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ACQUISITION AGREEMENT
This
ACQUISITION AGREEMENT (the “
Agreement ”),
is entered into and effective as of July 15, 2008 (the
“Closing Date”), by and among the members listed
on
Schedule A and
signatories hereto (each, a “
Member ,”
collectively, the “
Members ”),
and Platinum Studios, Inc., a California corporation
(“
Purchaser ”).
Members and Purchaser are sometimes individually or collectively
referred to as a “
Party ”
or the “
Parties .”
RECITALS
WHEREAS,
the Members own collectively one hundred percent (100%) of the
issued and outstanding membership interests and other
ownership interests (collectively, the “
Membership Interests ”)
in WOWIO, LLC, a Pennsylvania limited liability company with its
principal office located at 2525 Driscoll Street, Houston, Texas
77019 (the “
Company ”);
WHEREAS,
the Members desire to sell, assign and transfer to Purchaser,
and Purchaser desires to purchase from the Members, the
Membership Interests and to operate the Company as a
wholly-owned subsidiary of the Purchaser, upon the terms and
subject to the conditions set forth in this
Agreement.
AGREEMENT
NOW,
THEREFORE, in consideration of the promises and the mutual
covenants set forth in this Agreement, and other good and
valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties agree as
follows:
“
Action ”
means any action, arbitration, audit, demand, claim, complaint,
dispute, hearing, inquiry, investigation, litigation, prosecution
or suit (whether civil, criminal, administrative, judicial or
investigative, whether formal or informal, whether public or
private).
“
Ancillary Documents ”
means, collectively
, the
Covenants Not To Compete, the Investment Representations, the
Lock-Up Agreement and all releases and instruments executed, filed
or otherwise prepared, exchanged or delivered in accordance with
this Agreement.
“
Assumed Company Liabilities ”
shall have the meaning set forth in
Section 2.3 .
“
Claims ”
have the meaning set forth in
Section 8.5(a) .
“
Closing ”
and “
Closing Date ”
shall have the meanings set forth in
Section 3.1 .
“
Company Assets ”
shall have the meaning set forth in
Section 2.4 hereto.
“
Contested Claims ”
shall have the meaning set forth in
Section 8.6(b) .
“
Court Order ”
means any judgment, decision, decree, injunction, order, writ,
award, determination or ruling of any Governmental Entity or
arbitrator.
“
Covenants Not to Compete ”
means those certain Covenants Not to Compete, dated as of the
Closing Date, substantially in the forms set forth in
Exhibit A-1 through
Exhibit A-5 hereto.
“
Disclosure Schedules ”
shall have the meaning set forth in
Section 4 .
“
Domain Names ”
means “WOWIO.COM,” “WOWIOCOMICS.COM,”
“WOWIWOCHRISTIAN.COM,” “WOWIODEMO.COM,”
“PROJECTTEXTBOOK.COM,” and all urls associated
therewith;
“
Domain Name Transfer Filings ”
means any all necessary forms and documents required to be filed by
the Company with Network Solutions, Inc.
for
the Domain Names in order to transfer full control of the
Company’s Domain Names to Purchaser, free and clear of all
Encumbrances.
“
Encumbrance ”
means any claim, lien, mortgage, pledge, security interest,
restriction, easement, deed of trust, right of way, encroachment,
conditional sales agreement, prior assignment, option, encumbrance,
charge, agreement, or claim or right of any kind of a third party,
whether voluntarily incurred or arising by operation of law, and
includes, without limitation, any agreement to give any of the
foregoing in the future, and any contingent sale or other title
retention agreement or lease in the nature thereof.
“
Financial Statements ”
shall mean, collectively, the financial statements of the Company
for the two-year period ended December 31, 2007 and for the five
month period ended May 31, 2008.
“
Final Award ”
shall have the meaning set forth in
Section 8.6(c)(iii) .
“
Force Majeure ”
shall mean any delay or failure in performance due to any reason or
unforeseen circumstance beyond a Party’s reasonable control,
including (without limitation) acts of God or public authorities,
war and war measures (whether or not a formal declaration of war is
in effect), terrorist activities, civil unrest, fire, epidemics,
floods, earthquakes, hurricanes, or other natural disasters, or
delays in transportation, delivery or supply.
“
Governmental Entity ”
means any court, administrative agency or commission or other
governmental authority or instrumentality, domestic or
foreign.
“
Governmental Rule ”
shall have the meaning set forth in
Section 4.3 .
“
Indemnification Notice ”
shall have the meaning set forth in
Section 8.5(a) .
“
Indemnified Party ”
shall have the meaning set forth in
Section 8.5(a) .
“
Indemnitor ”
shall have the meaning set forth in
Section 8.5(a) .
“
Intellectual Property ”
means, collectively, all rights in or affecting intellectual or
industrial property or other proprietary rights, existing now or in
the future, in the United States or anywhere in the universe,
including, without limitation, any and all rights in, to, or
subsisting in the following: (a) all issued patents, reissued or
reexamined patents, revivals of patents, Company, continuations and
continuations-in-part of patents, all renewals and extensions
thereof, utility models, certificates and records of invention,
invention disclosures, and published or unpublished nonprovisional
and provisional patent applications, including the right to file
other or further applications, reexamination proceedings; (b) all
copyrights and copyrightable works, including, without limitation,
all rights of authorship, use, publication, reproduction,
distribution, performance, transformation, moral rights and
ownership of copyrightable works, the right to create derivative
works, and all applications for registration, registrations,
renewals and extensions of registrations; (c) all trademarks,
service marks, logos, trade names, fictitious business names,
domain names, 1-800, 1-888, 1-877 and other “vanity”
telephone numbers, together with the goodwill of the business
associated therewith, all applications for registration and
registrations thereof, renewals thereof, the right to bring
opposition and cancellation proceedings and any and all rights
under the laws of trade dress; (d) all business information and
materials, whether or not patentable or copyrightable, and whether
or not reduced to practice, including, without limitation, all
technology, ideas, research and development, inventions,
proprietary information, manufacturing, engineering, and operating
specifications and practices, methods, processes, procedures,
schematics, know-how, formulae, customer, member, visitor,
subscriber and supplier lists and information, product surveys,
shop rights, designs, drawings, patterns, plans, prototypes, trade
secrets, technical data, research records, market surveys, computer
programs, and all hardware, software and processes; and (e) all
other intangible assets, properties and rights (whether or not
appropriate steps have been taken to protect, under applicable law,
such other intangible assets, properties or rights) including,
without limitation, all claims, causes of action and rights to sue
for past, present and future infringement or unconsented use of any
of the Intellectual Property, the right to file applications and
obtain registrations, and all rights arising therefrom and
pertaining thereto and all products, proceeds, revenues and
royalties arising from or relating to any and all of the foregoing.
Notwithstanding anything herein to the contrary,
“Intellectual Property” shall not include any rights or
copyrights obtained by the Company pursuant to any of the Licensing
Agreements.
“
Investment Representations ”
means those investment representations, dated as of the Closing
Date, in the form set forth in
Exhibit C .
“
Lock-Up Agreement ”
means that certain Lock-Up and Leak Out Agreement, dated as of the
Closing Date, and executed by all the Members, in substantially the
same form as
Exhibit B .
“
Losses ”
shall have the meaning set forth in
Section 8.1 .
“
Major Members ”
shall mean the following Members: William Lidwell, David Palumbo,
Kristine Wasilewski, Almarmal, LLC and Robert
Kingslyn.
“
Material Adverse Effect ”
or “
Material Adverse Change ”
means any change, event or effect that is or could reasonably be
expected to be materially adverse to the business, assets
(including intangible assets), condition (financial or other),
liabilities, properties, prospects or results of operations of the
Company, the Company Assets or which otherwise could reasonably be
expected to prevent the consummation of the transactions
contemplated by this Agreement.
“
Material Contracts ”
shall have the meaning set forth in
Section 2.3(f) .
“
Permits ”
shall mean all licenses, permits, franchises, approvals,
authorizations, consents or orders of, or filings with, any
Governmental Entity, whether foreign, federal, state or local, or
any other Person, necessary or desirable for the past, present or
anticipated conduct of, or relating to the operation of the
business of the Company and/or the use of the Company
Assets.
“
Person ”
means any individual, corporation, limited liability company,
partnership, joint venture, trust, business, association or other
entity.
“
Purchase Price ”
shall have the meaning set forth in
Section 2.1(b) .
“
Resignations ”
shall have the meaning set forth in
Section 3.2 .
“
Subsidiary ”
means, with respect to any Person (including Members)(the
“Owner”), any corporation or other Person of which
securities or other interests having the power to elect a majority
of that corporation’s or other Person’s board of
directors or similar governing body, or otherwise having the power
to direct the business and policies of that corporation or other
Person (other than securities or other interests having such power
only upon the happening of a contingency that has not occurred),
are held by the Owner or one or more of its
Subsidiaries.
“
Taxes ”
means all federal, state, local and foreign taxes, charges, fees,
levies and other assessments, including, without limitation, any
income, alternative or add-on minimum tax, gross receipts, sales,
use, ad valorem, value added, transfer, franchise, profits,
withholding, payroll, employment, excise, stamp, property,
environmental or other tax, together with all interest, penalties
and additions with respect thereto.
“
Uncontested Claims ”
shall have the meaning set forth in
Section 8.6(a) .
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2.
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Purchase and Sale of Membership Interests; Earn-Out; Assumed
Liabilities; Company Assets .
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2.1
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Purchase and Sale of Membership Interests .
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(a)
Subject
to the terms and conditions of this Agreement, simultaneously
with the execution of this Agreement by all Parties hereto,
each of the Members hereby conveys, transfers, assigns and
delivers to the Purchaser, and Purchaser hereby acquires from
each of the Members, good and valid title, free and clear of
all Encumbrances, to the Membership Interests, as set forth
opposite each of the Members names on
Schedule A .
(b)
Purchaser
hereby purchases the Membership Interests from the Members for
an aggregate purchase price of $3,150,000 (“Purchase
Price”). The Purchase Price shall be allocated among the
Members in accordance with the percentage holding of
Membership Interests held by each of the Members, as set forth
opposite each of the Members names on Schedule A (the
“Pro Rata Distribution”). The Purchase Price shall
be payable in the form of shares of common stock of Purchaser
(the “Purchase Price Shares”) issued in the names
of the Members in accordance with the Pro Rata Distribution,
in the amounts and as of the dates set forth below (each, a
“Payment Date”):
(i)
One-third
of the Purchase Price Shares shall be issued simultaneously
with the execution of this Agreement by all Parties hereto
(“Closing Purchase Price Shares”);
(ii)
One-third
of the Purchase Price Shares shall be issued on the
three-month anniversary of the Closing Date; and
(iii)
One-third
of the Purchase Price Shares shall be issued on the twelve
month anniversary of the Closing Date.
(c)
The
Purchase Price Shares shall be subject to the Lock-Up
Agreement.
(d)
The
number of Purchase Price Shares issued on a particular Payment
Date shall be calculated by dividing one third of the Purchase
Price by the average closing trading price of a share of
Purchaser’s common stock for the five trading days
immediately prior to such Payment Date (the “Purchase
Price Per Share Denominator”);
provided that, each of the Members acknowledges and agrees, in
no event shall the Purchase Price Per Share Denominator be less
than $.15 regardless of the five-day average closing trading price
of a share of Purchaser’s common stock for the five trading
days immediately prior to such Payment Date
.
If the five-day average closing trading price of a share of
Purchaser’s common stock for any Payment Date is less than
$.15, then the Purchase Price Per Share Denominator shall be $.15.
In connection herewith, the Members acknowledge and agree that
although Purchaser will direct its transfer agent within two
business days of a particular Payment Date to prepare and deliver
to the Members the stock certificates evidencing the Purchase Price
Shares, the actual date of delivery of the stock certificates to
Members is in the transfer agent’s control and it shall not a
be a breach of this Agreement that such stock certificates are not
delivered to Members on the particular Payment Date so long as
Purchaser directs the transfer agent to issue such stock
certificates within two business days of the particular Payment
Date. .
2.2
Earn-Out .
(a)
In
addition to the Purchase Price Shares, the Members shall be
entitled to the issuance of up to an additional $600,000 in
shares of common stock of the Purchaser (the “Earn Out
Shares”) during the 18 month period following the
Closing Date (the “Earn Out Period”) based on the
gross revenues of the Company derived from the exploitation of
the content licensed pursuant to the Licensing Agreements
(defined below) as well as the eBooks (collectively, the
“Earn Out Revenues”), as follows (each, an
“Earn Out Date”):
(i)
$150,000
in Earn Out Shares if and when the monthly Earn Out Revenues
for two consecutive calendar months during the Earn Out
Period, equal or exceed $50,000, plus
(ii)
$150,000
in Earn Out Shares if and when the monthly Earn Out Revenues
for two consecutive calendar months during the Earn Out Period
equal or exceed $100,000, plus
(iii)
$150,000
in Earn Out Shares if and when the monthly Earn Out Revenues
for two consecutive calendar months during the Earn Out Period
equal or exceed $200,000, and plus
(iv)
$150,000
in Earn Out Shares if and when the monthly Earn Out Revenues
for two consecutive calendar months during the Earn Out Period
equal or exceed $250,000.
(b)
The
Earn Out Shares, if any, shall be allocated among the Members,
and issued in the names of the Members, in accordance with the
Pro Rata Distribution.
(c)
The
number of Earn Out Shares issued on a particular Earn Out Date
shall be calculated by dividing $150,000 by the average
closing trading price of a share of Purchaser’s common
stock for the five trading days immediately prior to such Earn
Out Date (the “Earn Out Per Share Denominator”);
provided that, each of the Members acknowledges and agrees, in
no event shall the Earn Out Per Share Denominator be less than
$.15 five-day average closing trading price of a share of
Purchaser’s common stock for the five trading days
immediately prior to such Earn Out Date. If the five-day
average closing trading price of a share for any Earn Out Date
is less than $.15, then the Purchase Price Per Share
Denominator shall be $.15. In connection herewith, the Members
acknowledge and agree that calculation of the monthly gross
revenues for purposes of determining whether any Earn Out
Shares are issuable shall occur within 15 days of the end of
each calendar month during the Earn Out Period and the
direction to the transfer agent to issue the stock
certificates evidencing the Earn Out Shares, if any, shall not
be made until such calculation is complete. The monthly gross
revenues of the Company for each month within the Earn Out
Period shall be reported to the Members within 15 days after
the end of such month. Each Earn Out Date shall be no later
than the 20th day after the end of the month in which the
Members earned the Earn Out Shares pursuant to subsection
2.2(a) above.
(d)
The
Earn Out Shares payable under subsection 2.2(a) above shall be
calculated in the aggregate (i.e. if the monthly Earn Out
Revenues of the Company during the first two months of the
Earn Out Period equal $100,000, the Members shall be entitled
to $300,000 in Earn Out Shares). Earn Out Share eligibility
shall be calculated for each two-month period during the Earn
Out Period. Notwithstanding anything herein to the contrary,
the Members shall not be entitled to receive more than
$600,000 in aggregate Earn Out Shares, even if the monthly
Earn Out Revenues would otherwise entitle the Members to
additional Earn Out Shares.
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2.3 |
Company Liabilities .
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(a)
Digital Content Licensing Agreements .
Schedule B sets
forth a list of the Company’s Digital Content Licensing
Agreements in effect prior to the Closing Date (the
“Licensing Agreements”). After the Closing, the
Purchaser shall attempt to (i) amend the Licensing Agreements to
eliminate any royalties payable thereunder, or (ii) terminate the
Licensing Agreements without any further liability to the Company.
In connection herewith, Purchaser agrees to consult meaningfully
with Will Lidwell and David Palumbo with respect to negotiating
amendments to the Licensing Agreements. Purchaser agrees not to
continue offering for download content subject to a License
Agreement which has not been amended as set forth in (i) or (ii)
above, unless there is a corresponding integrated sponsorship or
payment by user which fully covers the royalty payable under the
Licensing Agreements.
(b)
Other Company Liabilities .
Except for those specific liabilities of the Company set forth
on
Schedule D attached
hereto (the “Assumed Company Liabilities”), which shall
be assumed by Purchaser, the Company shall remain liable for any
and all other liabilities of the Company of any kind, character or
description, whether known or unknown, actual or contingent,
matured or unmatured, liquidated or unliquidated, disputed or
undisputed, executory, determined, determinable or otherwise,
related to the Company Assets and/or the business of the Company
which liabilities arise out of the operation of the business of the
Company prior to the Closing Date or as a direct result of the sale
of the Membership Interests to Purchaser hereunder (collectively,
the “General Liabilities”), but subject to the
indemnification provisions of Sections 8.1(a) and 8.1(b) hereof.
The Company shall maintain its current general liability insurance
through the Closing Date, until such time as Purchaser determines
that such coverage is no longer necessary, to cover the General
Liabilities.
2.4
Company Assets .
On the Closing Date, the Company shall continue to possess all
right, title and interest in, to and under all the assets,
properties and rights of every nature, kind and description, of the
Company which right, title and interest existed as of May 31, 2008,
whether tangible or intangible, real, personal or mixed, wherever
located and whether or not carried or reflected on the books and
records of the Company, and all goodwill associated therewith (with
the exception of any goodwill possessed individually by the
Members), and which shall include (without limitation) the
following (collectively, the “Company
Assets”):
(a)
All
accounts receivables of the Company, whether or not reflected
on the books and records of the Company as of the Closing
Date;
(b)
the
Licensing Agreements set forth on
Schedule B attached
hereto;
(c)
the
eBooks listed on
Schedule E attached
hereto, including all copyrights and other proprietary rights
therein and the thereto (the “eBooks”);
(d)
the
inventory listed on
Schedule F attached
hereto;
(e)
the
material contracts listed on
Schedule G attached
hereto (the “Material Contracts”);
(f)
the
Domain Names:
(g)
a
database of approximately 200,000 registered
users;
(h)
14
servers;
(j)
United
States Patent Application No. 11/464,154
2.5
Closing Costs; Taxes and Fees Members
shall pay, or cause to be paid, when due all Taxes for which the
Members are or may be liable or that are or may become payable as a
direct result of consummation of the transactions contemplated
hereunder. Each of the Members shall pay any and all income tax
liability attributable to such Member as a result of the sale of
such Member’s Membership Interests. Each Party shall be
responsible for filing its own tax returns and other tax forms of
whatever sort deemed appropriate and necessary by the filing
Party.
3.
The
Closing.
3.1
Closing Date
. The
consummation of the sale and transfer of the Membership Interests
contemplated in this Agreement shall take place at the offices of
Purchase simultaneously with the execution of this Agreement by all
of the Parties (the “
Closing Date ”).
(a)
On
the Closing Date, Members shall execute and deliver to
Purchaser the following:
(i)
certificate
of good standing for the Company, dated not more than thirty
(30) days prior to the Closing Date, from the Secretary of
State of the State of Pennsylvania;
(ii)
a
certificate executed by the Secretary of the Company
certifying, as of the Closing Date, as to a true and complete
copy of the resolutions of the board of directors and members
of the Company authorizing the sale of the Company through a
sale of all of the membership interests;
(iii)
any
certificates or other instruments previously issued to the
Members documenting their Membership Interests, endorsed for
transfer to Purchaser, free and clear of all Encumbrances,
including any necessary assignments from the Members to the
Purchaser;
(iv)
any
and all third party consents required for the valid transfer
of the Membership Interests free and clear of all Encumbrances
as contemplated by this Agreement;
(v)
any
and all third party consents required under any Material
Contracts due to a change in control of the Company which is
triggered by the purchase of the Membership Interests as
contemplated hereunder;
(vi)
the
resignation of all officers and directors of the Company
effective as of the Closing Date (the
“Resignations”);
(vii)
Covenants
Not to Compete executed by each of the Major
Members;
(viii)
the
Lock-Up Agreement;
(ix)
the
Investment Representations;
(x)
satisfactory
proof of the filing and recordation of all Domain Name
Transfer Filings and other instruments required to be recorded
and filed in order to consummate the transfer of control of
the Domain Names to Purchaser free and clear of all
Encumbrances;
(xi)
such
other documents or instruments as Purchaser or its counsel may
reasonably request to demonstrate compliance with the
provisions set forth in this Agreement.
(b)
On
the Closing Date, Purchaser
shall
execute and deliver to the Members the following:
(i)
a
copy of instructions sent by Purchaser to its transfer agent
to issue and deliver stock certificates representing the
Closing Purchase Price Shares; and
(ii)
the
Covenants Not to Compete.
(iii)
the
Lock-Up Agreement.
4.
Representations and Warranties of
Members .
The Members hereby represent and warrant, subject only to the
exceptions disclosed in writing in the disclosure schedule attached
to this Agreement as
Schedule I (the
“
Disclosure Schedule ”),
as of the date hereof, to and for the benefit of Purchaser as
follows:
4.1
Organization, Standing and Power; Capitalization
.
The Company is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of
Pennsylvania and has all requisite power and authority to own,
operate and transfer its properties and assets and to carry on its
business as now being conducted. The Company is duly qualified and
is authorized to do business and is in good standing as a foreign
corporation in each jurisdiction in which the nature of its
activities and of its properties (both owned and leased) makes such
qualification necessary.
4.2
Membership Interests .
The Members collectively own all of the Membership Interests free
and clear of all Encumbrances and there are no other outstanding
equity, ownership or voting interests in the Company or outstanding
options to acquire any equity, ownership or voting interests in the
Company or outstanding securities convertible into any equity,
ownership or voting interests in the Company or any agreements by
the Company or the Members to issue or grant any of the
foregoing.
4.3
Authority and Enforceability .
Each of the Members has the full legal power, capacity and
authority to enter into and execute this Agreement and, to the
extent applicable to such Member, the Ancillary Documents required
to be executed hereunder, and to perform such Member’s
obligations and to consummate the transactions contemplated in this
Agreement in accordance with its terms, including the sale and
transfer to Purchaser of such Member’s Membership Interests.
The execution, delivery and performance of this Agreement and all
of the transactions required hereunder to be performed by the
Members have been duly and validly authorized and approved by all
necessary action by the Members as a class or group, and approval
of the board of directors of the Company has been duly obtained in
accordance with the provisions of the Company’s Restated and
Amended Operating Agreement and any amendments thereto and
applicable law. This Agreement and each Ancillary Document
constitutes the valid and legally binding obligation of the
signatory Members thereto in accordance with their respective
terms, except as the same may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors
generally.
4.4
No Violation, Conflict or Consent .
The execution, delivery and performance of this Agreement by
Members does not, and the consummation of the transactions
contemplated hereby and the compliance with the terms hereof will
not: (a) violate any law, judgment, order, decree, statute,
ordinance, rule or regulation of any governmental subdivision or
agency applicable to Members (“
Governmental Rule ”);
(b) conflict with any provision of the Company’s
organizational documents; (c) violate, conflict with, or result in
or constitute a default under, or result in the termination or
acceleration under, or result in the creation of any Encumbrance
upon, any of the Company Assets or under any of the terms,
conditions or provisions of any contract affecting any of the
Company Assets; or (d) require any consent, approval, order or
authorization of, or the registration, declaration or filing with,
any Governmental Entity or other Person. The Company does not
require the consent of any Person to permit Purchaser to operate
the business of the Company in the manner in which it is presently
being operated. Neither the Company nor any of the Members are
required to give any notice to or obtain any consent from any
Person in connection with the execution and delivery of this
Agreement, the Ancillary Documents or the consummation or
performance of any of the transactions contemplated in this
Agreement or the Ancillary Documents.
4.5
Compliance with the Laws .
The Company is and has been in compliance with all laws applicable
thereto and all Court Orders. Neither the Company nor any of the
Members has received any written notice to the effect that, or
otherwise been advised in writing that, the Company is not in
compliance with any such applicable laws or Court Orders, and none
of the Members is aware of any circumstances that are likely to
result in violations of any of the foregoing.
4.6
Litigation .
There are no Actions or Court Orders pending or threatened against
or by the Company in any court or before any arbitrator, private
alternative dispute resolution system or Governmental Entity, nor
has the Company been charged with, nor is the Company under
investigation with respect to any charge concerning any violation
of any provision of any federal, state or other applicable law,
rule, regulation, ordinance, order, decree or governmental
restriction. The Company is not in default with respect to or
subject to any Court Order, and there are no unsatisfied judgments
against the Company or any consent decrees, writs, restraining
orders, or preliminary or permanent injunctions to the Company or
the Company Assets are subject.
4.7
Absence of Changes .
Since May 31, 2008, there has not been any Material Adverse Change
in the business, financial condition, operations, results of
operations or future prospects of the Company. Without limiting the
generality of the foregoing, and other than as listed in the
Disclosure Schedule, since May 31, 2008
there
has not been any:
(a)
actual
or threatened adverse change in the financial condition,
working capital, Members’ equity, assets, liabilities,
reserves, revenues, income, earnings or results of operation
or governing documents (includin
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