MVIC
when there is excess cash or securities or shortages of cash between the
guideline companies and the subject company. Our definition of MVIC, for this
analysis, subtracts cash and marketable securities. Since cash has been
subtracted in developing MVIC multiples, after applying these multiples to the
subject company, cash is then added back to arrive at an indication of
value.

    


    In using
the Market Approach, we developed MVIC multiples for the guideline public
companies utilizing the last twelve months (“LTM”) of financial data available
which ended no later than December 31, 2009. For some of the comparables
including Orchard, public financial data was only available through September
30, 2009. We developed and applied multiples to Orchard’s normalized results
from operations.

    


    The
adjustments posted to Orchards’s reported net loss for the twelve months ended
September 30, 2009 (Exhibit 3) consisted of the following non-recurring expense
and income items:

     

    
      	
            	
              ·

            	
              Removing
      $14.114 million of goodwill impairment
charges

            


    

    
      	
               
      

            	
              ·

            	
              Removing
      $312,000 of restructuring charges

            


    

    
      	 	
              ·

            	
              Adding
      back $46,000 gain from property and equipment
  disposal

            


    

    
      	 	
              ·

            	
              Removing
      $462,000 of non-operating income

            


    

     

    After
posting the adjustments noted above, the Company had a loss from operations and
negative EBITDA for the twelve months ended September 30, 2009 as reflected in
Exhibit 3.

     

    Due to
operational losses, we were unable to develop and apply commonly used income
multiples such as MVIC to earnings before interest, taxes, depreciation and
amortization (EBITDA) to historical results. We calculated MVIC multiples of
revenue for the nine public guideline companies based on results as of September
30, 2009 (December 31, 2009 when available) and stock prices as of March 10,
2010 with our selected pricing multiples to be applied against Orchard’s LTM of
historical revenues for period ended September 30, 2009 as follows:

    


    
      
        
          
            
              
                
                  
                    	
                            Selected Pricing

                          	 	
                            Industry Multiples

                          	 
	
                            Multiple

                          	 	
                            Low

                          	 	 	
                            High

                          	 	 	
                            Mean

                          	 	 	
                            Median

                          	 	 	
                            Selected

                          	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                            MVIC/Revenues

                          	 	 	0.31	 	 	 	1.83	 	 	 	0.82	 	 	 	0.64	 	 	 	0.60	 


                  

                

              

            

          

        

      

    

     

    

     

    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

    
      	
              THE
      ORCHARD ENTERPRISES, INC.

            	
              Page 6    

            

 

    Revenue
multiples for the nine public comparable companies had a median multiple of .64
and a low and high multiple of .31 and 1.83, respectively. We selected and
applied a revenue multiple of .60 to the LTM of adjusted revenues of $61.729
million for the Company. The revenue multiple selected, which approximates the
median, was used since Orchard’s results of operations are similar to guideline
public companies, but its financial position is not comparable with regards to
liquidity ratios and lack of tangible net worth for the Orchard.

     

    We also
calculated MVIC to EBITDA for the guideline companies to apply against Orchard’s
forecasted 2010 base case results from operations from Exhibit 4. Again, in
selecting the proper industry multiple to apply to Orchard, we utilized a public
guideline company ranking analysis presented in Exhibit 6. The multiples
calculated from the public guideline companies and our selected pricing multiple
to apply against Orchard’s forecasted 2010 base case EBITDA is as
follows:

     

    
      
        
          
            	
                    Selected Pricing

                  	 	
                    Industry Multiples

                  	 
	
                    Multiple

                  	 	
                    Low

                  	 	 	
                    High

                  	 	 	
                    Mean

                  	 	 	
                    Median

                  	 	 	
                    Selected

                  	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    MVIC/EBITDA

                  	 	 	3.41	 	 	 	41.35	 	 	 	18.61	 	 	 	11.08	 	 	 	10.00	 


          

        

      

    

    


    EBITDA
multiples for the nine public comparable companies ranged from 3.41 to 41.35.
The mean and median multiples were 18.61 and 11.08, respectively. We selected
and applied an EBITDA multiple of 10 to the 2010 forecasted EBITDA of $2.475
million for the Company. The EBITDA multiple selected, which is slightly below
the median, is warranted since we are applying a multiple calculated with
historical results of operations for the public comparables against forecasted
results for Orchard (risk of uncertainty) and Orchard has lower liquidity ratios
than the public comparables.

     

    Our
definition of MVIC for this valuation excluded cash and marketable securities.
After applying the appropriate multiples, $4.5 million of cash is required to be
added back to the indication of value. This balance represents the cash position
as of March 15, 2010. In addition, as previously discussed, MVIC represents a
value for both debt and equity. Therefore, in order to estimate the value of the
Company’s total equity, we need to subtract the value of its interest bearing
debt. As of both September 30, 2009 and March 15, 2010, Orchard had no
outstanding interest bearing debt.

     

    The
guideline public company method, by definition, provides a freely–tradable or a
marketable, minority value. Therefore, the value indication represents a
marketable, minority interest operating under a going concern premise of value.
In order to determine equity value on a controlling interest basis, a control
premium needs to be added. In almost all transactions in which control is
transferred, a significant premium is paid. Mergerstat/Shannon Pratt’s Control
Premium Study (Santa Monica FactSet Mergerstat LLC 2007) indicates that control
premiums have ranged from 20.7% to 37.7%. We also searched the Mergerstat/BVR
Control Premium Study by Standard Industrial Classification (SIC) code 7375
(Informational Retrieval Services) which correspond to the industry that Orchard
operates within. We applied a 20% control premium to arrive at an indication of
controlling, marketable equity value.

     

    

     

    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

    
      	
              THE
      ORCHARD ENTERPRISES, INC.

            	
              Page 7    

            


    

     

    Orchard
has 448,707 shares of Series A Preferred stock outstanding with a liquidation
preference of $24,992,980 as of September 30, 2009 and March 15, 2010. In order
to calculate the residual value available to common shareholders, the preferred
shareholders liquidation preference must first be subtracted. Orchard has
6,378,252 common shares issued and outstanding at March 15, 2010.

     

    Based
upon the above described multiples and modifications to indicated values, equity
value indications ranged from $1.58 per share based on MVIC to Orchard’s 2010
forecasted EBITDA to $3.90 per share based on MVIC to Orchard’s LTM of
historical revenues for the period ended September 30, 2009. The $3.90
indication of value based on revenues was considered an outlier. See Exhibit 12
for indication of values summary.

     

    Guideline
Company Transaction Method

     

    The
guideline company transaction analysis method derives valuation multiples from
the acquisition prices of companies that operate in similar industries to the
subject company. The value of the subject company is then estimated by applying
an appropriate valuation multiple derived from the transactions against the
appropriate benefit stream of the subject company.

     

    We
analyzed publicly reported filings as well as various transaction databases
including Pratt’s Stats,
Public Stats and Mergerstat and identified ten transactions for companies
that operate or provide digital media services including music and audio
recordings and video programming. All of the transactions selected were stock
deals. A brief description of each of the selected guideline company
transactions is summarized below:

     

    
      	
            	
              t

            	
              Visual
      Connection, was purchased by KIT Digital, Inc., a publicly held company,
      in October 2008 for total consideration (MVIC) of $4.3 million. Visual
      Connection is a digital media and IPTV solutions provider. Visual
      Connection reported revenues of $10.3 million in 2007. Reported EBITDA was
      not meaningful.

            


    

     

    
      	
            	
              t

            	
              Audible,
      Inc. was purchased by Amazon.com, Inc., a publicly held company, in March
      2008 for total consideration (MVIC) of $277.4 million. Audible, Inc.
      provides audio services for content download and playback on personal
      computers. Audible, Inc. reported revenues of $101.9 million in the last
      twelve months. Reported EBITDA was $2.3 million for the same
      period.

            


    

     

    

     

    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

    
      	
              THE
      ORCHARD ENTERPRISES, INC.

            	
              Page 8    

            


    

     

    
      	
               
      

            	
              t

            	
              Vyvx
      Ads Business (A carve-out of Level 3 Communications Inc., a publicly held
      company), was purchased by DG Fast Channel Inc., a publicly held company,
      in June 2008 for total consideration (MVIC) of $129 million. Vyvx provides
      video and audio content distribution to advertisers. Vyvx reported
      revenues of $36.4 million in 2007. Reported EBITDA was $10.5
      million.

            


    

     

    
      	
            	
              t

            	
              Applied
      Graphics Technologies Inc. was purchased by Digital Generation Systems,
      Inc, a public held company, in June 2004 for total consideration (MVIC) of
      $14.1 million. Applied Graphics Technologies, Inc. distributes programming
      and advertising content to television and radio stations. Reported
      revenues were $21.5 million in 2002. Reported EBITDA was
      $274,000.

            


    

     

    
      	
            	
              t

            	
              Good
      Times Entertainment, a privately held company, was purchased by GAIAM,
      Inc., a public held company, in September 2005 for total consideration
      (MVIC) of $34.4 million. Good Times Entertainment is a distributor of
      entertainment programming and home video products. Good Times reported
      revenues of $141.9 million for 2004. Reported EBITDA was not
      meaningful.

            


    

     

    
      	
            	
              t

            	
              Movielink,
      LLC, a privately held company was purchased by Blockbuster, Inc., a
      publicly held company, in August 2007 for total consideration (MVIC) of $7
      million. Movielink, LLC is a digital distributor of motion pictures over
      the internet. Movielink LLC reported revenues of $4 million in 2006.
      Reported EBITDA was not meaningful.

            


    

     

    
      	
            	
              t

            	
              Creatas,
      LLC, a privately held company was purchased by Jupitermedia Corp, a
      privately held company, in March 2005 for total consideration (MVIC) of
      $60.4 million. Creatas, LLC markets and distributes digital images and
      provides visual content. Creatas, LLC reported revenues of $43 million in
      2004. Reported EBITDA was $2.9
million.

            


    

     

    
      	
            	
              t

            	
              Trusonic
      Inc, was purchased by Fluid Media Networks, Inc., a publicly held company,
      in October 2007 for total consideration (MVIC) of $6 million. Trusonic
      provides digital background music and messaging services via the internet.
      Trusonic reported revenues of $2.8 million for 2006. Reported EBITDA was
      not meaningful.

            


    

     

    
      	
            	
              t

            	
              Ringtone.com,
      LLC, a privately held company, was purchased by New Motion, Inc., a
      publicly held company, in June 2008 for total consideration (MVIC) of $8.6
      million. Ringtone.com provides downloadable mobile content including
      ringtones, background wallpaper and text alerts. Ringtone.com reported
      revenues of $10.2 million in 2007. Reported EBITDA was not
      meaningful.

            


    

     

    


     

    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

    
      	
              THE
      ORCHARD ENTERPRISES, INC.

            	
              Page 9    

            


    

     

    
      	
               
      

            	
              t

            	
              AMV
      Holding Limited, a privately held company, was purchased by Mandalay
      Media, Inc. a publicly held company, in October 2008 for total
      consideration (MVIC) of $22.5 million. AMV Holding Limited provides direct
      to consumer mobile internet content and services. AMV Holding Limited
      reported $29.5 million and $4.2 million in revenues and EBITDA,
      respectively, for 2007.

            


    

    


    The last
reported annual sales of the target companies for the ten transactions selected
ranged from $2.8 million to $141.9 million. See Exhibit 7 for a summary of the
transaction selected.

    We
developed MVIC to revenue multiples from the ten guideline company transactions
selected and applied to the LTM of revenues reported by Orchard for the period
ended September 30, 2009. The multiple of revenues calculated from the guideline
company transactions and our selected pricing multiple to apply against
historical reported revenues for Orchard is as follows:

     

    
      
        
          
            	
                    Selected Pricing

                  	 	
                    Industry Multiples

                  	 
	
                    Multiple

                  	 	
                    Low

                  	 	 	
                    High

                  	 	 	
                    Mean

                  	 	 	
                    Median

                  	 	 	
                    Selected

                  	 
	
                    MVIC/Revenues

                  	 	 	0.24	 	 	 	3.54	 	 	 	1.44	 	 	 	1.12	 	 	 	0.60	 


          

        

      

    

    


    Revenue
multiples had a median multiple of 1.12 and a low and high multiple of .24 and
3.54, respectively. We selected and applied a revenue multiple of .60, which was
between the low and the median, to the LTM of adjusted revenues of $61.729
million for the Company. The lower than median revenue multiple is warranted for
the following reasons:

     

    
      	
               
      

            	
              ·

            	
              Several
      of the guideline companies had positive EBITDA (ranging from 1% to 29% of
      revenues).

            


    

    
      	
               
      

            	
              ·

            	
              Most
      of the guideline company transactions were prior to the economic recession
      (3rd
      quarter of 2008) thus valuation multiples were higher than current
      multiples.

            


    

    
      	
               
      

            	
              ·

            	
              Orchard
      has no historical EBITDA; guideline transactions with no EBITDA had a .85
      median multiple and transactions with no EBITDA and greater than $10
      million in revenues had a .42 median multiple of
  revenues.

            


    

    
      	
               
      

            	
              ·

            	
              Orchard
      has negative working capital.

            


    

    


    In order
to estimate the value of the Company’s total equity, we need to subtract the
value of its interest bearing debt. As stated previously, as of both September
30, 2009 and March 15, 2010, Orchard had no outstanding interest bearing debt.
In addition, we subtracted Series A Preferred stock liquidation preferences of
$24,992,980 in order to calculate the residual value available to common
shareholders.

     

    

     

    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

    
      	
              THE
      ORCHARD ENTERPRISES, INC.

            	
              Page 10    

            


    

     

    Based
upon the above described revenue multiple and modifications to indicated value,
an equity value indication of $1.89 per share was calculated based on 6,378,252
common shares issued and outstanding. See Exhibit 12 for indication of value
summary.

     

    Orchard
Stock Price

     

    The
closing stock price for Orchard on March 12, 2010 was $1.70 per common share. A
control premium, as previously discussed, of 20% was added to the minority,
marketable per share value of $1.70. The resulting stock price on a controlling
basis would approximate $2.04 per share. See Exhibit 12 for indication of value
summary.

     

    Income
Approach

     

    In
applying the Income Approach, a discounted cash flow analysis was employed. This
analysis was based on management’s “base case scenario”, “worst case scenario”
and “aggressive case scenario” forecasts of net cash flows for 2010 to 2014 as
illustrated in Exhibit 4.

     

    In
addition, we considered the strategic nature of the Transaction and the
possibility that Dimensional could integrate the operations of Orchard into its
eMusic operation and would take Orchard private. Management of Orchard estimated
the potential savings to Dimensional from these two scenarios. We assumed that a
buyer and seller would most likely negotiate a price based on sharing equally in
the savings. The estimated savings are illustrated in Exhibit 10.

     

    We
therefore considered two scenarios using the discounted cash flow method. The
first scenario is based on Orchard remaining a public company and their
forecasted results without the Dimensional Transaction. This scenario assumes
that Orchard will continue to take advantage of its net operating tax loss
carryforwards. The second is based on the assumption that Dimensional would
acquire the remaining common shares, integrate the operations of Orchard into
its eMusic operation and take Orchard private thereby creating synergistic and
cost savings to Dimensional. This scenario assumes that, due to limitations
imposed on net operating tax loss carryforwards as a result of certain changes
in ownership, such net operating tax loss carryforwards would be significantly
limited.

     

    For each
scenario, a sensitivity analysis was also performed using base case, worst case
and aggressive case scenarios. In calculating the per share value using the
discounted cash flow method, we utilized the aggressive case scenario as this
scenario illustrates the highest value that the Company would be expected to
achieve. The results of these discounted cash flow scenarios are illustrated in
Exhibit 8 and 9.

     

    

     

    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

    
      	
              THE
      ORCHARD ENTERPRISES, INC.

            	
              Page 11    

            


    

     

    The
discounted cash flow technique has two value components. The first equals the
sum of the present value of the cash flows over the forecast period. The
residual value, or terminal value, equals the present value of the forecasted
cash flow in the terminal year, capitalized into perpetuity using a
capitalization rate derived from the discount rate. The residual reflects the
ongoing potential of the business.

     

    Available
cash flows are typically equal to the sum of net income plus non-cash charges
such as depreciation and amortization, less capital expenditures and working
capital requirements.

     

    A
company's cost of capital, or discount rate, is equal to the weighted average of
its after-tax cost of debt and equity. This rate represents a rate of return
that could be expected by an investor given the risk associated with the
investment. Exhibit 11 illustrates the results of our weighted average cost of
capital analysis.

     

    We used
two primary methods to estimate the cost of equity: the modified capital asset
pricing model (“MCAPM”) and the build-up method. We used two data sources in
applying these methods: Ibbotson Associates (acquired by Morningstar), and Duff
& Phelps. Both have performed extensive studies regarding the cost of
equity. The Duff & Phelp’s studies rely upon alternative measurements of
size to assess the risk of a company under a form of the build-up
method.

     

    We begin
with a safe rate of return using the return on a 20-year U.S. Treasury Bond.
Added to the safe rate of return is an equity risk premium representing the
additional risk that the investor would encounter from investing in large
company equity securities. A size premium is then added for the additional
return the investor would expect over the large equity security by investing in
smaller company equities.

     

    Industry
specific risk is considered for business and operating risks associated with the
industry in which the subject company operates. Finally, a premium representing
risks specific to the subject company is assessed.

     

    In the
MCAPM approach, the market premium is adjusted by the market beta which most
represents the industry of the subject company. In this case, we utilized the
betas of the comparable public companies. We did not un-lever and re-lever the
betas since the capital structure of the comparable public companies for the
most part, were similar the subject Company. The mean beta was selected as the
most appropriate beta to use in the MCAPM approach.

     

    

     

    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

    
      	
              THE
      ORCHARD ENTERPRISES, INC.

            	
              Page 12    

            


    

     

    The
discount rate should also be increased if there are significant company-specific
risks. We added a 1% company-specific risk rate to discount rate due to the
following company-specific risks of the subject Company:

     

    
      	
               
      

            	
              1.

            	
              The
      Company’s ability to achieve revenue levels and profitability as
      forecasted.

            


    

    
      	
               
      

            	
              2.

            	
              The
      Company’s ability to capitalize on its business
  strategy.

            


    

    
      	
               
      

            	
              3.

            	
              The
      impact on the Company of the general economic
  recession.

            


    

    
      	
               
      

            	
              4.

            	
              The
      uncertainty of costs and reputation risk of Dimensional’s proposal on the
      overall Company and its financial
results.

            


    

     

    We
concluded that the appropriate discount rate, based on the weighted average cost
of capital of the Company was 20% at the valuation date. This rate represents a
rate of return that could be expected by the specific investor given the risk
associated with the investment. The residual year’s net cash flows were
estimated using a long term sustainable growth rate and “capitalized” using the
capitalization rate. The capitalization rate was derived by subtracting this
long term growth rate from the discount rate.

     

    The
capitalized residual value, as well as the net cash flows for the forecast
period, was discounted back to a present value as of December 31, 2009 using the
discount rate. The sum of these values plus any present value of net operating
tax loss carryforwards available after 2014 resulted in an indication of the
Company’s market value of invested capital at December 31, 2009, which
approximates the value as of March 15, 2010.

     

    The
terminal or residual value of the Company has been estimated through use of the
Gordon Growth Model. This model estimates a residual value through the
capitalization of a stabilized amount that is assumed to grow annually at a
constant growth rate. This model is expressed as follows:

     

    
      
        
          
            
              
                
                  
                    
                      	
                              RV
      = (Eo
      x (1 + g))/ (r – g)

                            
	 
      	 
      	 
      
	
                              Where:       
      

                            	
                              RV

                            	
                              = 
      Residual Value

                            
	 
      	
                              Eo

                            	
                              = 
      Stabilized Earnings Stream

                            
	 
      	
                              g

                            	
                              = 
      Long-term Sustainable Growth Rate

                            
	 
      	
                              r

                            	
                              = 
      Discount
Rate

                            


                    

                  

                

              

            

          

        

      

    

    


    Assumptions
required under the Gordon Growth Model include an estimate of the future
stabilized earnings stream and the long-term sustainable growth rate. The
long-term sustainable growth rate has been estimated at 4%. The Residual column
in Exhibits 8 and 9 present the stabilized, net cash flow stream used in our
calculation.

     

    

     

    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

    
      	
              THE
      ORCHARD ENTERPRISES, INC.

            	
              Page 13    

            


    

     

    Based
upon this long-term earnings growth rate, the stabilized earnings stream is
increased at "1 + g" or by a factor of 1.04. The resulting amount is
then capitalized into perpetuity at "r – g", or 16% (20% - 4%) in order to
provide a terminal value of the Company at the end of 2014. The indicated future
value of the Company is then calculated using this capitalization rate. This
calculated future value is discounted to present value using the discount
rate.

     

    Preferred
stock preferences were then subtracted to arrive at the final value available to
the common stockholders. The value available to the common stockholders was
divided by the number of common shares outstanding as of March 15, 2010 to
determine our per share values.

     

    Summary
of Fairness Evaluation for Orchard

     

    Our
valuation procedures considered both the Market and Income Approaches. The
Market Approach produced the following value indications for the common equity
of Orchard on a per share basis:

    


    
      
        
          
            	
                    Guideline
      Public Company Method:

                  	 	 	 
	
                    –
      MVIC to LTM revenues ended September 30, 2009

                  	 	$	3.90	 
	
                    –
      MVIC to 2010 forecasted EBITDA

                  	 	$	1.58	 
	
                    Guideline
      Transaction Method

                  	 	$	1.89	 
	
                    Current
      Stock Price (March 12, 2010) Minority Value

                  	 	$	1.70	 
	
                    Current
      Stock Price (March 12, 2010) Control Value

                  	 	$	2.04	 


          

        

      

    

    


    The
Income Approach produced the following value indications for the common equity
of Orchard on a per share basis:

    


    
      
        
          
            	
                    Discounted
      Cash Flow Method – Non-Strategic

                  	 	$	1.05	 
	
                    Discounted
      Cash Flow Method – Strategic

                  	 	$	1.37	 


          

        

      

    

    


    See
Exhibit 12 for indication of values summary.

     

    Procedure 2 – Comparison of
the value indications of the Equity of Orchard on a per share basis to the Offer
on a per share basis.

     

    We
considered the methods and values in Exhibit 12 in our analysis. Based upon the
foregoing analysis, we believe the appropriate range of indicated values for the
common stock of Orchard as of March 15, 2010 is between $1.37 per share and
$2.04 per share. The Offer from Dimensional Associates, LLC is $2.05 per
share.

     

    The
indicated values per share, as summarized in Exhibits 12 and 14, reflects that
the majority of the values are equal to or below $2.05 per share. We therefore
believe that this transaction is fair, from a financial point of view, to the
remaining common stockholders of The Orchard Enterprises, Inc.

     

    Fesnak
and Associates, LLP

     

    

     

    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    EXHIBITS

     

    
 

    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

    Exhibit
1

    The
Orchard Enterprises, Inc.

    Summary
of Historical and Common Size Balance Sheets

    ($000's)

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	 
      	 	
                                    September 30,

                                  	 	 	
                                    December 31,

                                  	 	 	
                                    Public

                                  	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	 	
                                    2009

                                  	 	 	
                                    2008

                                  	 	 	
                                    2007

                                  	 	 	
                                    2006

                                  	 	 	
                                    Comps

                                  	 	 	
                                    2009

                                  	 	 	
                                    2008

                                  	 	 	
                                    2007

                                  	 	 	
                                    2006

                                  	 
	 
      	 	
                                    $

                                  	 	 	
                                    
                                      $

                                    

                                  	 	 	
                                    
                                      $

                                    

                                  	 	 	
                                    
                                      $

                                    

                                  	 	 	
                                    %

                                  	 	 	
                                    
                                      %

                                    

                                  	 	 	
                                    
                                      %

                                    

                                  	 	 	
                                    
                                      %

                                    

                                  	 	 	
                                    
                                      %

                                    

                                  	 
	
                                    Assets

                                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                    Current
      assets:

                                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                    Cash
      and cash equivalents

                                  	 	 	4,695	 	 	 	4,521	 	 	 	10,637	 	 	 	1,676	 	 	 	—	 	 	
                                    11.1

                                  	 	 	 	7.8	 	 	 	20.0	 	 	 	25.6	 
	
                                    Accounts
      receivable, net

                                  	 	 	8,936	 	 	 	12,577	 	 	 	7,636	 	 	 	3,127	 	 	 	—	 	 	 	21.2	 	 	 	21.7	 	 	 	14.4	 	 	 	47.8	 
	
                                    Inventory

                                  	 	 	102	 	 	 	133	 	 	 	0	 	 	 	0	 	 	 	—	 	 	 	0.2	 	 	 	0.2	 	 	 	—	 	 	 	—	 
	
                                    Royalty
      advances

                                  	 	 	5,420	 	 	 	2,720	 	 	 	3,508	 	 	 	586	 	 	 	—	 	 	 	12.8	 	 	 	4.7	 	 	 	6.6	 	 	 	9.0	 
	
                                    Prepaid
      expenses and other current assets

                                  	 	 	617	 	 	 	981	 	 	 	440	 	 	 	174	 	 	 	—	 	 	 	1.5	 	 	 	1.7	 	 	 	0.8	 	 	 	2.7	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                    Total
      current assets

                                  	 	 	19,770	 	 	 	20,932	 	 	 	22,221	 	 	 	5,563	 	 	 	57.6	 	 	 	46.9	 	 	 	36.0	 	 	 	41.9	 	 	 	85.0	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                    Royalty
      advances, less current portion

                                  	 	 	1,455	 	 	 	2,152	 	 	 	1,258	 	 	 	183	 	 	 	—	 	 	 	3.4	 	 	 	3.7	 	 	 	2.4	 	 	 	2.8	 
	
                                    Music
      and Audio Content, net

                                  	 	 	4,826	 	 	 	5,605	 	 	 	4,168	 	 	 	135	 	 	 	—	 	 	 	11.4	 	 	 	9.7	 	 	 	7.9	 	 	 	2.1	 
	
                                    Property
      and Equipment, net

                                  	 	 	2,451	 	 	 	1,610	 	 	 	1,046	 	 	 	651	 	 	 	11.9	 	 	 	5.8	 	 	 	2.8	 	 	 	2.0	 	 	 	10.0	 
	
                                    Intangible
      assets, net

                                  	 	 	820	 	 	 	907	 	 	 	0	 	 	 	0	 	 	 	—	 	 	 	1.9	 	 	 	1.6	 	 	 	—	 	 	 	—	 
	
                                    Goodwill

                                  	 	 	12,350	 	 	 	26,464	 	 	 	24,328	 	 	 	0	 	 	 	30.5	 	 	 	29.3	 	 	 	45.6	 	 	 	45.8	 	 	 	—	 
	
                                    Other
      assets

                                  	 	 	524	 	 	 	410	 	 	 	74	 	 	 	10	 	 	 	—	 	 	 	1.2	 	 	 	0.7	 	 	 	0.1	 	 	 	0.2	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                    Total
      assets

                                  	 	 	42,196	 	 	 	58,080	 	 	 	53,095	 	 	 	6,542	 	 	 	100.0	 	 	 	100.0	 	 	 	100.0	 	 	 	100.0	 	 	 	100.0	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                    Liabilities,
      Redeemable Preferred Stock and Stockholders' Equity

                                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                    Current
      liabilities:

                                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                    Accounts
      payable

                                  	 	 	951	 	 	 	908	 	 	 	1,085	 	 	 	250	 	 	 	—	 	 	 	2.3	 	 	 	1.6	 	 	 	2.0	 	 	 	3.8	 
	
                                    Accrued
      royalties

                                  	 	 	18,908	 	 	 	17,757	 	 	 	12,308	 	 	 	5,688	 	 	 	—	 	 	 	44.8	 	 	 	30.6	 	 	 	23.2	 	 	 	86.9	 
	
                                    Accrued
      expenses

                                  	 	 	1,300	 	 	 	1,224	 	 	 	1,136	 	 	 	1,061	 	 	 	—	 	 	 	3.1	 	 	 	2.1	 	 	 	2.1	 	 	 	16.2	 
	
                                    Due
      to affiliated entities

                                  	 	 	0	 	 	 	0	 	 	 	0	 	 	 	46	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	0.7	 
	
                                    Deferred
      revenue

                                  	 	 	1,206	 	 	 	1,535	 	 	 	543	 	 	 	146	 	 	 	—	 	 	 	2.9	 	 	 	2.6	 	 	 	1.0	 	 	 	2.2	 
	
                                    Accrued
      interest payable to a related party

                                  	 	 	0	 	 	 	0	 	 	 	0	 	 	 	1,228	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	18.8	 
	
                                    Convertible
      debt payable to a related party

                                  	 	 	0	 	 	 	0	 	 	 	0	 	 	 	6,600	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	100.9	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                    Total
      current liabilities

                                  	 	 	22,365	 	 	 	21,424	 	 	 	15,072	 	 	 	15,019	 	 	 	43.0	 	 	 	53.0	 	 	 	36.9	 	 	 	28.4	 	 	 	229.6	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                    Long
      term debt

                                  	 	 	0	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	4.8	 	 	
                                    —

                                  	 	 	
                                    —

                                  	 	 	
                                    —

                                  	 	 	
                                    —

                                  	 
	
                                    Other
      long term liabilities

                                  	 	 	0	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	4.7	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 
	 
      	 	 	 	 	 	 	0	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                    Total
      liabilities

                                  	 	 	22,365	 	 	 	21,424	 	 	 	15,072	 	 	 	15,019	 	 	 	52.5	 	 	 	53.0	 	 	 	36.9	 	 	 	28.4	 	 	 	229.6	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                    Commitments
      and Contingencies

                                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                    Redeemable
      Preferred Stock

                                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                    Series
      A convertible preferred stock

                                  	 	 	7,015	 	 	 	7,015	 	 	 	7,017	 	 	 	0	 	 	 	—	 	 	 	16.6	 	 	 	12.1	 	 	 	13.2	 	 	 	—	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                    Stockholders'
      equity:

                                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                    Series
      A convertible preferred stock

                                  	 	 	0	 	 	 	0	 	 	 	0	 	 	 	8	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	0.1	 
	
                                    Series
      B convertible preferred stock

                                  	 	 	0	 	 	 	0	 	 	 	0	 	 	 	8	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	0.1	 
	
                                    Common
      stock

                                  	 	 	64	 	 	 	63	 	 	 	62	 	 	 	2	 	 	 	—	 	 	 	0.2	 	 	 	0.1	 	 	 	0.1	 	 	 	0.0	 
	
                                    Stock
      subscription receivable

                                  	 	 	0	 	 	 	0	 	 	 	0	 	 	 	(2	)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(0.0	)
	
                                    Additional
      paid in capital

                                  	 	 	56,691	 	 	 	55,926	 	 	 	55,051	 	 	 	7,999	 	 	 	—	 	 	 	134.4	 	 	 	96.3	 	 	 	103.7	 	 	 	122.3	 
	
                                    Accumulated
      deficit

                                  	 	 	(43,874	)	 	 	(26,348	)	 	 	(24,093	)	 	 	(16,491	)	 	 	—	 	 	 	(104.0	)	 	 	(45.4	)	 	 	(45.4	)	 	 	(252.1	)
	
                                    Accumulated
      other comprehensive loss

                                  	 	 	(65	)	 	 	0	 	 	 	(14	)	 	 	(1	)	 	 	—	 	 	 	(0.2	)	 	 	—	 	 	 	(0.0	)	 	 	(0.0	)
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                    Total
      stockholders' equity (deficit)

                                  	 	 	12,816	 	 	 	29,641	 	 	 	31,006	 	 	 	(8,477	)	 	 	47.5	 	 	 	30.4	 	 	 	51.0	 	 	 	58.4	 	 	 	(129.6	)
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                    Total
      liabilities, redeemable preferred stock and stockholders'
      equity

                                  	 	 	42,196	 	 	 	58,080	 	 	 	53,095	 	 	 	6,542	 	 	 	100.0	 	 	 	100.0	 	 	 	100.0	 	 	 	100.0	 	 	 	100.0	 


                          

                        

                      

                    

                  

                

              

            

          

        

         

      

    

    Note:
Some amounts may not foot due to rounding

    


    Source:
SEC Filings


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    Exhibit
2

    The
Orchard Enterprises, Inc.

    Summary
of Historical and Common Size Income Statements

    (000's)

     

    
      
        
          
            
              
                
                  	 
      	 	
                          Nine Months

                          Ended

                          September 30,

                        	 	 	
                          Year Ended December 31,

                        	 	 	
                          Public

                        	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	 	
                          2009

                          $

                        	 	 	
                          2008

                          
                            $

                          

                        	 	 	
                          2007

                          
                            $

                          

                        	 	 	
                          2006

                          
                            $

                          

                        	 	 	
                          Comps

                          %

                        	 	 	
                          2009

                          
                            %

                          

                        	 	 	
                          2008

                          
                            %

                          

                        	 	 	
                          2007

                          
                            %

                          

                        	 	 	
                          2006

                          
                            %

                          

                        	 
	
                          Net
      revenues

                        	 	 	45,555	 	 	 	57,356	 	 	 	28,549	 	 	 	14,918	 	 	 	100.0	 	 	 	100.0	 	 	 	100.0	 	 	 	100.0	 	 	 	100.0	 
	
                          Cost
      of Revenues

                        	 	 	33,399	 	 	 	40,272	 	 	 	20,894	 	 	 	10,717	 	 	 	52.0	 	 	 	73.3	 	 	 	70.2	 	 	 	73.2	 	 	 	71.8	 
	
                          Gross
      Profit

                        	 	 	12,156	 	 	 	17,084	 	 	 	7,655	 	 	 	4,201	 	 	 	48.0	 	 	 	26.7	 	 	 	29.8	 	 	 	26.8	 	 	 	28.2	 
	
                          Operating
      expenses

                        	 	 	30,104	 	 	 	19,700	 	 	 	14,356	 	 	 	9,783	 	 	 	63 6	 	 	 	66 1	 	 	 	34.3	 	 	 	50.3	 	 	 	65.6	 
	
                          Income
      (loss) from operations

                        	 	 	(17,948	)	 	 	(2,616	)	 	 	(6,701	)	 	 	(5,582	)	 	 	(15.6	)	 	 	(39.4	)	 	 	(4.6	)	 	 	(23.5	)	 	 	(37.4	)
	
                          Other
      income (expense):

                        	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                          Beneficial
      conversion feature

                        	 	 	0	 	 	 	0	 	 	 	(477	)	 	 	0	 	 	 	0.0	 	 	 	0.0	 	 	 	0.0	 	 	 	(1.7	)	 	 	0.0	 
	
                          Interest
      income

                        	 	 	6	 	 	 	171	 	 	 	38	 	 	 	3	 	 	 	0.3	 	 	 	0.0	 	 	 	0.3	 	 	 	0.1	 	 	 	0.0	 
	
                          Interest
      expense

                        	 	 	(48	)	 	 	0	 	 	 	(423	)	 	 	(520	)	 	 	(1.0	)	 	 	(0.1	)	 	 	0.0	 	 	 	(1.5	)	 	 	(3.5	)
	
                          Loss
      from disposal of property and equipment

                        	 	 	0	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	0.0	 	 	 	0.0	 	 	 	0.0	 	 	 	0.0	 	 	 	0.0	 
	
                          Other
      income (expense)

                        	 	 	463	 	 	 	190	 	 	 	(39	)	 	 	130	 	 	 	0.0	 	 	 	1.0	 	 	 	0.3	 	 	 	(0.1	)	 	 	0.9	 
	
                          Total
      Other Income

                        	 	 	421	 	 	 	361	 	 	 	(901	)	 	 	(387	)	 	 	(0.7	)	 	 	0.9	 	 	 	0.6	 	 	 	(3.2	)	 	 	(2.6	)
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                          Net
      income (loss)

                        	 	 	(17,527	)	 	 	(2,255	)	 	 	(7,602	)	 	 	(5,969	)	 	 	(16.3	)	 	 	(38.5	)	 	 	(3.9	)	 	 	(26.6	)	 	 	(40.0	)
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                          Depreciation
      expense

                        	 	 	1,387	 	 	 	1,451	 	 	 	347	 	 	 	151	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                          Stock
      based compensation expense

                        	 	 	773	 	 	 	956	 	 	 	2,283	 	 	 	84	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                          Gross
      cash flow (net income + depreciation and amortization)

                        	 	 	(16,140	)	 	 	(804	)	 	 	(7,255	)	 	 	(5,818	)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                          Earnings
      before interest, taxes, depreciation and amortization
    (EBITDA)

                        	 	 	(16,098	)	 	 	(975	)	 	 	(6,870	)	 	 	(5,301	)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                          EBITDA
      + Stock based compensation

                        	 	 	(15,325	)	 	 	(19	)	 	 	(4,587	)	 	 	(5,217	)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                          Earnings
      (loss) before interest and taxes (EBIT)

                        	 	 	(17,485	)	 	 	(2,426	)	 	 	(7,217	)	 	 	(5,452	)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                          Earnings
      (loss) before taxes (EBT)

                        	 	 	(17,527	)	 	 	(2,255	)	 	 	(7,602	)	 	 	(5,969	)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 


                

              

            

          

        

         

      

    

    Note:
Some amounts may not foot due to rounding

    


    Source:
SEC Filings


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    Exhibit
3

    The
Orchard Enterprises, Inc.

    Normalized
Income Statement

    Twelve
Months Ended September 30, 2009

    (000's)

    


    
      
        
          
            
              
                	 
      	 	
                        Year Ended

                        December 31, 

                        2008

                        $

                      	 	 	
                        Nine

                        Months Ended

                        September 30,

                        2008

                        $

                      	 	 	
                        Three

                        Months Ended

                        December 31,

                        2008

                        $

                      	 	 	
                        Nine

                        Months Ended

                        September 30,

                        2009

                        $

                      	 	 	
                        Twelve

                        Months Ended

                        September 30,

                        2009

                        $

                      	 	 	
                        Valuation

                        Adjustments

                        $

                      	 	 	
                        Normalized

                        Twelve

                        Months Ended

                        September 30,

                        2009

                        $

                      	 	 	
                        Public

                        Comps

                        %

                      	 	 	
                        Normalized

                        2009

                        %

                      	 
	
                        Net
      revenues

                      	 	 	57,356	 	 	 	41,182	 	 	 	16,174	 	 	 	45,555	 	 	 	61,729	 	 	 	 	 	 	61,729	 	 	 	100,0	 	 	 	100.0	 
	
                        Cost
      of Revenues

                      	 	 	40,272	 	 	 	29,438	 	 	 	10,834	 	 	 	33,399	 	 	 	44,233	 	 	 	 	 	 	44,233	 	 	 	52,0	 	 	 	71.7	 
	
                        Gross
      Profit

                      	 	 	17,084	 	 	 	11,744	 	 	 	5,340	 	 	 	12,156	 	 	 	17,496	 	 	 	 	 	 	17,496	 	 	 	48.0	 	 	 	28.3	 
	
                        Operating
      expenses:

                      	 	 	19,700	 	 	 	14,047	 	 	 	5,653	 	 	 	30,104	 	 	 	35,757	 	 	 	(14,380	)	 	 	21,377	 	 	 	63.6	 	 	 	34.6	 
	
                        Income
      (loss) from operations

                      	 	 	(2,616	)	 	 	(2,303	)	 	 	(313	)	 	 	(17,948	)	 	 	(18,261	)	 	 	14,380	 	 	 	(3,881	)	 	 	(15.6	)	 	 	(6.3	)
	
                        Other
      income (expense):

                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                        Beneficial
      conversion feature

                      	 	 	0	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	0	 	 	 	0,0	 	 	 	0.0	 
	
                        Interest
      income

                      	 	 	171	 	 	 	163	 	 	 	8	 	 	 	6	 	 	 	14	 	 	 	 	 	 	 	14	 	 	 	0.3	 	 	 	0.0	 
	
                        Interest
      expense

                      	 	 	0	 	 	 	0	 	 	 	0	 	 	 	(48	)	 	 	(48	)	 	 	 	 	 	 	(48	)	 	 	(1.0	)	 	 	(0.1	)
	
                        Loss
      from disposal of property and equipment

                      	 	 	0	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	 	 	 	 	0	 	 	 	0.0	 	 	 	0.0	 
	
                        Other
      income (expense)

                      	 	 	190	 	 	 	191	 	 	 	(1	)	 	 	463	 	 	 	462	 	 	 	(462	)	 	 	0	 	 	 	0.0	 	 	 	0.0	 
	
                        Total
      Other Income

                      	 	 	361	 	 	 	354	 	 	 	7	 	 	 	421	 	 	 	428	 	 	 	(462	)	 	 	(34	)	 	 	(0.7	)	 	 	(0.1	)
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                        Net
      income (loss)

                      	 	 	(2,255	)	 	 	(1,949	)	 	 	(306	)	 	 	(17,527	)	 	 	(17,833	)	 	 	13,918	 	 	 	(3,915	)	 	 	(16.3	)	 	 	(6.3	)
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                        Impairment
      of goodwill

                      	 	 	0	 	 	 	0	 	 	 	0	 	 	 	14,114	 	 	 	14,114	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                        Restructuring
      expenses

                      	 	 	0	 	 	 	0	 	 	 	0	 	 	 	312	 	 	 	312	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                        Writedown
      of property

                      	 	 	0	 	 	 	22	 	 	 	(22	)	 	 	(24	)	 	 	(46	)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	14,380	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                        Depreciation
      expense

                      	 	 	1,451	 	 	 	1,016	 	 	 	435	 	 	 	1,387	 	 	 	1,822	 	 	 	 	 	 	 	1,822	 	 	 	 	 	 	 	 	 
	
                        Stock
      based compensation expense

                      	 	 	956	 	 	 	662	 	 	 	294	 	 	 	773	 	 	 	1,067	 	 	 	 	 	 	 	1,067	 	 	 	 	 	 	 	 	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                        Gross
      cash flow (net income + depreciation and amortization)

                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(2,093	)	 	 	 	 	 	 	 	 
	
                        Earnings
      before interest, taxes, depreciation and amortization
    (EBITDA)

                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(2,059	)	 	 	 	 	 	 	 	 
	
                        EBITDA
      + Stock based compensation

                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(992	)	 	 	 	 	 	 	 	 
	
                        Earnings
      (loss) before interest and taxes (EBIT)

                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(3,881	)	 	 	 	 	 	 	 	 
	
                        Earnings
      (loss) before taxes (EBT)

                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(3,915	)	 	 	 	 	 	 	 	 


              

            

          

        

      

    

    


    Note:
Some amounts may not foot due to rounding

    


    Source:
SEC Filings

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
4

    The
Orchard Enterprises, Inc.

    Management
Prepared Forecast

    


    
      
        
          
            
              
                
                  
                    
                      
                        
                          	 
      	 	
                                  For
      Years Ending December 31,

                                	 
	
                                  AGGRESSIVE
      CASE:

                                	 	
                                  2010

                                	 	 	
                                  %

                                	 	 	
                                  2011

                                	 	 	
                                  %

                                	 	 	
                                  2012

                                	 	 	
                                  %

                                	 	 	
                                  2013

                                	 	 	
                                  %

                                	 	 	
                                  2014

                                	 	 	
                                  %

                                	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Revenue

                                	 	$	76,566,622	 	 	 	100.0	%	 	$	88,319,598	 	 	 	100.0	%	 	$	100,684,343	 	 	 	100.0	%	 	$	110,752,777	 	 	 	100.0	%	 	$	119,612,999	 	 	 	100.0	%
	
                                  Cost
      of Sales

                                	 	 	57,347,121	 	 	 	74.9	%	 	 	67,476,173	 	 	 	76.4	%	 	 	76,922,838	 	 	 	76.4	%	 	 	85,058,133	 	 	 	76.8	%	 	 	91,862,784	 	 	 	76.8	%
	
                                  Gross
      Margin

                                	 	 	19,219,501	 	 	 	25.1	%	 	 	20,843,425	 	 	 	23.6	%	 	 	23,761,505	 	 	 	23.6	%	 	 	25,694,644	 	 	 	23.2	%	 	 	27,750,216	 	 	 	23.2	%
	
                                  Operating
      Expenses

                                	 	 	17,188,840	 	 	 	22.4	%	 	 	18,457,782	 	 	 	20.9	%	 	 	19,446,416	 	 	 	19.3	%	 	 	20,224,273	 	 	 	18.3	%	 	 	21,033,244	 	 	 	17.6	%
	
                                  Stock
      Based Comp

                                	 	 	(1,100,000	)	 	 	 
       	 	 	 	(1,100,000	)	 	 	 	 	 	 	(1,100,000	)	 	 	 	 	 	 	(1,100,000	)	 	 	 	 	 	 	(1,100,000	)	 	 	 	 
	
                                  Adj
      Operating Expenses

                                	 	 	16,088,840	 	 	 	 	 	 	 	17,357,782	 	 	 	 	 	 	 	18,346,416	 	 	 	 	 	 	 	19,124,273	 	 	 	 	 	 	 	19,933,244	 	 	 	 	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Pretax
      Income

                                	 	 	3,130,661	 	 	 	2.7	%	 	 	3,485,643	 	 	 	2.7	%	 	 	5,415,089	 	 	 	4.3	%	 	 	6,570,372	 	 	 	4.9	%	 	 	7,816,972	 	 	 	5.6	%
	
                                  Income
      Taxes @40%

                                	 	 	-	 	 	 	0.0	%	 	 	-	 	 	 	0.0	%	 	 	-	 	 	 	0.0	%	 	 	-	 	 	 	0.0	%	 	 	2,967,495	 	 	 	2.5	%
	
                                  Net
      Income

                                	 	 	3,130,661	 	 	 	2.7	%	 	 	3,485,643	 	 	 	2.7	%	 	 	5,415,089	 	 	 	4.3	%	 	 	6,570,372	 	 	 	4.9	%	 	 	4,849,477	 	 	 	3.1	%
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Less(Add):

                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Capital
      Expenditures

                                	 	 	843,000	 	 	 	 	 	 	 	579,000	 	 	 	 	 	 	 	540,000	 	 	 	 	 	 	 	500,000	 	 	 	 	 	 	 	500,000	 	 	 	 	 
	
                                  Depreciation

                                	 	 	(769,000	)	 	 	 	 	 	 	(758,000	)	 	 	 	 	 	 	(682,000	)	 	 	 	 	 	 	(668,360	)	 	 	 	 	 	 	(654,993	)	 	 	 	 
	
                                  Amortization

                                	 	 	(930,425	)	 	 	 	 	 	 	(930,425	)	 	 	 	 	 	 	(930,425	)	 	 	 	 	 	 	(930,425	)	 	 	 	 	 	 	(875,942	)	 	 	 	 
	
                                  Changes
      to Working Capital

                                	 	 	150,666	 	 	 	 	 	 	 	117,530	 	 	 	 	 	 	 	123,647	 	 	 	 	 	 	 	100,684	 	 	 	 	 	 	 	88,602	 	 	 	 	 
	 
      	 	 	 
       	 	 	 	 
       	 	 	 	 
       	 	 	 	 
       	 	 	 	 
       	 	 	 	 
       	 	 	 	 
       	 	 	 	 
       	 	 	 	 
       	 	 	 	 
       	 
	
                                  Net
      Cash Flow

                                	 	$	3,836,420	 	 	 	 	 	 	$	4,477,539	 	 	 	 	 	 	$	6,363,867	 	 	 	 	 	 	$	7,568,473	 	 	 	 	 	 	$	5,791,810	 	 	 	 	 


                        

                      

                    

                  

                

              

            

          

        

      

    

    


    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  	 
      	 	
                                                                          For
      Years Ending December 31,

                                                                        	 
	
                                                                          BASE
      CASE:

                                                                        	 	
                                                                          2010

                                                                        	 	 	
                                                                          %

                                                                        	 	 	
                                                                          2011

                                                                        	 	 	
                                                                          %

                                                                        	 	 	
                                                                          2012

                                                                        	 	 	
                                                                          %

                                                                        	 	 	
                                                                          2013

                                                                        	 	 	
                                                                          %

                                                                        	 	 	
                                                                          2014

                                                                        	 	 	
                                                                          %

                                                                        	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                          Revenue

                                                                        	 	$	71,566,622	 	 	 	100.0	%	 	$	82,558,045	 	 	 	100.0	%	 	$	94,651,209	 	 	 	100.0	%	 	$	104,116,330	 	 	 	100.0	%	 	$	112,445,636	 	 	 	100.0	%
	
                                                                          Cost
      of Sales

                                                                        	 	 	53,602,205	 	 	 	74.9	%	 	 	63,074,346	 	 	 	76.4	%	 	 	72,313,524	 	 	 	76.4	%	 	 	79,961,341	 	 	 	76.8	%	 	 	86,358,249	 	 	 	76.8	%
	
                                                                          Gross
      Margin

                                                                        	 	 	17,964,417	 	 	 	25.1	%	 	 	19,483,699	 	 	 	23.6	%	 	 	22,337,685	 	 	 	23.6	%	 	 	24,154,989	 	 	 	23.2	%	 	 	26,087,388	 	 	 	23.2	%
	
                                                                          Operating
      Expenses

                                                                        	 	 	17,188,840	 	 	 	24.0	%	 	 	18,457,782	 	 	 	22.4	%	 	 	19,446,416	 	 	 	20.5	%	 	 	20,224,273	 	 	 	19.4	%	 	 	21,033,244	 	 	 	18.7	%
	
                                                                          Stock
      Based Comp

                                                                        	 	 	(1,100,000	)	 	 	 	 	 	 	(1,100,000	)	 	 	 	 	 	 	(1,100,000	)	 	 	 	 	 	 	(1,100,000	)	 	 	 	 	 	 	(1,100,000	)	 	 	 	 
	
                                                                          Adj
      Operating Expenses

                                                                        	 	 	16,088,840	 	 	 	 	 	 	 	17,357,782	 	 	 	 	 	 	 	18,346,416	 	 	 	 	 	 	 	19,124,273	 	 	 	 	 	 	 	19,933,244	 	 	 	 	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                          Pretax
      Income

                                                                        	 	 	1,875,577	 	 	 	1.1	%	 	 	2,125,917	 	 	 	1.2	%	 	 	3,991,269	 	 	 	3.1	%	 	 	5,030,716	 	 	 	3.8	%	 	 	6,154,144	 	 	 	4.5	%
	
                                                                          Income
      Taxes @40%

                                                                        	 	 	-	 	 	 	0.0	%	 	 	-	 	 	 	0.0	%	 	 	-	 	 	 	0.0	%	 	 	-	 	 	 	0.0	%	 	 	-	 	 	 	0.0	%
	
                                                                          Net
      Income

                                                                        	 	 	1,875,577	 	 	 	1.1	%	 	 	2,125,917	 	 	 	1.2	%	 	 	3,991,269	 	 	 	3.1	%	 	 	5,030,716	 	 	 	3.8	%	 	 	6,154,144	 	 	 	4.5	%
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                          Less(Add):

                                                                        	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                          Capital
      Expenditures

                                                                        	 	 	843,000	 	 	 	 	 	 	 	579,000	 	 	 	 	 	 	 	540,000	 	 	 	 	 	 	 	500,000	 	 	 	 	 	 	 	500,000	 	 	 	 	 
	
                                                                          Depreciation

                                                                        	 	 	(769,000	)	 	 	 	 	 	 	(758,000	)	 	 	 	 	 	 	(682,000	)	 	 	 	 	 	 	(668,360	)	 	 	 	 	 	 	(654,993	)	 	 	 	 
	
                                                                          Amortization

                                                                        	 	 	(930,425	)	 	 	 	 	 	 	(930,425	)	 	 	 	 	 	 	(930,425	)	 	 	 	 	 	 	(930,425	)	 	 	 	 	 	 	(875,942	)	 	 	 	 
	
                                                                          Changes
      to Working Capital

                                                                        	 	 	100,666	 	 	 	 	 	 	 	109,914	 	 	 	 	 	 	 	120,932	 	 	 	 	 	 	 	94,651	 	 	 	 	 	 	 	83,293	 	 	 	 	 
	 
      	 	 	 
       	 	 	 	 
       	 	 	 	 
       	 	 	 	 
       	 	 	 	 
       	 	 	 	 
       	 	 	 	 
       	 	 	 	 
       	 	 	 	 
       	 	 	 	 
       	 
	
                                                                          Net
      Cash Flow

                                                                        	 	$	2,631,336	 	 	 	 	 	 	$	3,125,428	 	 	 	 	 	 	$	4,942,763	 	 	 	 	 	 	$	6,034,850	 	 	 	 	 	 	$	7,101,786	 	 	 	 	 


                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    


    
      
        
          
            
              
                
                  
                    
                      	 
      	 	
                              For
      Years Ending December 31,

                            	 
	
                              WORST
      CASE:

                            	 	
                              2010

                            	 	 	
                              %

                            	 	 	
                              2011

                            	 	 	
                              %

                            	 	 	
                              2012

                            	 	 	
                              %

                            	 	 	
                              2013

                            	 	 	
                              %

                            	 	 	
                              2014

                            	 	 	
                              %

                            	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                              Revenue

                            	 	$	65,466,622	 	 	 	100.0	%	 	$	75,548,481	 	 	 	100.0	%	 	$	86,578,560	 	 	 	100.0	%	 	$	95,236,416	 	 	 	100.0	%	 	$	102,855,329	 	 	 	100.0	%
	
                              Cost
      of Sales

                            	 	 	49,058,486	 	 	 	74.9	%	 	 	57,945,683	 	 	 	76.7	%	 	 	66,492,334	 	 	 	76.8	%	 	 	73,141,567	 	 	 	76.8	%	 	 	78,992,893	 	 	 	76.8	%
	
                              Gross
      Margin

                            	 	 	16,408,136	 	 	 	25.1	%	 	 	17,602,798	 	 	 	23.3	%	 	 	20,086,226	 	 	 	23.2	%	 	 	22,094,849	 	 	 	23.2	%	 	 	23,862,436	 	 	 	23.2	%
	
                              Operating
      Expenses

                            	 	 	16,641,754	 	 	 	25.4	%	 	 	17,883,341	 	 	 	23.7	%	 	 	18,777,508	 	 	 	21.7	%	 	 	19,528,608	 	 	 	20.5	%	 	 	20,309,753	 	 	 	19.7	%
	
                              Stock
      Based Comp

                            	 	 	(1,100,000	)	 	 	 	 	 	 	(1,100,000	)	 	 	 	 	 	 	(1,100,000	)	 	 	 	 	 	 	(1,100,000	)	 	 	 	 	 	 	(1,100,000	)	 	 	 	 
	
                              Adj
      Operating Expenses

                            	 	 	15,541,754	 	 	 	 	 	 	 	16,783,341	 	 	 	 	 	 	 	17,677,508	 	 	 	 	 	 	 	18,428,608	 	 	 	 	 	 	 	19,209,753	 	 	 	 	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                              Pretax
      Income

                            	 	 	866,382	 	 	 	-0.4	%	 	 	819,457	 	 	 	-0.4	%	 	 	2,408,718	 	 	 	1.5	%	 	 	3,666,240	 	 	 	2.7	%	 	 	4,652,684	 	 	 	3.5	%
	
                              Income
      Taxes @40%

                            	 	 	-	 	 	 	0.0	%	 	 	-	 	 	 	0.0	%	 	 	-	 	 	 	0.0	%	 	 	-	 	 	 	0.0	%	 	 	-	 	 	 	0.0	%
	
                              Net
      Income

                            	 	 	866,382	 	 	 	-0.4	%	 	 	819,457	 	 	 	-0.4	%	 	 	2,408,718	 	 	 	1.5	%	 	 	3,666,240	 	 	 	2.7	%	 	 	4,652,684	 	 	 	3.5	%
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                              Less(Add):

                            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                              Capital
      Expenditures

                            	 	 	843,000	 	 	 	 	 	 	 	579,000	 	 	 	 	 	 	 	540,000	 	 	 	 	 	 	 	500,000	 	 	 	 	 	 	 	500,000	 	 	 	 	 
	
                              Depreciation

                            	 	 	(769,000	)	 	 	 	 	 	 	(758,000	)	 	 	 	 	 	 	(682,000	)	 	 	 	 	 	 	(668,360	)	 	 	 	 	 	 	(654,993	)	 	 	 	 
	
                              Amortization

                            	 	 	(930,425	)	 	 	 	 	 	 	(930,425	)	 	 	 	 	 	 	(930,425	)	 	 	 	 	 	 	(930,425	)	 	 	 	 	 	 	(875,942	)	 	 	 	 
	
                              Changes
      to Working Capital

                            	 	 	39,666	 	 	 	 	 	 	 	100,819	 	 	 	 	 	 	 	110,301	 	 	 	 	 	 	 	86,579	 	 	 	 	 	 	 	76,189	 	 	 	 	 
	 
      	 	 	 
       	 	 	 	 
       	 	 	 	 
       	 	 	 	 
       	 	 	 	  	 	 	 	 
       	 	 	 	 
       	 	 	 	 
       	 	 	 	 
       	 	 	 	 
       	 
	
                              Net
      Cash Flow

                            	 	$	1,683,141	 	 	 	 	 	 	$	1,828,064	 	 	 	 	 	 	$	3,370,843	 	 	 	 	 	 	$	4,678,447	 	 	 	 	 	 	$	5,607,429	 	 	 	 	 


                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
5

    The
Orchard Enterprises, Inc.

    Guideline
Public Company Method

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              	 
      	 	 	 	 	 	 	 	 	 	 	
                                                                      Limelight

                                                                    	 	 	
                                                                      Salary
      Com, Inc

                                                                    	 	 	 	 	 	
                                                                      Image

                                                                    	 	 	 	 	 	
                                                                      Intermap

                                                                    	 	 	
                                                                      LiveWire

                                                                    	 
	 
      	 	
                                                                      Orchard

                                                                    	 	 	
                                                                      Glu
      Mobile, Inc

                                                                    	 	 	
                                                                      EDGAR
      Online, Inc.

                                                                    	 	 	
                                                                      Networks,
      Inc.

                                                                    	 	 	
                                                                      and
      Subsidiaries

                                                                    	 	 	
                                                                      WebMediaBrands
      Inc.

                                                                    	 	 	
                                                                      Entertainment,
      Inc

                                                                    	 	 	
                                                                      RealNetworks,
      Inc

                                                                    	 	 	
                                                                      Network
      Services

                                                                    	 	 	
                                                                      Mobile,
      Inc.

                                                                    	 
	
                                                                      Exchange/Symbol

                                                                    	 	
                                                                      NASDAQ:
      ORCD

                                                                    	 	 	
                                                                      NASDAQ.GLUU

                                                                    	 	 	
                                                                      NASDAQ
      EDGR

                                                                    	 	 	
                                                                      NASDAQ:
      LLNW

                                                                    	 	 	
                                                                      NASDAQ:
      SLRY

                                                                    	 	 	
                                                                      NASDAQ.
      WEBM

                                                                    	 	 	
                                                                      NASDAQ:
      DISK PK

                                                                    	 	 	
                                                                      NASDAQ:
      RNWK

                                                                    	 	 	
                                                                      NASDAQ
      INAP

                                                                    	 	 	
                                                                      NASDAQ:
      LVWR.PK

                                                                    	 
	
                                                                      Last
      Twelve Months (LTM) Ending

                                                                    	 	
                                                                      September 30, 2009

                                                                    	 	 	
                                                                      September 30,2009

                                                                    	 	 	
                                                                      September
      30, 2009

                                                                    	 	 	
                                                                      September 30, 2009

                                                                    	 	 	
                                                                      December
      31,2009

                                                                    	 	 	
                                                                      September
      30, 2009

                                                                    	 	 	
                                                                      December
      31,2009

                                                                    	 	 	
                                                                      December
      31, 2009

                                                                    	 	 	
                                                                      December
      31,2009

                                                                    	 	 	
                                                                      December
      31,2009

                                                                    	 
	
                                                                      Stock
      Price as of March 10, 2010

                                                                    	 	$	1.75	 	 	$	1.03	 	 	$	1.28	 	 	$	4.03	 	 	$	2.71	 	 	$	1.04	 	 	$	0.25	 	 	$	5.32	 	 	$	6.01	 	 	$	3.95	 
	
                                                                      Shares
      Out. (000)

                                                                    	 	 	6,378	 	 	 	30,302	 	 	 	26,855	 	 	 	84,674	 	 	 	16,817	 	 	 	36,922	 	 	 	25,356	 	 	 	135,140	 	 	 	50,951	 	 	 	4,601	 
	
                                                                      Minority
      Value Indication

                                                                    	 	 	11,162	 	 	 	31,211	 	 	 	34,374	 	 	 	341,236	 	 	 	45,574	 	 	 	38,399	 	 	 	6,339	 	 	 	718,945	 	 	 	306,216	 	 	 	18,174	 
	
                                                                      Preferred
      Stock

                                                                    	 	 	7,015	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                                                                      M V
      of Total Equity

                                                                    	 	 	18,177	 	 	 	31,211	 	 	 	34374	 	 	 	341,236	 	 	 	45,574	 	 	 	38,399	 	 	 	6,339	 	 	 	718,945	 	 	 	306,216	 	 	 	18,174	 
	
                                                                      Add:
      Short and Long Term Interest Bearing Debt

                                                                    	 	 	-	 	 	 	15,626	 	 	 	2,028	 	 	 	-	 	 	 	2,525	 	 	 	7,197	 	 	 	27,118	 	 	 	-	 	 	 	23,242	 	 	 	360	 
	
                                                                      Less
      Cash and Marketable Securities

                                                                    	 	 	4,695	 	 	 	9,861	 	 	 	1,747	 	 	 	152,814	 	 	 	11,225	 	 	 	4,134	 	 	 	322	 	 	 	384,900	 	 	 	80,926	 	 	 	7,834	 
	
                                                                      Market
      Value of Inverted Capital (Minority Value)

                                                                    	 	 	13,482	 	 	 	36,976	 	 	 	34,655	 	 	 	188,422	 	 	 	36,874	 	 	 	41,462	 	 	 	33,135	 	 	 	334,045	 	 	 	248,532	 	 	 	10,700	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                      Comparative
      Balance Sheets:

                                                                    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                      Current
      Assets

                                                                    	 	 	19,770	 	 	 	38,415	 	 	 	4,367	 	 	 	189,896	 	 	 	31,309	 	 	 	9,582	 	 	 	51,707	 	 	 	481,653	 	 	 	108,754	 	 	 	11,014	 
	
                                                                      Net
      Plant and Equipment

                                                                    	 	 	2,451	 	 	 	3,620	 	 	 	2,444	 	 	 	39,653	 	 	 	2,213	 	 	 	2,114	 	 	 	1,374	 	 	 	57,114	 	 	 	91,151	 	 	 	1,342	 
	
                                                                      Other
      Assets

                                                                    	 	 	19,975	 	 	 	23,538	 	 	 	4,915	 	 	 	10,087	 	 	 	33,492	 	 	 	34,077	 	 	 	23,045	 	 	 	68,116	 	 	 	67,597	 	 	 	175	 
	
                                                                      Total
      Assets

                                                                    	 	 	42,196	 	 	 	65,573	 	 	 	11,726	 	 	 	239,636	 	 	 	67,014	 	 	 	45,773	 	 	 	76,126	 	 	 	606,883	 	 	 	267,502	 	 	 	12,531	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                      Current
      Liabilities Including Short Term Debt

                                                                    	 	 	22,365	 	 	 	34,724	 	 	 	6,336	 	 	 	28,162	 	 	 	51,109	 	 	 	6,269	 	 	 	77,219	 	 	 	203,455	 	 	 	34,215	 	 	 	3,790	 
	
                                                                      Long
      Term Debt

                                                                    	 	 	-	 	 	 	3,062	 	 	 	1,528	 	 	 	-	 	 	 	-	 	 	 	7,197	 	 	 	-	 	 	 	-	 	 	 	23,217	 	 	 	170	 
	
                                                                      Other
      Long Term Liabilities

                                                                    	 	 	-	 	 	 	10,107	 	 	 	206	 	 	 	3,006	 	 	 	4,382	 	 	 	1,788	 	 	 	-	 	 	 	20,364	 	 	 	25,668	 	 	 	114	 
	
                                                                      Preferred
      Stock

                                                                    	 	 	7,015	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                      Stockholder's
      Equity

                                                                    	 	 	12,816	 	 	 	17,680	 	 	 	3,656	 	 	 	208,468	 	 	 	11,523	 	 	 	30,519	 	 	 	(1,093	)	 	 	383,064	 	 	 	184,402	 	 	 	8,457	 
	
                                                                      Total
      Liabilities and Equity

                                                                    	 	 	42,196	 	 	 	65,573	 	 	 	11,726	 	 	 	239,636	 	 	 	67,014	 	 	 	45,773	 	 	 	76,126	 	 	 	606,883	 	 	 	267,502	 	 	 	12,531	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                      Comparative
      Income Statements

                                                                    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                      Revenues

                                                                    	 	 	61,729	 	 	 	81,869	 	 	 	18,894	 	 	 	133,936	 	 	 	46,167	 	 	 	119,648	 	 	 	105,215	 	 	 	562,264	 	 	 	256,259	 	 	 	16,808	 
	
                                                                      Cost
      of Revenues

                                                                    	 	 	44,233	 	 	 	36,862	 	 	 	4,395	 	 	 	85,337	 	 	 	14,949	 	 	 	83,113	 	 	 	86,619	 	 	 	222,142	 	 	 	198,023	 	 	 	5,932	 
	
                                                                      Gross
      Margin

                                                                    	 	 	17,496	 	 	 	45,007	 	 	 	14,499	 	 	 	48,599	 	 	 	31,218	 	 	 	36,535	 	 	 	18,596	 	 	 	340,122	 	 	 	58,236	 	 	 	10,876	 
	
                                                                      Operating
      Expenses

                                                                    	 	 	21,377	 	 	 	63,423	 	 	 	15,735	 	 	 	83,059	 	 	 	50,340	 	 	 	43,856	 	 	 	28,390	 	 	 	397,760	 	 	 	72,434	 	 	 	13,087	 
	
                                                                      Income
      (Loss) from Operations

                                                                    	 	 	(3,881	)	 	 	(18,416	)	 	 	(1,236	)	 	 	(34,460	)	 	 	(19,122	)	 	 	(7,321	) 	 	 	(9,794	)	 	 	(57,638	)	 	 	(14,198	) 	 	 	(2,211	)
	
                                                                      Other
      Income (Expense)

                                                                    	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	 	 	 	 	 	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                                                                      Interest
      Income

                                                                    	 	 	14	 	 	 	161	 	 	 	37	 	 	 	1,720	 	 	 	30	 	 	 	480	 	 	 	-	 	 	 	3,969	 	 	 	150	 	 	 	-	 
	
                                                                      Interest
      Expense

                                                                    	 	 	(48	) 	 	 	(1,036	)	 	 	(438	)	 	 	(45	)	 	 	 	 	 	 	(3,628	) 	 	 	(2,535	)	 	 	-	 	 	 	(720	)	 	 	-	 
	
                                                                      Earnings
      Before Tax (EBT)

                                                                    	 	 	(3,915	)	 	 	(19,291	) 	 	 	(1,637	)	 	 	(32,785	)	 	 	(19,092	)	 	 	(10,469	)	 	 	(12.329	) 	 	 	(53,669	)	 	 	(14,768	) 	 	 	(2,211	)
	
                                                                      Tax
      Expense (Benefit)

                                                                    	 	 	-	 	 	 	3,436	 	 	 	-	 	 	 	646	 	 	 	91	 	 	 	1,164	 	 	 	15	 	 	 	3,321	 	 	 	342	 	 	 	297	 
	
                                                                      Net
      Income (Loss) From Continuing Operations

                                                                    	 	 	(3,915	)	 	 	(22,727	)	 	 	(1,637	)	 	 	(33,431	)	 	 	(19,183	)	 	 	(11,633	)	 	 	(12,344	)	 	 	(56,990	)	 	 	(15,110	) 	 	 	(2,508	)
	
                                                                      Depreciation
      and Amortization

                                                                    	 	 	1,822	 	 	 	11,532	 	 	 	2,074	 	 	 	27,716	 	 	 	6,437	 	 	 	19,496	 	 	 	6,306	 	 	 	31,454	 	 	 	36,631	 	 	 	571	 
	
                                                                      Stock
      Based Compensation

                                                                    	 	 	1,067	 	 	 	(259	)	 	 	1,356	 	 	 	18,646	 	 	 	8,272	 	 	 	3,121	 	 	 	137	 	 	 	21,460	 	 	 	5,613	 	 	 	293	 
	
                                                                      Gross
      Cash Flow (Net Income + Depreciation and Amortization)

                                                                    	 	 	(2,093	)	 	 	(11,195	)	 	 	437	 	 	 	(5,715	)	 	 	(12,746	)	 	 	7,863	 	 	 	(6,038	)	 	 	(25,536	)	 	 	21,521	 	 	 	(1,937	)
	
                                                                      Earnings
      Before Interest, Taxes, Depreciation and Amortization
    (EBITDA)

                                                                    	 	 	(2,059	)	 	 	(6,884	)	 	 	838	 	 	 	(6,744	)	 	 	(12,685	)	 	 	12,175	 	 	 	(3,488	) 	 	 	(26,184	)	 	 	22,433	 	 	 	(1,640	)
	
                                                                      EBITDA
      + Stock Based Compensation

                                                                    	 	 	(992	)	 	 	(7,143	)	 	 	2,194	 	 	 	11,902	 	 	 	(4,413	)	 	 	15,296	 	 	 	(3,351	)	 	 	(4,724	)	 	 	28,046	 	 	 	(1,347	) 
	
                                                                      Earnings
      Before Interest and Taxes (EBIT)

                                                                    	 	 	(3,881	)	 	 	(18,416	)	 	 	(1,236	)	 	 	(34,460	) 	 	 	(19,122	)	 	 	(7,321	)	 	 	(9,794	) 	 	 	(57,638	)	 	 	(14,198	)	 	 	(2,211	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                      Earnings
      Per Share

                                                                    	 	
                                                                      $

                                                                    	
                                                                      -0.61

                                                                    	 	 	
                                                                      $

                                                                    	
                                                                      -0.75

                                                                    	 	 	
                                                                      $ 

                                                                    	-0.06	 	 	
                                                                      $

                                                                    	
                                                                      -0.39

                                                                    	 	 	
                                                                      $

                                                                    	
                                                                      -1.14

                                                                    	 	 	
                                                                      $

                                                                    	
                                                                      -0.32

                                                                    	 	 	$	-0.49	 	 	
                                                                      $ 

                                                                    	
                                                                      -0.42

                                                                    	 	 	
                                                                      $ 

                                                                    	
                                                                      -0.30

                                                                    	 	 	
                                                                      $

                                                                    	
                                                                      -0.55

                                                                    	 
	
                                                                      Gross
      Margin/Revenues

                                                                    	 	 	28.3	%	 	 	55.0	%	 	 	76.7	%	 	 	36.3	%	 	 	67.6	%	 	 	30.5	%	 	 	17.7	%	 	 	60.5	%	 	 	22.7	%	 	 	64.7	%
	
                                                                      Operating
      Expenses/Revenues

                                                                    	 	 	34.6	%	 	 	77.5	%	 	 	83.3	%	 	 	62.0	%	 	 	109.0	%	 	 	36.7	%	 	 	27.0	%	 	 	70.7	%	 	 	28.3	%	 	 	77.9	%
	
                                                                      EBITDA/Revenues

                                                                    	 	 	-3.3	%	 	 	-8.4	%	 	 	4.4	%	 	 	-5.0	%	 	 	-27.5	%	 	 	10.2	%	 	 	-3.3	%	 	 	-4.7	%	 	 	8.8	%	 	 	-9.8	%
	
                                                                      EBITDA
      +Stock Based Compensation /Revenues

                                                                    	 	 	-1.6	%	 	 	-8.7	%	 	 	11.6	%	 	 	8.9	%	 	 	-9.6	%	 	 	12.8	%	 	 	-3.2	%	 	 	-0.8	%	 	 	10.9	%	 	 	-8.0	%
	
                                                                      EBIT/Revenues

                                                                    	 	 	-6.3	%	 	 	-22.5	%	 	 	-6.5	%	 	 	-25.7	%	 	 	-41.4	%	 	 	-61	%	 	 	-9.3	%	 	 	-103	%	 	 	-5.5	%	 	 	-13.2	%
	
                                                                      Depr
      & Amort /Revenues

                                                                    	 	 	3.0	%	 	 	14.1	%	 	 	11.0	%	 	 	20.7	%	 	 	13.9	%	 	 	16.3	%	 	 	6.0	%	 	 	5.6	%	 	 	14.3	%	 	 	3.4	%
	
                                                                      Depr
      & Amort /Total Assets

                                                                    	 	 	4.3	%	 	 	17.6	%	 	 	17.7	%	 	 	11.6	%	 	 	9.6	%	 	 	42.6	%	 	 	8.3	%	 	 	5.2	%	 	 	13.7	%	 	 	4.6	%
	
                                                                      Net
      Income/Revenues

                                                                    	 	 	-6.3	%	 	 	-27.8	%	 	 	-8.7	%	 	 	-25.0	%	 	 	-41.6	%	 	 	-9.7	%	 	 	-11.7	%	 	 	-10.1	%	 	 	-5.9	%	 	 	-14.9	%
	
                                                                      Net
      Income/Equity

                                                                    	 	 	-30.5	%	 	 	-128.5	%	 	 	44.8	%	 	 	-16.0	%	 	 	-166.5	%	 	 	-38.1	%	 	 	1129.4	%	 	 	-14.9	%	 	 	-8.2	%	 	 	-29.7	%
	
                                                                      Gross
      Cash Flow/Revenues

                                                                    	 	 	-3.4	%	 	 	-13.7	%	 	 	2.3	%	 	 	-4.3	%	 	 	-27.6	%	 	 	6.6	%	 	 	-5.7	%	 	 	-4.5	%	 	 	8.4	%	 	 	-11.5	%
	
                                                                      Long
      Term Debt/Equity

                                                                    	 	 	0.0	 	 	 	0.2	 	 	 	0.4	 	 	 	0.0	 	 	 	0.0	 	 	 	0.2	 	 	 	0.0	 	 	 	0.0	 	 	 	0.1	 	 	 	0.0	 
	
                                                                      Working
      Capital

                                                                    	 	 	-2,595	 	 	 	3,691	 	 	 	-1,969	 	 	 	161,734	 	 	 	-19,800	 	 	 	3,313	 	 	 	-25,512	 	 	 	278,198	 	 	 	74,539	 	 	 	7,224	 
	
                                                                      Working
      Cap/Revenues

                                                                    	 	 	-4.2	%	 	 	4.5	%	 	 	-10.4	%	 	 	120.8	%	 	 	-42.9	%	 	 	2.8	%	 	 	-24.2	%	 	 	49.5	%	 	 	29.1	%	 	 	43.0	%
	
                                                                      Current
      Ratio

                                                                    	 	 	0.9	 	 	 	1.1	 	 	 	0.7	 	 	 	6.7	 	 	 	0.6	 	 	 	1.5	 	 	 	0.7	 	 	 	2.4	 	 	 	3.2	 	 	 	2.9	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                      
                                                                        Market
      Value of Invested Capital to Revenues

                                                                      

                                                                    	 	 	0.22	 	 	 	0.45	 	 	 	1.83	 	 	 	1.41	 	 	 	0.80	 	 	 	0.35	 	 	 	0.31	 	 	 	0.59	 	 	 	0.97	 	 	 	0.64	 
	
                                                                      EBITDA

                                                                    	 	
                                                                      NM

                                                                    	 	 	
                                                                      NM

                                                                    	 	 	 	41.35	 	 	
                                                                      NM

                                                                    	 	 	
                                                                      NM

                                                                    	 	 	 	3.41	 	 	
                                                                      NM

                                                                    	 	 	
                                                                      NM

                                                                    	 	 	 	11.08	 	 	
                                                                      NM

                                                                    	 


                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit 6

    The
Orchard Enterprises, Inc.

    Guideline
Public Company Method Ranking Analysis

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	 
      	 	 	 	 	 
      	 	 	 	 	 
      	 	 	 	 	 
      	 	
                                    EBITDA
      +Stock

                                  	 
	 
      	 	
                                    Gross

                                  	 	 	 
      	 	
                                    Operating

                                  	 	 	 
      	 	 	 	 	 
      	 	
                                    Based
      Compensation

                                  	 
	 
      	 	
                                    Margin/Revenues

                                  	 	 	 
      	 	
                                    Expenses/Revenues

                                  	 	 	 
      	 	
                                    EBITDA/Revenues

                                  	 	 	 
      	 	
                                    /Revenues

                                  	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                    EDGAR
      Online, Inc.

                                  	 	 	76.7	%	 	
                                    Image

                                  	 	 	27.0	%	 	
                                    WebMediaBrands
      Inc.

                                  	 	 	10.2	%	 	
                                    WebMediaBrands
      Inc.

                                  	 	 	12.8	%
	
                                    Salary.Com,
      Inc.

                                  	 	 	67.6	%	 	
                                    Internap

                                  	 	 	28.3	%	 	
                                    Internap

                                  	 	 	8.8	%	 	
                                    EDGAR
      Online, Inc

                                  	 	 	11.6	%
	
                                    LiveWire

                                  	 	 	64
      7	%	 	
                                    Orchard

                                  	 	 	34.6	%	 	
                                    EDGAR
      Online, Inc.

                                  	 	 	4.4	%	 	
                                    Internap

                                  	 	 	109	%
	
                                    RealNetworks,
      Inc.

                                  	 	 	60.5	%	 	
                                    WebMediaBrands
      Inc.

                                  	 	 	36.7	%	 	
                                    Image

                                  	 	 	-3.3	%	 	
                                    Limelight

                                  	 	 	8.9	%
	
                                    Glu
      Mobile, Inc.

                                  	 	 	55.0	%	 	
                                    Limelight

                                  	 	 	62.0	%	 	
                                    Orchard

                                  	 	 	-3.3	%	 	
                                    RealNetworks,
      Inc.

                                  	 	 	-0.8	%
	
                                    Limelight

                                  	 	 	36.3	%	 	
                                    RealNetworks,
      Inc.

                                  	 	 	70.7	%	 	
                                    RealNetworks,
      Inc.

                                  	 	 	-4.7	%	 	
                                    Orchard

                                  	 	 	-1.6	%
	
                                    WebMediaBrands
      Inc.

                                  	 	 	30.5	%	 	
                                    Glu
      Mobile, Inc.

                                  	 	 	77.5	%	 	
                                    Limelight

                                  	 	 	-5.0	%	 	
                                    Image

                                  	 	 	-3.2	%
	
                                    Orchard

                                  	 	 	28.3	%	 	
                                    LiveWire

                                  	 	 	77.9	%	 	
                                    Glu
      Mobile, Inc.

                                  	 	 	-8.4	%	 	
                                    LiveWire

                                  	 	 	-8.0	%
	
                                    Internap

                                  	 	 	22.7	%	 	
                                    EDGAR
      Online, Inc.

                                  	 	 	83.3	%	 	
                                    LiveWire

                                  	 	 	-9.8	%	 	
                                    Glu
      Mobile, Inc.

                                  	 	 	-8.7	%
	
                                    Image

                                  	 	 	17.7	%	 	
                                    Salary.Com,
      Inc.

                                  	 	 	109.0	%	 	
                                    Salary.Com,
      Inc.

                                  	 	 	-27.5	%	 	
                                    Salary.Com,
      Inc.

                                  	 	 	-9.6	%
	 
      	 	 	 	 	 	 
      	 	 	 	 	 	 
      	 	 	 	 	 	 
      	 	 	 	 
	
                                    Average

                                  	 	 	48.0	%	 	 
      	 	 	63.6	%	 	 
      	 	 	-3.9	%	 	 
      	 	 	1.5	%
	
                                    Median

                                  	 	 	55.0	%	 	 
      	 	 	70.7	%	 	 
      	 	 	-4.7	%	 	 
      	 	 	-0.8	%


                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	 
      	 	
                                        Long
      Term

                                        Debt/Equity

                                      	 	 	 
      	 	
                                        Working
      Cap/Revenues

                                      	 	 	 
      	 	
                                        Current
      Ratio

                                      	 	 	 
      	 	
                                        EBIT/Revenues

                                      	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                        Salary.Com,
      Inc.

                                      	 	 	0.0	 	 	
                                        Limelight

                                      	 	 	120.8	%	 	
                                        Limelight

                                      	 	 	6.7	 	 	
                                        Intemap

                                      	 	 	-5.5	%
	
                                        RealNetworks,
      Inc.

                                      	 	 	0.0	 	 	
                                        RealNetworks,
      Inc.

                                      	 	 	49.5	%	 	
                                        Internap

                                      	 	 	3.2	 	 	
                                        WebMediaBrands
      Inc.

                                      	 	 	-6.1	%
	
                                        Orchard

                                      	 	 	0.0	 	 	
                                        LiveWire

                                      	 	 	43.0	%	 	
                                        LiveWire

                                      	 	 	2.9	 	 	
                                        Orchard

                                      	 	 	-6.3	%
	
                                        Limelight

                                      	 	 	0.0	 	 	
                                        Internap

                                      	 	 	29.1	%	 	
                                        RealNetworks,
      Inc.

                                      	 	 	2.4	 	 	
                                        EDGAR
      Online, Inc.

                                      	 	 	-6.5	%
	
                                        Image

                                      	 	 	0.0	 	 	
                                        Glu
      Mobile, Inc.

                                      	 	 	4.5	%	 	
                                        WebMediaBrands
      Inc.

                                      	 	 	1.5	 	 	
                                        Image

                                      	 	 	-9.3	%
	
                                        LiveWire

                                      	 	 	0.0	 	 	
                                        WebMediaBrands
      Inc.

                                      	 	 	2.8	%	 	
                                        Glu
      Mobile, Inc.

                                      	 	 	1.1	 	 	
                                        RealNetworks,
      Inc.

                                      	 	 	-10.3	%
	
                                        Internap

                                      	 	 	0.1	 	 	
                                        Orchard

                                      	 	 	-4.2	%	 	
                                        Orchard

                                      	 	 	0.9	 	 	
                                        LiveWire

                                      	 	 	-13.2	%
	
                                        Glu
      Mobile. Inc.

                                      	 	 	0.2	 	 	
                                        EDGAR
      Online, Inc.

                                      	 	 	-10.4	%	 	
                                        EDGAR
      Online, Inc.

                                      	 	 	0.7	 	 	
                                        Glu
      Mobile, Inc.

                                      	 	 	-22.5	%
	
                                        WebMediaBrands
      Inc.

                                      	 	 	0.2	 	 	
                                        Image

                                      	 	 	-24.2	%	 	
                                        Image

                                      	 	 	0.7	 	 	
                                        Limelight

                                      	 	 	-25.7	%
	
                                        EDGAR
      Online, Inc.

                                      	 	 	0.4	 	 	
                                        Salary.Com,
      Inc.

                                      	 	 	-42.9	%	 	
                                        Salary.Com,
      Inc.

                                      	 	 	0.6	 	 	
                                        Salary.Com,
      Inc.

                                      	 	 	-41.4	%
	 
      	 	 	 	 	 	 
      	 	 	 	 	 	 
      	 	 	 	 	 	 
      	 	 	 	 
	
                                        Average

                                      	 	 	0.1	 	 	 
      	 	 	19.1	%	 	 
      	 	 	2.2	 	 	 
      	 	 	-15.6	%
	
                                        Median

                                      	 	 	0.0	 	 	 
      	 	 	4.5	%	 	 
      	 	 	1.5	 	 	 
      	 	 	-10.3	%


                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    Note:
Averages and Medians exclude Orchard

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
7

    The
Orchard Enterprises, Inc.

    Guideline
Company Transaction Detail

    (000's)

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              	 
      	 	 
      	 	 
      	 	
                                                      Sale

                                                    	 	
                                                      Latest
      Fiscal Year

                                                    	 	 	 	 	 	
                                                      MVIC/

                                                    	 
	
                                                      Business
      Description

                                                    	 	
                                                      Target
      Company Name

                                                    	 	
                                                      Acquiring
      Company Name

                                                    	 	
                                                      Date

                                                    	 	
                                                      Revenues

                                                    	 	 	
                                                      EBITDA

                                                    	 	 	
                                                      MVIC

                                                    	 	 	
                                                      Revenues

                                                    	 
	 
      	 	 
      	 	 
      	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                      Digital
      media and 1PTV solutions provider

                                                    	 	
                                                      Visual
      Connection

                                                    	 	
                                                      KIT
      Digital,lnc

                                                    	 	
                                                      10/5/2008

                                                    	 	 	10,356	 	 	 	N/M	 	 	 	4,344	 	 	 	0.42	 
	 
      	 	 
      	 	 
      	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                      Provides
      Audio services for content download and playback on personal
      computers

                                                    	 	
                                                      Audible,
      Inc.

                                                    	 	
                                                      Amazon.com
      Inc.

                                                    	 	
                                                      3/19/2008

                                                    	 	 	101,979	 	 	 	2,326	 	 	 	277,377	 	 	 	2.72	 
	 
      	 	 
      	 	 
      	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                      Provider
      of video and audio content distribution to advertisers

                                                    	 	
                                                      Vyvx
      Ads Business

                                                    	 	
                                                      DG
      Fast Channel, Inc.

                                                    	 	
                                                      6/5/2008

                                                    	 	 	36,411	 	 	 	10,516	 	 	 	129,000	 	 	 	3.54	 
	 
      	 	 
      	 	 
      	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                      Distribution
      of program and advertising content to television and radio
      stations

                                                    	 	
                                                      Applied
      Graphics Technologies, Inc.

                                                    	 	
                                                      Digital
      Generation Systems, Inc.

                                                    	 	
                                                      6/10/2004

                                                    	 	 	21,546	 	 	 	274	 	 	 	14,100	 	 	 	0.65	 
	 
      	 	 
      	 	 
      	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                      Distribution
      of entertainment programming and home video products

                                                    	 	
                                                      Good
      Times Entertainment

                                                    	 	
                                                      Gaiam
      Inc

                                                    	 	
                                                      9/13/2005

                                                    	 	 	141,954	 	 	 	N/M	 	 	 	34,405	 	 	 	0.24	 
	 
      	 	 
      	 	 
      	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                      Digital
      distribution of motion pictures over the internet

                                                    	 	
                                                      Movie
      link

                                                    	 	
                                                      Blockbuster

                                                    	 	
                                                      8/8/2007

                                                    	 	 	4,053	 	 	 	N/M	 	 	 	7,000	 	 	 	1.73	 
	 
      	 	 
      	 	 
      	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                      Markets
      and distributes digital images and provides visual content

                                                    	 	
                                                      Creates
      LLC

                                                    	 	
                                                      Jupiter
      media Corp

                                                    	 	
                                                      3/7/2005

                                                    	 	 	43,073	 	 	 	2,949	 	 	 	60,400	 	 	 	1.40	 
	 
      	 	 
      	 	 
      	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                      Provides
      digital background music and messaging services via the
      internet

                                                    	 	
                                                      Transonic
      Inc.

                                                    	 	
                                                      Fluid
      Media Networks, Inc.

                                                    	 	
                                                      10/17/2007

                                                    	 	 	2,838	 	 	 	N/M	 	 	 	6,000	 	 	 	2.11	 
	 
      	 	 
      	 	 
      	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                      Provides
      downloadable mobile content including ringtones and background wallpaper
      and text alerts

                                                    	 	
                                                      Ringtone.com
      LLC

                                                    	 	
                                                      New
      Morion, Inc.

                                                    	 	
                                                      6/30/2008

                                                    	 	 	10,226	 	 	 	N/M	 	 	 	8,653	 	 	 	0.85	 
	 
      	 	 
      	 	 
      	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                      Direct
      to consumer mobile internet content and services

                                                    	 	
                                                      AMV
      Holding Limited

                                                    	 	
                                                      Mandalay
      Media, Inc.

                                                    	 	
                                                      10/23/2008

                                                    	 	 	29,497	 	 	 	4,244	 	 	 	22,552	 	 	 	0.76	 
	 
      	 	 
      	 	 
      	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                      Note:
      Some amounts may not foot due to rounding

                                                    	 	 
      	 	 
      	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	 	 
      	 	 
      	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                      Low

                                                    	 	 
      	 	 
      	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0.24	 
	
                                                      High

                                                    	 	 
      	 	 
      	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	3.54	 
	
                                                      Mean

                                                    	 	 
      	 	 
      	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1.44	 
	
                                                      Median

                                                    	 	 
      	 	 
      	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1.12	 
	
                                                      Standard
      Deviation

                                                    	 	 
      	 	 
      	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1.08	 
	
                                                      Coefficient
      of Variation (Standard Deviation\Mean)

                                                    	 	 
      	 	 
      	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0.75	 


                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    SOURCE: Pratt's Stats, Public Stats and
Mergerstat

    N/M
= Not Meaningful

    MVIC
= Market Value of Invested Capital


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

     

    Exhibit
8

    The
Orchard Enterprises, Inc.

    Business
Enterprise Value- Without eMusic Synergies and Private Company Cost
Savings

    Discounted
Cash Flow Method

    December
31, 2009

    (000's)

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                	
                                                                                        Aggressive
      Case

                                                                                      	 	
                                                                                        2010

                                                                                      	 	 	
                                                                                        2011

                                                                                      	 	 	
                                                                                        2012

                                                                                      	 	 	
                                                                                        2013

                                                                                      	 	 	
                                                                                        2014

                                                                                      	 	 	
                                                                                        Residual

                                                                                      	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                        Debt
      Free Cash Flow (Net Cash Flow to Invested Capital)

                                                                                      	 	$	3,836	 	 	$	4,478	 	 	$	6,364	 	 	$	7,568	 	 	$	5,792	 	 	$	4,878	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                        Capitalized
      Residual Value

                                                                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	30,488	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                        Present
      Value Mid-Year Discount Factor
      @                            20%

                                                                                      	 	 	0.91287	 	 	 	0.76073	 	 	 	0.63394	 	 	 	0.52828	 	 	 	0.44023	 	 	 	0.44023	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                        Net
      Present Value of Cash Flow

                                                                                      	 	 	3,502	 	 	 	3,407	 	 	 	4,034	 	 	 	3,998	 	 	 	2,550	 	 	 	13,422	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                        Indicated
      Enterprise Value (Market Value of Invested Capital)

                                                                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	30,913	 
	
                                                                                        Less:
      Interest Bearing Debt

                                                                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	
                                                                                        Plus-
      present value of NOL carryforward tax benefit after 2014

                                                                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	792	 
	
                                                                                        Less:
      Series A
      Preferred Stock Liquidation Preference

                                                                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(24,993	)
	
                                                                                        Indication
      of Controlling, Marketable Equity Value - Common Stock

                                                                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	6,712	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                        Base
      Case

                                                                                      	 	
                                                                                        2010

                                                                                      	 	 	
                                                                                        2011

                                                                                      	 	 	
                                                                                        2012

                                                                                      	 	 	
                                                                                        2013

                                                                                      	 	 	
                                                                                        2014

                                                                                      	 	 	
                                                                                        Residual

                                                                                      	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                        Debt
      Free Cash Flow (Net Cash Flow to Invested Capital)

                                                                                      	 	$	2,631	 	 	$	3,125	 	 	$	4,943	 	 	$	6,035	 	 	$	7,102	 	 	$	3,840	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                        Capitalized
      Residual Value

                                                                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	24,000	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                        Present
      Value Mid-Year Discount Factor
      @                            20%

                                                                                      	 	 	0.91287	 	 	 	0.76073	 	 	 	0.63394	 	 	 	0.52828	 	 	 	0.44023	 	 	 	0.44023	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                        Net
      Present Value of Cash Flow

                                                                                      	 	 	2,402	 	 	 	2,377	 	 	 	3,134	 	 	 	3,188	 	 	 	3,127	 	 	 	10,566	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                        Indicated
      Enterprise Value (Market Value of Invested Capital)

                                                                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	24,793	 
	
                                                                                        Less:
      Interest Bearing Debt

                                                                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	
                                                                                        Plus-
      present value of NOL carryforward tax benefit after 2014

                                                                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	792	 
	
                                                                                        Less:
      Series A
      Preferred Stock Liquidation Preference

                                                                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(24,993	)
	
                                                                                        Indication
      of Controlling, Marketable Equity Value - Common Stock

                                                                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	592	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                        Worst
      Case

                                                                                      	 	
                                                                                        2010

                                                                                      	 	 	
                                                                                        2011

                                                                                      	 	 	
                                                                                        2012

                                                                                      	 	 	
                                                                                        2013

                                                                                      	 	 	
                                                                                        2014

                                                                                      	 	 	
                                                                                        Residual

                                                                                      	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                        Debt
      Free Cash Flow (Net Cash Flow to Invested Capital)

                                                                                      	 	$	1,683	 	 	$	1,828	 	 	$	3,371	 	 	$	4,678	 	 	$	5,607	 	 	$	2,903	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                        Capitalized
      Residual Value

                                                                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	18,144	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                        Present
      Value Mid-Year Discount Factor
      @                            20%

                                                                                      	 	 	0.91287	 	 	 	0.76073	 	 	 	0.63394	 	 	 	0.52828	 	 	 	0.44023	 	 	 	0.44023	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                        Net
      Present Value of Cash Flow

                                                                                      	 	 	1,536	 	 	 	1,391	 	 	 	2,137	 	 	 	2,471	 	 	 	2,468	 	 	 	7,988	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                        Indicated
      Enterprise Value (Market Value of Invested Capital)

                                                                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	17,991	 
	
                                                                                        Less:
      Interest Bearing Debt

                                                                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	
                                                                                        Plus-
      present value of NOL carryforward tax benefit after 2014

                                                                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,326	 
	
                                                                                        Less:
      Series A Preferred Stock Liquidation
      Preference

                                                                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(24,993	)
	
                                                                                        Indication
      of Controlling, Marketable Equity Value - Common Stock

                                                                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	(5,676	)


                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                   

                                	 	
                                  Indicated

                                	 	 	
                                  Indicated

                                	 	 	 	 	 	 	 
	 
      	 	
                                  Enterprise

                                	 	 	
                                  Common

                                	 	 	
                                  Common

                                	 	 	
                                  Common

                                	 
	
                                  Summary

                                	 	
                                  Value

                                	 	 	
                                  Value

                                	 	 	
                                  Shares
      o/s

                                	 	 	
                                  Share
      Price

                                	 
	
                                  Aggressive
      Case

                                	 	$	31,705	 	 	$	6,712	 	 	 	6,378,252	 	 	$	1.05	 
	
                                  Base
      Case

                                	 	 	25,585	 	 	 	592	 	 	 	6,378,252	 	 	$	0.09	 
	
                                  Worst
      Case

                                	 	 	19,317	 	 	 	0	 	 	 	6,378,252	 	 	$	0.00	 


                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
9

    The
Orchard Enterprises, Inc.

    Business
Enterprise Value - Buyer Scenerio With eMusic Synergies and Private Company Cost
Savings

    Discounted
Cash Flow Method

    December
31,2009

    (000's)

    


    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  Aggressive
      Case

                                	 	 	 	 	
                                  2010

                                	 	 	
                                  2011

                                	 	 	
                                  2012

                                	 	 	
                                  2013

                                	 	 	
                                  2014

                                	 	 	
                                  Residual

                                	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Debt
      Free Cash Flow (Net Cash Flow to Invested Capital)

                                	 	 	 	 	$	2,864	 	 	$	3,364	 	 	$	4,477	 	 	$	5,219	 	 	$	5,912	 	 	$	4,878	 
	
                                  Add
      eMusic Synergies and Private Co. Cost Savings, net of
taxes

                                	 	 	 	 	 	910	 	 	 	956	 	 	 	1,004	 	 	 	1,054	 	 	 	1,106	 	 	 	1,151	 
	
                                  Total
      Debt Free Cash Flow

                                	 	 	 	 	 	3,774	 	 	 	4,319	 	 	 	5,481	 	 	 	6,273	 	 	 	7,019	 	 	 	6,029	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Capitalized
      Residual Value

                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	37,679	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Present
      Value Mid-Year Discount Factor @

                                	 	 	
                                  20%

                                	 	 	 	0.91287	 	 	 	0.76073	 	 	 	0.63394	 	 	 	0.52828	 	 	 	0.44023	 	 	 	0.44023	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Net
      Present Value of Cash Flow

                                	 	 	 	 	 	 	3,445	 	 	 	3,286	 	 	 	3,474	 	 	 	3,314	 	 	 	3,090	 	 	 	16,588	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Indicated
      Enterprise Value (Market Value of Invested Capital)

                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	33,197	 
	
                                  Present
      value of NOL tax benefit post 2014

                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	547	 
	
                                  Less:
      Interest Bearing Debt

                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	
                                  Less:
      Series A Preferred Stock Liquidation Preference

                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(24,993	)
	
                                  Indication
      of Controlling, Marketable Equity Value

                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	8,751	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Base
      Case

                                	 	 	 	 	 	
                                  2010

                                	 	 	
                                  2011

                                	 	 	
                                  2012

                                	 	 	
                                  2013

                                	 	 	
                                  2014

                                	 	 	
                                  Residual

                                	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Debt
      Free Cash Flow (Net Cash Flow to Invested Capital)

                                	 	 	 	 	 	$	2,161	 	 	$	2,555	 	 	$	3,626	 	 	$	4,302	 	 	$	4,920	 	 	$	3,840	 
	
                                  Add
      eMusic Synergies and Private Co. Cost Savings, net of
taxes

                                	 	 	 	 	 	 	910	 	 	 	956	 	 	 	1,004	 	 	 	1,054	 	 	 	1,106	 	 	 	1,151	 
	
                                  Total
      Debt Free Cash Flow

                                	 	 	 	 	 	 	3,071	 	 	 	3,510	 	 	 	4,629	 	 	 	5,355	 	 	 	6,027	 	 	 	4,991	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Capitalized
      Residual Value

                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	31,192	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Present
      Value Mid-Year Discount Factor @

                                	 	 	
                                  20%

                                	 	 	 	0.91287	 	 	 	0.76073	 	 	 	0.63394	 	 	 	0.52828	 	 	 	0.44023	 	 	 	0.44023	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Net
      Present Value of Cash Flow

                                	 	 	 	 	 	 	2,803	 	 	 	2,670	 	 	 	2,935	 	 	 	2,829	 	 	 	2,653	 	 	 	13,732	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Indicated
      Enterprise Value (Market Value of Invested Capital)

                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	27,623	 
	
                                  Present
      value of NOL tax benefit post 2014

                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	547	 
	
                                  Less:
      Interest Bearing Debt

                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	
                                  Less:
      Series A Preferred Stock Liquidation Preference

                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(24,993	)
	
                                  Indication
      of Controlling, Marketable Equity Value

                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	3,177	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Worst
      Case

                                	 	 	 	 	 	
                                  2010

                                	 	 	
                                  2011

                                	 	 	
                                  2012

                                	 	 	
                                  2013

                                	 	 	
                                  2014

                                	 	 	
                                  Residual

                                	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Debt
      Free Cash Flow (Net Cash Flow to Invested Capital)

                                	 	 	 	 	 	$	1,616	 	 	$	1,779	 	 	$	2,687	 	 	$	3,491	 	 	$	4,027	 	 	$	2,903	 
	
                                  Add
      eMusic Synergies and Private Co. Cost Savings, net of
taxes

                                	 	 	 	 	 	 	910	 	 	 	956	 	 	 	1,004	 	 	 	1,054	 	 	 	1,106	 	 	 	1,151	 
	
                                  Total
      Debt Free Cash Flow

                                	 	 	 	 	 	 	2,526	 	 	 	2,735	 	 	 	3,690	 	 	 	4,544	 	 	 	5,133	 	 	 	4,054	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Capitalized
      Residual Value

                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	25,338	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Present
      Value Mid-Year Discount Factor @

                                	 	 	
                                  20%

                                	 	 	 	0.91287	 	 	 	0.76073	 	 	 	0.63394	 	 	 	0.52828	 	 	 	0.44023	 	 	 	0.44023	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Net
      Present Value of Cash Flow

                                	 	 	 	 	 	 	2,306	 	 	 	2,081	 	 	 	2,339	 	 	 	2,401	 	 	 	2,260	 	 	 	11,155	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Indicated
      Enterprise Value (Market Value of Invested Capital)

                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	22,541	 
	
                                  Present
      value of NOL tax benefit post 2014

                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	547	 
	
                                  Less:
      Interest Bearing Debt

                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	
                                  Less:
      Series A Preferred Stock Liquidation Preference

                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(24,993	)
	
                                  Indication
      of Controlling, Marketable Equity Value

                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	(1,904	)


                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          
            	 
      	 	
                    Indicated

                  	 	 	
                    Indicated

                  	 	 	 	 	 	 	 
	 
      	 	
                    Enterprise

                  	 	 	
                    Common

                  	 	 	
                    Common

                  	 	 	
                    Common

                  	 
	
                    Summary

                  	 	
                    Value

                  	 	 	
                    Value

                  	 	 	
                    Shares
    o/s

                  	 	 	
                    Share
    Price

                  	 
	
                    Aggressive
      Case

                  	 	$	33,744	 	 	$	8,751	 	 	 	6,378,252	 	 	$	1.37	 
	
                    Base
      Case

                  	 	 	28,170	 	 	 	3,177	 	 	 	6,378,252	 	 	$	0.50	 
	
                    Worst
      Case

                  	 	 	23,089	 	 	 	0	 	 	 	6,378,252	 	 	$	0.00	 


          

        

      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    Exhibit
10

    The
Orchard Enterprises, Inc.

    eMusic
Synergies and Private Company Cost Savings

    


    
      
        
          
            
              	
                      Management's
      estimated cost savings:

                    	 	
                      eMusic

                      Synergistic

                      Cost Savings

                    	 	 	
                      Private

                      Company

                      Cost Savings

                    	 	 	
                      Total

                    	 
	
                      Employee
      expenses

                    	 	$	853,218	 	 	$	469,551	 	 	 	 
	
                      Professional
      services

                    	 	 	190,000	 	 	 	782,700	 	 	 	 
	
                      Insurance
      and SG&A

                    	 	 	122,000	 	 	 	47,798	 	 	 	 
	
                      Marketing
      and promotion

                    	 	 	119,000	 	 	 	0	 	 	 	 
	
                      Office
      expenses

                    	 	 	350,000	 	 	 	0	 	 	 	 
	
                      Travel
      and entertainment

                    	 	 	100,000	 	 	 	0	 	 	 	 
	 
      	 	 	 	 	 	 	 	 	 	 	 
	
                      Total
      management's estimated cost savings

                    	 	 	1,734,218	 	 	 	1,300,049	 	 	 	 
	 
      	 	 	 	 	 	 	 	 	 	 	 
	
                      Income
      taxes at 40%

                    	 	 	693,687	 	 	 	520,020	 	 	 	 
	 
      	 	 	 	 	 	 	 	 	 	 	 
	
                      After-tax
      cost savings

                    	 	$	1,040,531	 	 	$	780,029	 	 	$	1,820,560	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 
	
                      Assumed
      split between buyer and seller

                    	 	 	 	 	 	 	 	 	 	 	50	%
	 
      	 	 	 	 	 	 	 	 	 	 	 	 
	
                      Assumed
      after-tax savings that buyer would be willing to pay for

                    	 	 	 	 	 	 	 	 	 	$	910,280	 


            

          

        

      

    

    


    Note:
Some amounts may not foot due to rounding


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    Exhibit
11

    The
Orchard Enterprises, Inc.

    Weighted
Average Cost of Capital Analysis


     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	
                                              
         MCAPM,
      Cost of Equity

                                          	 	 	 	 	 	 	 
      	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	
                                            (1)
      Risk-Free Rate

                                          	 	 	 	 	 	4.53	%	 
      	 	 	 
	
                                            (2)
      Beta

                                          	 	 	1.20	 	 	 	 	 	 
      	 	 	 
	
                                            (3)
      Market Premium

                                          	 	 	6.50	%	 	 	7.80	%	 
      	 	 	 
	
                                            (4)
      Size Premium

                                          	 	 	 	 	 	 	5.81	%	 
      	 	 	 
	
                                            (5)
      Company Specific Risk Premium

                                          	 	 	 	 	 	 	1.00	%	 
      	 	 	 
	 
      	 	 	 	 	 	 	19.14	%	 
      	 	 	 
	
                                               
        Build-Up Method, Cost of Equity

                                          	 	 	 	 	 	 	 	 	 
      	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                            (1)
      Risk-Free Rate

                                          	 	 	 	 	 	 	4.53	%	 
      	 	 	 
	
                                            (7)
      Industry Risk Premium

                                          	 	 	 	 	 	 	4.03	%	 
      	 	 	 
	
                                            (3)
      Market Premium

                                          	 	 	 	 	 	 	6.50	%	 
      	 	 	 
	
                                            (4)
      Size Premium

                                          	 	 	 	 	 	 	5.81	%	 
      	 	 	 
	
                                            (5)
      Company Specific Risk Premium

                                          	 	 	 	 	 	 	1.00	%	 
      	 	 	 
	 
      	 	 	 	 	 	 	21.87	%	 
      	 	 	 
	 
      	 	 	 	 	 	 	 	 	 
      	 	 	 
	
                                                
       Duff & Phelps Risk Premium Study Report on Size
      Characteristics

                                          	 	 	 	 	 	 	 	 	 
      	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                            (1)
      Risk-Free Rate

                                          	 	 	 	 	 	 	4.53	%	 
      	 	 	 
	
                                            (6)
      Size Specific Equity Risk Premium

                                          	 	 	 	 	 	 	11.32	%	 
      	 	 	 
	
                                            (7)
      Industry Risk Premium

                                          	 	 	 	 	 	 	4.03	%	 
      	 	 	 
	
                                            (5)
      Company Specific Risk Premium

                                          	 	 	 	 	 	 	1.00	%	 
      	 	 	 
	 
      	 	 	 	 	 	 	20.88	%	 
      	 	 	 
	 
      	 	 	 	 	 	 	 	 	 
      	 	 	 
	
                                            Range

                                          	 	
                                            =

                                          	 	 	 	19.14	%	
                                            to

                                          	 	 	21.87	%
	
                                            Concluded
      Cost of Equity

                                          	 	
                                            =

                                          	 	 	 	20.00	%	 
      	 	 	 	 
	 
      	 	 	 	 	 	 	 	 	 
      	 	 	 	 
	
                                                 
      After-tax Cost of Debt

                                          	 	 	 	 	 	 	 	 	 
      	 	 	 	 
	 
       	 	 	 	 	 	 	 	 	 
      	 	 	 	 
	
                                                 
      Borrowing Rate

                                          	 	 	 	 	 	 	0.00	%	 
      	 	 	 	 
	
                                                 
      Estimated Tax Rate

                                          	 	 	 	 	 	 	0.00	%	 
      	 	 	 	 
	
                                                
       After-tax Cost of Debt

                                          	 	 	 	 	 	 	0.00	%	 
      	 	 	 	 
	 
      	 	 	 	 	 	 	 	 	 
      	 	 	 	 
	
                                                 
      Weighted Average Cost of Capital (WACC)

                                          	 	 	 	 	 	 	 	 	 
      	 	 	 	 
	
                                             

                                          	 	 	 	 	 	 	 	 	 	 
	
                                             

                                          	 	
                                            Capital

                                            Structure [8]

                                          	 	 	
                                            Cost

                                          	 	 
      	 	
                                            Weighted

                                            Cost

                                          	 
	
                                            Debt

                                          	 	 	0.00	%	 	 	0.00	%	 
      	 	 	0.00	%
	
                                            Equity

                                          	 	 	100.00	%	 	 	20.00	%	 
      	 	 	20.00	%
	 
      	 	 	 	 	 	 	 	 	 
      	 	 	 	 
	 
      	 	 	 	 	 	
                                            WACC

                                          	 	
                                            =

                                          	 	 	20.00	%


                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          	
                  (1)

                	
                  Based
      on 20-year U.S. Treasury at March 10, 2010 as published by Federal Reserve Board of Saint
      Louis

                


        

        
          	
                  (2)

                	
                  Beta
      estimated from analysis of betas of guideline public
    companies

                


        

        
          	
                  (3)

                	
                  Ibbotson:
      Stocks, Bonds, Bills,
      and Inflation Yearbook 2009 Valuation
  Edition

                


        

        
          	
                  (4)

                	
                  Ibbotson:
      SBBI: Valuation Edition
      2009 Yearbook (Long-term Returns in Excess of CAPM Estimates for
      Decile Portfolios of the NYSE/AMEX/NASDAQ - 10th
  Decile)

                


        

        
          	
                  (5)

                	
                  Based
      on company-specific factors described in
  Addendum

                


        

        
          	
                  (6)

                	
                  Size
      specific equity risk premiums are based on comparison of Company to risk
      premium groups presented in the Duff & Phelps
  Study

                


        

        
          	
                  (7)

                	
                  SIC
      7375 Information Retrieval Services from Ibbotson AssociatesStocks, Bonds, Bills, and Inflation
      Valuation Edition 2009
Yearbook

                


        

        
          	
                  (8)

                	
                  Based
      on analysis of Company's
industry

                


        

      

      

        
          
             


          

          
             


            
              

            

          

          
             


          

        

      

    

     

    Exhibit
12

    The
Orchard Enterprises, Inc.

    Indications
of Value Summary

    (000's
Except per Share Value)

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	 
      	 	
                                        (000's)

                                      	 	 	
                                        Industry

                                        Multiples

                                        Selected

                                      	 	 	
                                        Indicated

                                        Value

                                        (000's)

                                      	 	 	
                                        Less:

                                        Interest

                                        Bearing

                                        Debt

                                      	 	 	
                                        Add:

                                        Cash & Mkt

                                        Securities

                                      	 	 	
                                        Minority

                                        Equity

                                        Value on

                                        Marketable

                                        Basis

                                      	 	 	
                                        Add:

                                        20%

                                        Control

                                        Premium

                                      	 	 	
                                        Controlling

                                        Marketable

                                        Equity

                                        Value

                                      	 	 	
                                        Less:

                                        Series A

                                        Preferred Stock

                                        Liquidation

                                        Preference

                                      	 	 	
                                        Residiual Value

                                        Available for

                                        Common

                                        Shareholders

                                      	 	 	
                                        Indicated

                                        Value

                                        Per Share

                                        Rounded

                                      	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                        Guideline
      Public Company Method

                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                        MVIC
      Approach

                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                        LTM
      (Last Twelve Months)

                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                        Based
      on Adjusted September 30, 2009

                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                        MVIC/Revenues

                                      	 	$	61,729	 	 	 	0.60	 	 	 	37,037	 	 	 	-	 	 	 	4,500	 	 	 	41,537	 	 	 	8,307	 	 	 	49,844	 	 	 	(24,993	)	 	$	24,851	 	 	$	3.90	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                        Guideline
      Public Company Method

                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                        MVIC
      Approach

                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                        Based
      on Base Case Forecasted 2010

                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                        MVIC/EBITDA

                                      	 	$	2,475	 	 	 	10.00	 	 	 	24,750	 	 	 	-	 	 	 	4,500	 	 	 	29,250	 	 	 	5,850	 	 	 	35,100	 	 	 	(24,993	)	 	$	10,107	 	 	$	1.58	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                        Guideline
      Company Transaction Method

                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                        MVIC
      Approach

                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                        LTM
      (Last Twelve Months)

                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                        Based
      on Adjusted September 30, 2009

                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                        MVIC/Revenues

                                      	 	$	61,729	 	 	 	0.60	 	 	 	37,037	 	 	 	-	 	 	 	-	 	 	 	37,037	 	 	 	-	 	 	 	37,037	 	 	 	(24,993	)	 	$	12,044	 	 	$	1.89	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                        Discounted
      Cash Flow Approach

                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                        Eauitv
      Approach

                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                        Non-strategic
      (without eMusic synergies and private cost savings)

                                      	 	 	 	 	 	 	 	 	 	 	31,705	 	 	 	-	 	 	 	-	 	 	 	31,705	 	 	 	-	 	 	 	31,705	 	 	 	(24,993	)	 	$	6,712	 	 	$	1.05	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                        Strategic
      (with eMusic synergies and private cost savings)

                                      	 	 	 	 	 	 	 	 	 	 	33,744	 	 	 	-	 	 	 	-	 	 	 	33,744	 	 	 	-	 	 	 	33,744	 	 	 	(24,993	)	 	$	8,751	 	 	$	1.37	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                        Market
      Approach

                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                        Orchard
      closing stock price on March 12, 2010

                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	1.70	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                        Orchard
      closing stock price on March 12, 2010 (with 20% control
      premium)

                                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	2.04	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                        Note
      : Total commonn shares issued and outstanding

                                      	 	 	 	 	 	 	 	 	 	 	6,378,252	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 


                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Exhibit
13

    The
Orchard Enterprises Inc.

    Historical
Stock Price - Trailing Twelve Months

    


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Exhibit
14

    The
Orchard Enterprises Inc.

    Illustrative
Summary of Values