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SAA updates on the Digital Railroad situation posted here

Diablo Management Group DRR Contacts
Information Page:
http://www.diablomanagement.com/announcements/digital-railroad-inc.html
Email: DRRinfo@diablomanagement.com
Tel: 925-373-6721

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Memos from Diablo Management Group DRR Memos

Posted October 31, 2008
by Diablo Management Group

"Thank you for your inquiry regarding Digital Railroad.

Digital Railroad (DRR) retained the Diablo Management Group ( DMG) on October 10, 2008, a nationally recognized crisis management firm to assist in raising operating capital, or if unsuccessful, to terminate business operations. Due to the inability to raise the capital necessary to continue to operate, Digital Railroad ("DRR") ceased operations on October 28, 2008.
DMG has been attempting to keep the servers at DRR up and running for as long as possible. However, given DRR's current cash position, DRR can no longer keep these servers operational. Therefore, as early as midnight EST, October 31, 2008, the DRR website will be closed and the images located on the DRR servers will be inaccessible. We apologize for difficulties that this is creating, however, without additional capital investment, we have no other recourse.

Although DRR has received a letter of intent to purchase some of the assets of the company, all monies that have been received are the property of the senior secured creditor. The cash received will not be adequate to satisfy the claim of this creditor. Therefore DRR lacks the cash necessary to pay any additional claim related to hosting services, payments to photographers, or other payables.

With regard to images in Marketplace that have been downloaded and /or used, and for which the publisher has not already made payment, we will work, with the assistance of photographer associations, to get the photographers paid.

At the same time, please submit a statement for unpaid amounts that may be due to you from DRR by December 1, 2008 to:

Digital Railroad, Inc
c/o Diablo Management Group
1452 N. Vasco Road, #301
Livermore, CA 94551

A status report on financial matters will be sent to all creditors in approximately thirty days. Updates on systems, customer property, and potential asset purchase proposal(s) will be posted as they become available.

Please check the DMG website regularly for updates on DRR."

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Posted October 31, 2008
by Diablo Management Group

"To Digital Railroad Members and Customers;

Digital Railroad (DRR) has been attempting to keep its servers up and running for as long as possible. However, given DRR's current cash position, it can no longer keep these servers operational. Therefore, as early as midnight EST, October 31, 2008, the DRR website will be closed and the images located on the DRR servers will be inaccessible. DRR apologizes for difficulties and inconvenience that this creates, however, without additional capital investment, DRR has no other recourse.

These images will be preserved on the existing hardware in anticipation that at a later date they can be retrieved by their owners.

Digital Railroad has received a letter of intent (LOI) to purchase the assets of DRR, specifically its hardware and application software used to store and retrieve images with the desire to continue providing services to DRR members and customers with as little disruption as possible. The Intellectual Property (IP) stored on these servers and owned by members would in any case be preserved. After the completion of an asset purchase agreement, the acquiring company will contact owners of the images to determine their disposition. The acquiring company will have no right to sell or distribute these images without the owner's prior approval.

The company that has submitted the Letter of Intent is a twenty-year fixture in the industry with ongoing close relationships with the preeminent players in the worldwide information business. It owns a multi-agency digital media marketplace composing more than twenty-five million images, news stories, and video clips which it licenses to five thousand customers who purchase content on a daily basis for insertion into the world's most prominent newspapers, magazines, web sites, and broadcast services.

Please check the Diablo Management website www.diablomanagement.com regularly for updates"

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