-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ExZ6QtHQgG2Fc1GVPjcjNIkx39qbbEnJXZvnhlTlQoRG4M6yFTtykH/0AlqvhkFg +2yWfaA5CUSQ7+g9tkQfdQ== 0000950144-06-002398.txt : 20060316 0000950144-06-002398.hdr.sgml : 20060316 20060316160058 ACCESSION NUMBER: 0000950144-06-002398 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20060315 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Unregistered Sales of Equity Securities ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060316 DATE AS OF CHANGE: 20060316 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOLLYWOOD MEDIA CORP CENTRAL INDEX KEY: 0000912544 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-RETAIL STORES, NEC [5990] IRS NUMBER: 650385686 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14332 FILM NUMBER: 06692013 BUSINESS ADDRESS: STREET 1: 2255 GLADES RD STREET 2: STE 237 W CITY: BOCA RATON STATE: FL ZIP: 33431 BUSINESS PHONE: 5619988000 MAIL ADDRESS: STREET 1: 2255 GLADES RD STREET 2: STE 237 W CITY: BOCA RATON STATE: FL ZIP: 33431 FORMER COMPANY: FORMER CONFORMED NAME: HOLLYWOOD COM INC DATE OF NAME CHANGE: 20000511 FORMER COMPANY: FORMER CONFORMED NAME: BIG ENTERTAINMENT INC DATE OF NAME CHANGE: 19930924 8-K 1 g00273e8vk.htm HOLLYWOOD MEDIA CORP. Hollywood Media Corp.
 

 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 16, 2006 (March 15, 2006)
HOLLYWOOD MEDIA CORP.
 
(Exact Name of Registrant as Specified in its Charter)
         
Florida   1-14332   65-0385686
         
(State or Other Jurisdiction
of Incorporation)
  (Commission File Number)   (I.R.S. Employer
Identification No.)
         
2255 Glades Road, Suite 221A, Boca Raton, Florida   33431
     
(Address of Principal Executive Office)   (Zip Code)
Registrant’s telephone number, including area code (561) 998-8000
Not Applicable
 
(Former Name or Former Address, If Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 


 

SECTION 1 — REGISTRANT’S BUSINESS AND OPERATIONS
Item 1.01 Entry into a Material Definitive Agreement.
     On March 15, 2006, Hollywood Media Corp. (“Hollywood Media”) entered into letter agreements with each of the holders (the “Holders”) of its 8% Senior Unsecured Notes dated November 23, 2005 (the “Notes”) pursuant to which (i) Hollywood Media notified the Holders of its election to extend the maturity of the Notes by six months until May 23, 2007, in accordance with Section 6 of the Notes, and (ii) Hollywood Media and the Holders agreed to amend the Notes in order to set the exercise price per share of the Extension Warrants (as defined below) at $4.29. Prior to this amendment, the exercise price per share of the Extension Warrants was equal to the lesser of (a) the average volume weighted average price of Hollywood Media’s common stock for the twenty trading days immediately preceding November 23, 2006 or (b) $4.29.
     Pursuant to Section 6(b) of the Notes (as amended), Hollywood Media was required, upon its election to extend the maturity of the Notes, to deliver to the Holders additional warrants to purchase an aggregate of 100,000 shares of Hollywood Media’s common stock at an exercise price per share equal to $4.29 (the “Extension Warrants”). Accordingly, the Extension Warrants were issued to the Holders by Hollywood Media on March 15, 2006. The warrant exercise price could increase by specified amounts under certain conditions in the event of a “Change of Control” of Hollywood Media (as defined).
     Pursuant to that certain Registration Rights Agreement, dated as of November 23, 2005 by and among Hollywood Media and each of the Holders, Hollywood Media has agreed to file or amend a registration statement under the Securities Act of 1933 within forty-five days of the issuance of the Extension Warrants to cover resales of shares that may be issued upon exercise of the Extension Warrants.
     The foregoing description of the Notes, the letter agreements and related transactions does not purport to be complete and is qualified in its entirety by reference to (1) the description of the Notes and the Registration Rights Agreement set forth in Item 1.01 of Hollywood Media’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 28, 2005 and to Exhibit 10.3 filed therewith, each of which are incorporated herein by reference, (2) the Registration Rights Agreement filed as Exhibit 4.6 to Hollywood Media’s Registration Statement on Form S-3 (No. 333-130903), which is incorporated herein by reference, (3) each of the Letter Agreements, dated as of March 15, 2006, by and among Hollywood Media and each of the Holders, filed as Exhibit 10.1 to this Current Report on Form 8-K and (4) the form of Extension Warrant filed as Exhibit 10.2 to this Current Report on Form 8-K.
     The consummation of the letter agreements and the issuance of the Extension Warrants thereunder were conducted as a private placement made to accredited investors in a transaction exempt from the registration requirements of the Securities Act of 1933.
SECTION 2 — FINANCIAL INFORMATION
Item 2.02 Results of Operations and Financial Condition.
The following information is furnished pursuant to Item 2.02 of Form 8-K.

2


 

On March 16, 2006, we issued a press release announcing Hollywood Media’s financial results for the 2005 fiscal year, which is furnished herewith as Exhibit 99.1 hereto.
The information in this Item 2.02 of this Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.
SECTION 3 — SECURITIES AND TRADING MARKETS
Item 3.02 Unregistered Sales of Equity Securities.
     The information regarding Hollywood Media’s issuance of the Extension Warrants under the following caption set forth in Item 1.01 above is incorporated by reference.
     The securities described above were issued without registration under the Securities Act of 1933 by reason of the exemption from registration afforded by the provisions of Section 4 (2) thereof and/or Regulation D thereunder, based upon investment representations to Hollywood Media relating thereto.
SECTION 9 — FINANCIAL STATEMENTS AND EXHIBITS
Item 9.01 Financial Statements and Exhibits.
     (c) Exhibits.
The following exhibits are filed in connection with the disclosure pursuant to Item 1.01 of this Form 8-K:
  10.1   Letter Agreements, dated March 15, 2006, by and between Hollywood Media Corp. and each of the following holders of its 8% Senior Unsecured Notes dated November 23, 2005: (a) Bonanza Master Fund Ltd.; (b) JMG Triton Offshore Fund Ltd.; (c) JMG Capital Partners, L.P.; (d) WS Opportunity Fund International, Ltd.; (e) WS Opportunity Fund, L.P.; (f) WS Opportunity Fund (QP), L.P.; (g) SRB Greenway Capital, L.P.; (h) SRB Greenway Offshore Operating Fund, L.P.; and (i) SRB Greenway Capital (QP), L.P.
 
  10.2   Form of Common Stock Purchase Warrant, dated March 15, 2006.
The following exhibit is filed in connection with the disclosure pursuant to Item 2.02 of this Form 8-K:
  99.1   Press Release of Hollywood Media Corp. dated March 16, 2006 (“Hollywood Media Corp. Reports 2005 Financial Results”).

3


 

SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
         
  HOLLYWOOD MEDIA CORP.
 
 
  By:   /s/ Mitchell Rubenstein    
    Mitchell Rubenstein   
    Chief Executive Officer   
 
Date: March 16, 2006

4

EX-10.1 2 g00273exv10w1.htm LETTER AGREEMENTS Letter Agreements
 

EXHIBIT 10.1
[HOLLYWOOD MEDIA CORP. LETTERHEAD]
March 15, 2006
VIA FACSIMILE
Bonanza Master Fund Ltd.
Attn: Brian Ladin, Managing Director
Facsimile: (214) 987-4342
Ladies and Gentlemen:
     Reference is made to the 8% Senior Unsecured Note due November 23, 2006 dated November 23, 2005 (the “Note”) issued by Hollywood Media Corp. (the “Company”) to you. Capitalized terms used but not otherwise defined shall have the meanings ascribed to such terms in the Note.
     Pursuant to the terms of Section 6 of the Note, the Company may extend the Maturity Date for a period not to exceed six months from the original Maturity Date by delivering written notice to the Holder. Upon the execution and delivery of this letter agreement by the Company and the Holder, the Company hereby extends the Maturity Date for a period of six months from the original Maturity Date; the Maturity Date, as so extended, shall be May 23, 2007.
     In addition, pursuant to the terms of Section 6(b) of the Note, the Company must, within three Trading Days of the date hereof, deliver to you an Extension Warrant to purchase 57,143 shares of Company common stock.
     In light of the impossibility of determining the exercise price of the Extension Warrant based on the definition provided in the Note, upon extension of the Maturity Date, the Holder and the Company agree to amend the definition of Extension Warrants contained in the Note to clarify that the exercise price shall be $4.29.
     The Company and the Holder agree as follows:
1. Amendment to Definition of “Extension Warrants”. The definition of “Extension Warrants” in Section 1 of the Note is amended and restated to read as follows:
     ““Extension Warrants” means warrants in the form of the Warrants (i) to purchase 57,143 shares of Common Stock (subject to adjustment for any stock dividend, or subdivision or combination of the Common Stock), (ii) exercisable immediately following the date of issuance thereof, (iii) with an exercise price equal to $4.29 (subject to adjustment for any stock dividend, or subdivision or combination of the Common Stock), and (iv) a term of exercise ending on the same date as that of the Warrants.”
     Except as amended or modified by this letter, all other terms and conditions of the Note shall remain in full force and effect. If the foregoing amendment is acceptable to you, please sign in the space indicated below. This letter may be executed in counterparts.
         
  Sincerely,


HOLLYWOOD MEDIA CORP.
 
 
  By:   /s/ Mitchell Rubenstein    
    Name:   Mitchell Rubenstein   
    Title:   Chairman and Chief Executive Officer   
 
Agreed and Accepted:
BONANZA MASTER FUND LTD.
         
     
  By:   /s/ Brian Ladin    
    Name:   Brian Ladin   
    Title:   Managing Director   
 
2255 Glades Road • Suite 221A • Boca Raton, Florida 33431-7383
Telephone (561) 998-8000 • Fax (561) 998-2974

 


 

[HOLLYWOOD MEDIA CORP. LETTERHEAD]
March 15, 2006
VIA FACSIMILE
JMG Triton Offshore Fund Ltd.
Attn: Jonathan Glaser, Member Manager
Facsimile: (310) 601-2890
Ladies and Gentlemen:
     Reference is made to the 8% Senior Unsecured Note due November 23, 2006 dated November 23, 2005 (the “Note”) issued by Hollywood Media Corp. (the “Company”) to you. Capitalized terms used but not otherwise defined shall have the meanings ascribed to such terms in the Note.
     Pursuant to the terms of Section 6 of the Note, the Company may extend the Maturity Date for a period not to exceed six months from the original Maturity Date by delivering written notice to the Holder. Upon the execution and delivery of this letter agreement by the Company and the Holder, the Company hereby extends the Maturity Date for a period of six months from the original Maturity Date; the Maturity Date, as so extended, shall be May 23, 2007.
     In addition, pursuant to the terms of Section 6(b) of the Note, the Company must, within three Trading Days of the date hereof, deliver to you an Extension Warrant to purchase 14,286 shares of Company common stock.
     In light of the impossibility of determining the exercise price of the Extension Warrant based on the definition provided in the Note, upon extension of the Maturity Date, the Holder and the Company agree to amend the definition of Extension Warrants contained in the Note to clarify that the exercise price shall be $4.29.
     The Company and the Holder agree as follows:
1. Amendment to Definition of “Extension Warrants”. The definition of “Extension Warrants” in Section 1 of the Note is amended and restated to read as follows:
     ““Extension Warrants” means warrants in the form of the Warrants (i) to purchase 14,286 shares of Common Stock (subject to adjustment for any stock dividend, or subdivision or combination of the Common Stock), (ii) exercisable immediately following the date of issuance thereof, (iii) with an exercise price equal to $4.29 (subject to adjustment for any stock dividend, or subdivision or combination of the Common Stock), and (iv) a term of exercise ending on the same date as that of the Warrants.”
     Except as amended or modified by this letter, all other terms and conditions of the Note shall remain in full force and effect. If the foregoing amendment is acceptable to you, please sign in the space indicated below. This letter may be executed in counterparts.
         
  Sincerely,


HOLLYWOOD MEDIA CORP.
 
 
  By:   /s/ Mitchell Rubenstein    
    Name:   Mitchell Rubenstein   
    Title:   Chairman and Chief Executive Officer   
 
Agreed and Accepted:
JMG TRITON OFFSHORE FUND LTD.
         
     
  By:   /s/ Jonathan Glaser    
    Name:   Jonathan Glaser   
    Title:   Managing Member   
 
2255 Glades Road • Suite 221A • Boca Raton, Florida 33431-7383
Telephone (561) 998-8000 • Fax (561) 998-2974

 


 

[HOLLYWOOD MEDIA CORP. LETTERHEAD]
March 15, 2006
VIA FACSIMILE
JMG Capital Partners, L.P.
Attn: Jonathan Glaser, Member Manager
Facsimile: (310) 601-2890
Ladies and Gentlemen:
     Reference is made to the 8% Senior Unsecured Note due November 23, 2006 dated November 23, 2005 (the “Note”) issued by Hollywood Media Corp. (the “Company”) to you. Capitalized terms used but not otherwise defined shall have the meanings ascribed to such terms in the Note.
     Pursuant to the terms of Section 6 of the Note, the Company may extend the Maturity Date for a period not to exceed six months from the original Maturity Date by delivering written notice to the Holder. Upon the execution and delivery of this letter agreement by the Company and the Holder, the Company hereby extends the Maturity Date for a period of six months from the original Maturity Date; the Maturity Date, as so extended, shall be May 23, 2007.
     In addition, pursuant to the terms of Section 6(b) of the Note, the Company must, within three Trading Days of the date hereof, deliver to you an Extension Warrant to purchase 14,286 shares of Company common stock.
     In light of the impossibility of determining the exercise price of the Extension Warrant based on the definition provided in the Note, upon extension of the Maturity Date, the Holder and the Company agree to amend the definition of Extension Warrants contained in the Note to clarify that the exercise price shall be $4.29.
     The Company and the Holder agree as follows:
1. Amendment to Definition of “Extension Warrants”. The definition of “Extension Warrants” in Section 1 of the Note is amended and restated to read as follows:
     ““Extension Warrants” means warrants in the form of the Warrants (i) to purchase 14,286 shares of Common Stock (subject to adjustment for any stock dividend, or subdivision or combination of the Common Stock), (ii) exercisable immediately following the date of issuance thereof, (iii) with an exercise price equal to $4.29 (subject to adjustment for any stock dividend, or subdivision or combination of the Common Stock), and (iv) a term of exercise ending on the same date as that of the Warrants.”
     Except as amended or modified by this letter, all other terms and conditions of the Note shall remain in full force and effect. If the foregoing amendment is acceptable to you, please sign in the space indicated below. This letter may be executed in counterparts.
         
  Sincerely,


HOLLYWOOD MEDIA CORP.
 
 
  By:   /s/ Mitchell Rubenstein    
    Name:   Mitchell Rubenstein   
    Title:   Chairman and Chief Executive Officer   
 
Agreed and Accepted:
JMG CAPITAL PARTNERS, L.P.
         
     
  By:   /s/ Jonathan Glaser    
    Name:   Jonathan Glaser   
    Title:   General Partner   
 
2255 Glades Road • Suite 221A • Boca Raton, Florida 33431-7383
Telephone (561) 998-8000 • Fax (561) 998-2974

 


 

[HOLLYWOOD MEDIA CORP. LETTERHEAD]
March 15, 2006
VIA FACSIMILE
WS Opportunity Fund International, Ltd.
Attn: Patrick Walker, Member
Facsimile: (214) 756-6079
Ladies and Gentlemen:
     Reference is made to the 8% Senior Unsecured Note due November 23, 2006 dated November 23, 2005 (the “Note”) issued by Hollywood Media Corp. (the “Company”) to you. Capitalized terms used but not otherwise defined shall have the meanings ascribed to such terms in the Note.
     Pursuant to the terms of Section 6 of the Note, the Company may extend the Maturity Date for a period not to exceed six months from the original Maturity Date by delivering written notice to the Holder. Upon the execution and delivery of this letter agreement by the Company and the Holder, the Company hereby extends the Maturity Date for a period of six months from the original Maturity Date; the Maturity Date, as so extended, shall be May 23, 2007.
     In addition, pursuant to the terms of Section 6(b) of the Note, the Company must, within three Trading Days of the date hereof, deliver to you an Extension Warrant to purchase 4,713 shares of Company common stock.
     In light of the impossibility of determining the exercise price of the Extension Warrant based on the definition provided in the Note, upon extension of the Maturity Date, the Holder and the Company agree to amend the definition of Extension Warrants contained in the Note to clarify that the exercise price shall be $4.29.
     The Company and the Holder agree as follows:
1. Amendment to Definition of “Extension Warrants”. The definition of “Extension Warrants” in Section 1 of the Note is amended and restated to read as follows:
     ““Extension Warrants” means warrants in the form of the Warrants (i) to purchase 4,713 shares of Common Stock (subject to adjustment for any stock dividend, or subdivision or combination of the Common Stock), (ii) exercisable immediately following the date of issuance thereof, (iii) with an exercise price equal to $4.29 (subject to adjustment for any stock dividend, or subdivision or combination of the Common Stock), and (iv) a term of exercise ending on the same date as that of the Warrants.”
     Except as amended or modified by this letter, all other terms and conditions of the Note shall remain in full force and effect. If the foregoing amendment is acceptable to you, please sign in the space indicated below. This letter may be executed in counterparts.
         
  Sincerely,


HOLLYWOOD MEDIA CORP.
 
 
  By:   /s/ Mitchell Rubenstein    
    Name:   Mitchell Rubenstein   
    Title:   Chairman and Chief Executive Officer   
 
Agreed and Accepted:
WS OPPORTUNITY FUND INTERNATIONAL, LTD.
         
     
  By:   WS Ventures Management, L.P.,    
    as agent and attorney-in-fact   
     
  By:   WSV Management, L.L.C., General Partner    
       
     
  By:   /s/ Patrick P. Walker    
    Patrick Walker, Member   
       
 
2255 Glades Road • Suite 221A • Boca Raton, Florida 33431-7383
Telephone (561) 998-8000 • Fax (561) 998-2974

 


 

[HOLLYWOOD MEDIA CORP. LETTERHEAD]
March 15, 2006
VIA FACSIMILE
WS Opportunity Fund, L.P.
Attn: Patrick Walker, Member
Facsimile: (214) 756-6079
Ladies and Gentlemen:
     Reference is made to the 8% Senior Unsecured Note due November 23, 2006 dated November 23, 2005 (the “Note”) issued by Hollywood Media Corp. (the “Company”) to you. Capitalized terms used but not otherwise defined shall have the meanings ascribed to such terms in the Note.
     Pursuant to the terms of Section 6 of the Note, the Company may extend the Maturity Date for a period not to exceed six months from the original Maturity Date by delivering written notice to the Holder. Upon the execution and delivery of this letter agreement by the Company and the Holder, the Company hereby extends the Maturity Date for a period of six months from the original Maturity Date; the Maturity Date, as so extended, shall be May 23, 2007.
     In addition, pursuant to the terms of Section 6(b) of the Note, the Company must, within three Trading Days of the date hereof, deliver to you an Extension Warrant to purchase 3,424 shares of Company common stock.
     In light of the impossibility of determining the exercise price of the Extension Warrant based on the definition provided in the Note, upon extension of the Maturity Date, the Holder and the Company agree to amend the definition of Extension Warrants contained in the Note to clarify that the exercise price shall be $4.29.
     The Company and the Holder agree as follows:
1. Amendment to Definition of “Extension Warrants”. The definition of “Extension Warrants” in Section 1 of the Note is amended and restated to read as follows:
     ““Extension Warrants” means warrants in the form of the Warrants (i) to purchase 3,424 shares of Common Stock (subject to adjustment for any stock dividend, or subdivision or combination of the Common Stock), (ii) exercisable immediately following the date of issuance thereof, (iii) with an exercise price equal to $4.29 (subject to adjustment for any stock dividend, or subdivision or combination of the Common Stock), and (iv) a term of exercise ending on the same date as that of the Warrants.”
     Except as amended or modified by this letter, all other terms and conditions of the Note shall remain in full force and effect. If the foregoing amendment is acceptable to you, please sign in the space indicated below. This letter may be executed in counterparts.
         
  Sincerely,


HOLLYWOOD MEDIA CORP.
 
 
  By:   /s/ Mitchell Rubenstein    
    Name:   Mitchell Rubenstein   
    Title:   Chairman and Chief Executive Officer   
 
Agreed and Accepted:
WS OPPORTUNITY FUND, L.P.
         
     
  By:   WS Ventures Management, L.P.,
General Partner  
 
       
     
  By:   WSV Management, L.L.C., General Partner    
       
     
  By:   /s/ Patrick P. Walker    
    Patrick Walker, Member   
       
 
2255 Glades Road • Suite 221A • Boca Raton, Florida 33431-7383
Telephone (561) 998-8000 • Fax (561) 998-2974

 


 

[HOLLYWOOD MEDIA CORP. LETTERHEAD]
March 15, 2006
VIA FACSIMILE
WS Opportunity Fund (QP), L.P.
Attn: Patrick Walker, Member
Facsimile: (214) 756-6079
Ladies and Gentlemen:
     Reference is made to the 8% Senior Unsecured Note due November 23, 2006 dated November 23, 2005 (the “Note”) issued by Hollywood Media Corp. (the “Company”) to you. Capitalized terms used but not otherwise defined shall have the meanings ascribed to such terms in the Note.
     Pursuant to the terms of Section 6 of the Note, the Company may extend the Maturity Date for a period not to exceed six months from the original Maturity Date by delivering written notice to the Holder. Upon the execution and delivery of this letter agreement by the Company and the Holder, the Company hereby extends the Maturity Date for a period of six months from the original Maturity Date; the Maturity Date, as so extended, shall be May 23, 2007.
     In addition, pursuant to the terms of Section 6(b) of the Note, the Company must, within three Trading Days of the date hereof, deliver to you an Extension Warrant to purchase 3,291 shares of Company common stock.
     In light of the impossibility of determining the exercise price of the Extension Warrant based on the definition provided in the Note, upon extension of the Maturity Date, the Holder and the Company agree to amend the definition of Extension Warrants contained in the Note to clarify that the exercise price shall be $4.29.
     The Company and the Holder agree as follows:
1. Amendment to Definition of “Extension Warrants”. The definition of “Extension Warrants” in Section 1 of the Note is amended and restated to read as follows:
     ““Extension Warrants” means warrants in the form of the Warrants (i) to purchase 3,291 shares of Common Stock (subject to adjustment for any stock dividend, or subdivision or combination of the Common Stock), (ii) exercisable immediately following the date of issuance thereof, (iii) with an exercise price equal to $4.29 (subject to adjustment for any stock dividend, or subdivision or combination of the Common Stock), and (iv) a term of exercise ending on the same date as that of the Warrants.”
     Except as amended or modified by this letter, all other terms and conditions of the Note shall remain in full force and effect. If the foregoing amendment is acceptable to you, please sign in the space indicated below. This letter may be executed in counterparts.
         
  Sincerely,


HOLLYWOOD MEDIA CORP.
 
 
  By:   /s/ Mitchell Rubenstein    
    Name:   Mitchell Rubenstein   
    Title:   Chairman and Chief Executive Officer   
 
Agreed and Accepted:
WS OPPORTUNITY FUND (QP), L.P.
         
     
  By:   WS Ventures Management, L.P.,
General Partner  
 
       
     
  By:   WSV Management, L.L.C., General Partner    
       
     
  By:   /s/ Patrick P. Walker    
    Patrick P. Walker, Member   
       
 
2255 Glades Road • Suite 221A • Boca Raton, Florida 33431-7383
Telephone (561) 998-8000 • Fax (561) 998-2974

 


 

[HOLLYWOOD MEDIA CORP. LETTERHEAD]
March 15, 2006
VIA FACSIMILE
SRB Greenway Capital, L.P.
Attn: Steven Becker, Member
Facsimile: (214) 756-6079
Ladies and Gentlemen:
     Reference is made to the 8% Senior Unsecured Note due November 23, 2006 dated November 23, 2005 (the “Note”) issued by Hollywood Media Corp. (the “Company”) to you. Capitalized terms used but not otherwise defined shall have the meanings ascribed to such terms in the Note.
     Pursuant to the terms of Section 6 of the Note, the Company may extend the Maturity Date for a period not to exceed six months from the original Maturity Date by delivering written notice to the Holder. Upon the execution and delivery of this letter agreement by the Company and the Holder, the Company hereby extends the Maturity Date for a period of six months from the original Maturity Date; the Maturity Date, as so extended, shall be May 23, 2007.
     In addition, pursuant to the terms of Section 6(b) of the Note, the Company must, within three Trading Days of the date hereof, deliver to you an Extension Warrant to purchase 349 shares of Company common stock.
     In light of the impossibility of determining the exercise price of the Extension Warrant based on the definition provided in the Note, upon extension of the Maturity Date, the Holder and the Company agree to amend the definition of Extension Warrants contained in the Note to clarify that the exercise price shall be $4.29.
     The Company and the Holder agree as follows:
1. Amendment to Definition of “Extension Warrants”. The definition of “Extension Warrants” in Section 1 of the Note is amended and restated to read as follows:
     ““Extension Warrants” means warrants in the form of the Warrants (i) to purchase 349 shares of Common Stock (subject to adjustment for any stock dividend, or subdivision or combination of the Common Stock), (ii) exercisable immediately following the date of issuance thereof, (iii) with an exercise price equal to $4.29 (subject to adjustment for any stock dividend, or subdivision or combination of the Common Stock), and (iv) a term of exercise ending on the same date as that of the Warrants.”
     Except as amended or modified by this letter, all other terms and conditions of the Note shall remain in full force and effect. If the foregoing amendment is acceptable to you, please sign in the space indicated below. This letter may be executed in counterparts.
         
  Sincerely,


HOLLYWOOD MEDIA CORP.
 
 
  By:   /s/ Mitchell Rubenstein    
    Name:   Mitchell Rubenstein   
    Title:   Chairman and Chief Executive Officer   
 
Agreed and Accepted:
SRB GREENWAY CAPITAL, L.P.
         
     
  By:   SRB Management, L.P., General Partner    
       
     
  By:   BC Advisors, L.L.C., General Partner    
       
     
  By:   /s/ Steven R. Becker    
    Steven R. Becker, Member   
       
 
2255 Glades Road • Suite 221A • Boca Raton, Florida 33431-7383
Telephone (561) 998-8000 • Fax (561) 998-2974

 


 

[HOLLYWOOD MEDIA CORP. LETTERHEAD]
March 15, 2006
VIA FACSIMILE
SRB Greenway Offshore Operating Fund, L.P.
Attn: Steven Becker, Member
Facsimile: (214) 756-6079
Ladies and Gentlemen:
     Reference is made to the 8% Senior Unsecured Note due November 23, 2006 dated November 23, 2005 (the “Note”) issued by Hollywood Media Corp. (the “Company”) to you. Capitalized terms used but not otherwise defined shall have the meanings ascribed to such terms in the Note.
     Pursuant to the terms of Section 6 of the Note, the Company may extend the Maturity Date for a period not to exceed six months from the original Maturity Date by delivering written notice to the Holder. Upon the execution and delivery of this letter agreement by the Company and the Holder, the Company hereby extends the Maturity Date for a period of six months from the original Maturity Date; the Maturity Date, as so extended, shall be May 23, 2007.
     In addition, pursuant to the terms of Section 6(b) of the Note, the Company must, within three Trading Days of the date hereof, deliver to you an Extension Warrant to purchase 184 shares of Company common stock.
     In light of the impossibility of determining the exercise price of the Extension Warrant based on the definition provided in the Note, upon extension of the Maturity Date, the Holder and the Company agree to amend the definition of Extension Warrants contained in the Note to clarify that the exercise price shall be $4.29.
     The Company and the Holder agree as follows:
1. Amendment to Definition of “Extension Warrants”. The definition of “Extension Warrants” in Section 1 of the Note is amended and restated to read as follows:
1. Amendment to Definition of “Extension Warrants”. The definition of “Extension Warrants” in Section 1 of the Note is amended and restated to read as follows:
     ““Extension Warrants” means warrants in the form of the Warrants (i) to purchase 184 shares of Common Stock (subject to adjustment for any stock dividend, or subdivision or combination of the Common Stock), (ii) exercisable immediately following the date of issuance thereof, (iii) with an exercise price equal to $4.29 (subject to adjustment for any stock dividend, or subdivision or combination of the Common Stock), and (iv) a term of exercise ending on the same date as that of the Warrants.”
     Except as amended or modified by this letter, all other terms and conditions of the Note shall remain in full force and effect. If the foregoing amendment is acceptable to you, please sign in the space indicated below. This letter may be executed in counterparts.
         
  Sincerely,


HOLLYWOOD MEDIA CORP.
 
 
  By:   /s/ Mitchell Rubenstein    
    Name:   Mitchell Rubenstein   
    Title:   Chairman and Chief Executive Officer   
 
Agreed and Accepted:
SRB GREENWAY OFFSHORE OPERATING FUND, L.P.
         
     
  By:   SRB Management, L.P., General Partner    
       
     
  By:   BC Advisors, L.L.C., General Partner    
       
     
  By:   /s/ Steven R. Becker    
    Steve Becker, Member   
       
 
2255 Glades Road • Suite 221A • Boca Raton, Florida 33431-7383
Telephone (561) 998-8000 • Fax (561) 998-2974

 


 

[HOLLYWOOD MEDIA CORP. LETTERHEAD]
March 15, 2006
VIA FACSIMILE
SRB Greenway Capital (QP), L.P.
Attn: Steven Becker, Member
Facsimile: (214) 756-6079
Ladies and Gentlemen:
     Reference is made to the 8% Senior Unsecured Note due November 23, 2006 dated November 23, 2005 (the “Note”) issued by Hollywood Media Corp. (the “Company”) to you. Capitalized terms used but not otherwise defined shall have the meanings ascribed to such terms in the Note.
     Pursuant to the terms of Section 6 of the Note, the Company may extend the Maturity Date for a period not to exceed six months from the original Maturity Date by delivering written notice to the Holder. Upon the execution and delivery of this letter agreement by the Company and the Holder, the Company hereby extends the Maturity Date for a period of six months from the original Maturity Date; the Maturity Date, as so extended, shall be May 23, 2007.
     In addition, pursuant to the terms of Section 6(b) of the Note, the Company must, within three Trading Days of the date hereof, deliver to you an Extension Warrant to purchase 2,324 shares of Company common stock.
     In light of the impossibility of determining the exercise price of the Extension Warrant based on the definition provided in the Note, upon extension of the Maturity Date, the Holder and the Company agree to amend the definition of Extension Warrants contained in the Note to clarify that the exercise price shall be $4.29.
     The Company and the Holder agree as follows:
1. Amendment to Definition of “Extension Warrants”. The definition of “Extension Warrants” in Section 1 of the Note is amended and restated to read as follows:
     ““Extension Warrants” means warrants in the form of the Warrants (i) to purchase 2,324 shares of Common Stock (subject to adjustment for any stock dividend, or subdivision or combination of the Common Stock), (ii) exercisable immediately following the date of issuance thereof, (iii) with an exercise price equal to $4.29 (subject to adjustment for any stock dividend, or subdivision or combination of the Common Stock), and (iv) a term of exercise ending on the same date as that of the Warrants.”
     Except as amended or modified by this letter, all other terms and conditions of the Note shall remain in full force and effect. If the foregoing amendment is acceptable to you, please sign in the space indicated below. This letter may be executed in counterparts.
         
  Sincerely,


HOLLYWOOD MEDIA CORP.
 
 
  By:   /s/ Mitchell Rubenstein    
    Name:   Mitchell Rubenstein   
    Title:   Chairman and Chief Executive Officer   
 
Agreed and Accepted:
SRB GREENWAY CAPITAL (QP), L.P.
         
     
  By:   SRB Management, L.P., General Partner    
       
     
  By:   BC Advisors, L.L.C., General Partner    
       
     
  By:   /s/ Steven R. Becker    
    Steven R. Becker, Member   
       
 
2255 Glades Road • Suite 221A • Boca Raton, Florida 33431-7383
Telephone (561) 998-8000 • Fax (561) 998-2974

 

EX-10.2 3 g00273exv10w2.htm FORM OF COMMON STOCK PURCHASE WARRANT Form of Common Stock Purchase Warrant
 

EXHIBIT 10.2
EXECUTION VERSION
NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES REGULATORS OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE, NOR MAY ANY INTEREST THEREIN BE, OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY, SUBJECT TO CERTAIN EXCEPTIONS, A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, IN FORM AND SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES IN ACCORDANCE WITH APPLICABLE LAWS.
HOLLYWOOD MEDIA CORP.
FORM OF COMMON STOCK PURCHASE WARRANT
 
Warrant No. ___   Date of Original Issuance: March 15, 2006
     Hollywood Media Corp., a Florida corporation (together with any entity that shall succeed to or assume the obligations of Hollywood Media Corp. hereunder, the “Company"), hereby certifies that, for value received, ____________or its registered assigns (the “Holder"), is entitled to purchase from the Company up to a total of ___shares of common stock, par value $.01 per share (the “Common Stock"), of the Company (each such share, a “Warrant Share” and all such shares, the “Warrant Shares") at an exercise price equal to $4.29 per share (as adjusted from time to time as provided in Section 9, the “Exercise Price"), at any time and from time to time from and after the date hereof and through and including November 22, 2010 (the “Expiration Date"), and subject to the following terms and conditions:
     1. Definitions. In addition to the terms defined elsewhere in this Warrant, capitalized terms that are not otherwise defined herein shall have the meanings given to such terms in the Note Purchase Agreement dated November 22, 2005 to which the Company and the original Holder are parties (the “Purchase Agreement"). The term “Common Stock” shall include the Company’s common stock, par value $.01 per share as authorized on the date of the Purchase Agreement and any other securities or property of the Company or of any other person

 


 

(corporate or otherwise) which the Holder at any time shall be entitled to receive on the exercise hereof in lieu of or in addition to such common stock, or which at any time shall be issuable in exchange for or in replacement of such common stock.
     2. Holder of Warrant. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register"), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary from the transferee and transferor.
     3. Recording of Transfers. Subject to Section 6, the Company shall register the transfer of any portion of this Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of Assignment attached hereto duly completed and signed, to the Company at its address specified herein. As a condition to the transfer, the Company may request a legal opinion as contemplated by the legend above and related terms of the Purchase Agreement. Upon any such registration or transfer, a new Warrant to purchase Common Stock, in substantially the form of this Warrant (any such new Warrant, a “New Warrant"), evidencing the portion of this Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations of a holder of a Warrant.
     4. Exercise and Duration of Warrants. This Warrant shall be exercisable by the registered Holder in whole or in part at any time and from time to time on or after the date hereof to and including the Expiration Date by delivery to the Company of a duly executed facsimile copy of the Exercise Notice form annexed hereto (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of such Holder appearing on the books of the Company). At 6:30 p.m., New York City time on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value. The Company may not call or redeem all or any portion of this Warrant without the prior written consent of the Holder. If at any time (i) this Warrant is exercised after one year from the date of issuance of this Warrant but before the Expiration Date and (ii) during the Trading Day period immediately preceding the holder’s delivery of an Exercise Notice in respect of such exercise, a Registration Statement (as defined in the Registration Rights Agreement) covering the Warrant Shares that are the subject of the Exercise Notice (the “Unavailable Warrant Shares”) is not available for the resale of such Unavailable Warrant Shares, the holder of this Warrant also may exercise this Warrant as to any or all of such Unavailable Warrant Shares and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the aggregate Exercise Price, elect instead to receive upon such exercise a reduced number of shares of Common Stock (the “Net Number”) determined according to the following formula (a “Cashless Exercise”):
Net Number = (A x B) – (A x C)
———————
B

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For purposes of the foregoing formula:
A = the total number of shares with respect to which this Warrant is then being exercised in a Cashless Exercise.
B = the VWAP on the Trading Day immediately preceding the date of the Exercise Notice.
C = the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.
VWAP = For any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price per share of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern Time); (b) if the Common Stock is not then listed or quoted on a Trading Market and if prices for the Common Stock are then quoted on the OTC Bulletin Board, the volume weighted average price per share of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board; (c) if the Common Stock is not then listed or quoted on the OTC Bulletin Board and if prices for the Common Stock are then reported in the “Pink Sheets” published by the Pink Sheets, LLC (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported; or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company.
There cannot be a Cashless Exercise unless “B” exceeds “C”.
     5. Delivery of Warrant Shares.
          (a) To effect exercises hereunder, the Holder shall not be required to physically surrender this Warrant upon exercise unless this Warrant ceases to be further exercisable for additional Warrant Shares. Upon delivery of the Exercise Notice to the Company (with the attached Warrant Shares Exercise Log) at its address for notice set forth herein and upon payment of the Exercise Price multiplied by the number of Warrant Shares that the Holder intends to purchase hereunder, the Company shall promptly (but in no event later than three Trading Days after the Date of Exercise (as defined herein)) issue and deliver to the Holder, a certificate for the Warrant Shares issuable upon such exercise, which, unless otherwise required by the Purchase Agreement, shall be free of restrictive legends. A “Date of Exercise” means the date on which the Holder shall have delivered to Company: (i) the Exercise Notice (with the Warrant Exercise Log attached to it), appropriately completed and duly signed and (ii) except in the case of a Cashless Exercise, payment in full of the Exercise Price in immediately available funds or federal funds for the number of Warrant Shares so indicated by the Holder to be purchased.

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          (b) If by the third Trading Day after a Date of Exercise the Company fails to deliver the required number of Warrant Shares in the manner required pursuant to Section 5(a), then the Holder will have the right to rescind such exercise.
          (c) If by the third Trading Day after a Date of Exercise the Company fails to deliver the required number of Warrant Shares in the manner required pursuant to Section 5(a), and if after such third Trading Day and prior to the receipt of such Warrant Shares, the Holder purchases in a bona fide arm’s length transaction for fair market value (in an open market transaction or otherwise) the number of shares of Common Stock necessary to deliver in satisfaction of a bona fide arm’s length sale for fair market value by the Holder of the Warrant Shares which the Holder was entitled to receive upon such exercise (a “Buy-In”), then the Company shall (1) pay in cash to the Holder the amount by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the Holder’s total sales price (including brokerage commissions, if any) for the shares of Common Stock so sold and (2) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. The Holder shall provide the Company written notice and reasonably detailed documentation indicating the amounts requested by the Holder in respect of the Buy-In.
          (d) The Company’s obligations to issue and deliver Warrant Shares in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of Warrant Shares. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.
     6. Charges, Taxes and Expenses. Issuance and delivery of certificates for shares of Common Stock upon exercise of this Warrant shall be made without charge to the Holder for any issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or Warrants in a name other than that of the Holder. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.
     7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon

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cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and ownership thereof and customary and reasonable indemnity. Applicants for a New Warrant under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable third-party costs as the Company may prescribe. If a New Warrant is requested as a result of a mutilation of this Warrant, then the Holder shall deliver such mutilated Warrant to the Company as a condition precedent to the Company’s obligation to issue the New Warrant.
     8. Reservation of Warrant Shares. The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other contingent purchase rights of persons other than the Holder (taking into account the adjustments and restrictions of Section 9). The Company covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable.
     9. Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 9.
          (a) Stock Dividends and Splits, Recapitalizations, Etc. If the Company, at any time while this Warrant is outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock or subdivides the outstanding shares of Common Stock into a larger number of shares (by any stock split, recapitalization or otherwise), then in each such case the Exercise Price shall be proportionately reduced and the number of Warrant Shares shall be proportionately increased, and (ii) combines outstanding shares of Common Stock into a smaller number of shares (by reverse stock split, recapitalization, or otherwise), then in each such case the Exercise Price shall be proportionately increased and the number of Warrant Shares shall be proportionately decreased. Any adjustment made pursuant to clauses (i) and (ii) of this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution or immediately after the effective date of such subdivision or combination (as the case may be). If any event requiring an adjustment under this paragraph occurs during the period that an Exercise Price is calculated hereunder, then the calculation of such Exercise Price shall be adjusted appropriately to reflect such event.
          (b) Pro Rata Distributions. If the Company, at any time while this Warrant is outstanding, distributes to all holders of Common Stock (i) evidences of its indebtedness, (ii) any security (other than a distribution of Common Stock covered by the preceding paragraph), (iii) rights or warrants to subscribe for or purchase any security, or (iv) any other asset (in each case, “Distributed Property”), then in each such case the Exercise Price shall be appropriately adjusted. Any adjustment made pursuant to this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such distribution. If

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any event requiring an adjustment under this paragraph occurs during the period that an Exercise Price is calculated hereunder, then the calculation of such Exercise Price shall be adjusted appropriately to reflect such event.
          (c) Fundamental Transactions.
               (i) If, at any time while this Warrant is outstanding, (1) the Company effects any merger or consolidation of the Company with or into another Person, (2) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (3) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (4) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a “Fundamental Transaction”), then the Holder shall have the right thereafter to receive, upon exercise of this Warrant, the same amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the number of Warrant Shares then issuable upon exercise in full of this Warrant (the “Alternate Consideration”). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. At the Holder’s option and request, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new warrant substantially in the form of this Warrant and consistent with the foregoing provisions and evidencing the Holder’s right to purchase the Alternate Consideration for the aggregate Exercise Price upon exercise thereof. Any such successor or surviving entity shall be deemed to be required to comply with the provisions of this paragraph (c) and shall insure that the Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.
               (ii) Notwithstanding subsection (i) above, if on or before the 120th day following the date of this Warrant the Company enters into a definitive agreement (provided that such agreement can be subject to customary closing conditions, such as receipt of shareholder approval) for a Fundamental Transaction that constitutes a Change of Control (as defined below) and the price per share of Common Stock for purposes of such Change of Control transaction is (A) between $6.00 and $6.99 per share (as adjusted for any stock splits, dividends, or combinations), then the Exercise Price shall be adjusted immediately to be equal to 110% of the Exercise Price in effect immediately before entry into such definitive agreement and (B) at least $7.00 per share (as adjusted for any stock splits, dividends, or combinations), then the Exercise Price shall be adjusted immediately to be equal to 115% of the Exercise Price in effect immediately before entry into such definitive agreement; provided, however that if such

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definitive agreement subsequently is terminated without consummating such of Change of Control transaction, then the Exercise Price as adjusted as a result of entering into such definitive agreement shall be readjusted to the Exercise Price in effect immediately before entry into such definitive agreement.
(iii) “Change of Control” means any of the following events:
a) the consolidation, merger, or other business combination (including, without limitation, a reorganization or recapitalization) of the Company with or into another Person (other than (A) any such transaction in which holders of the Company’s voting power immediately prior to the transaction continue after the transaction to hold, directly or indirectly, the voting power of the surviving entity or entities necessary to elect a majority of the members of the board of directors (or their equivalent if other than a corporation) of such entity or entities, or (B) pursuant to a merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company);
b) the sale or transfer of all or substantially all of the Company’s assets; or
c) a purchase, tender, or exchange offer made to and accepted by the holders of more than the 50% of the outstanding shares of Common Stock.
          (d) Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to paragraph (a) of this Section, the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment.
          (e) Calculations. All calculations under this Section 9 shall be made to the nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.
          (f) Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this Section 9, the Company at its expense will promptly compute such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or type of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable), describing the transactions giving rise to such adjustments and showing in detail the facts upon which such adjustment is based. Upon written request, the Company will promptly deliver a copy of each such certificate to the Holder and to the Company’s Transfer Agent. No adjustment in the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least 1% in such rate; provided, however, that any adjustments which by reason of this Section 9(f) are not required to be made shall be carried forward and taken into account in any subsequent adjustment.

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          (g) Notice of Corporate Events. If the Company (i) declares a dividend or any other distribution of cash, securities or other property in respect of its Common Stock, including without limitation any granting of rights or warrants to subscribe for or purchase any capital stock of the Company or any Subsidiary, (ii) authorizes or approves, enters into any agreement contemplating or solicits stockholder approval for any Fundamental Transaction or (iii) authorizes the voluntary dissolution, liquidation or winding up of the affairs of the Company, then the Company shall deliver to the Holder a notice describing the material terms and conditions of such transaction, at least five calendar days prior to the applicable record or effective date on which a Person would need to hold Common Stock in order to participate in or vote with respect to such transaction, and the Company will take all steps reasonably necessary in order to insure that the Holder is given the practical opportunity to exercise this Warrant prior to such time so as to participate in or vote with respect to such transaction; provided, however, that the failure to deliver such notice or any defect therein shall not affect the validity of the corporate action required to be described in such notice.
     10. Payment of Exercise Price. Upon exercise of this Warrant the Holder shall pay the Exercise Price in immediately available funds unless it is a Cashless Exercise in accordance with Section 4 hereof.
     11. No Fractional Shares. No fractional shares of Warrant Shares will be issued in connection with any exercise of this Warrant. In lieu of any fractional shares which would otherwise be issuable, the Company shall pay cash equal to the product of such fraction multiplied by the closing price of one Warrant Share as reported by Bloomberg L.P. (or the successor to its function of reporting share prices) on the date of exercise.
     12. Notices. Any and all notices or other communications or deliveries hereunder (including, without limitation, any Exercise Notice) shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section prior to 6:30 p.m. (New York City time) on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day, (iii) the Trading Day following the date of mailing, if sent and delivered by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be: (i) if to the Company, to Hollywood Media Corp., 2255 Glades Road, #221A, Boca Raton, Florida 33431. Attn: Chief Accounting Officer with a copy to the legal department, Facsimile No.: (561) 998-2974, or (ii) if to the Holder, to the address or facsimile number appearing on the Warrant Register or such other address or facsimile number as the Holder may provide to the Company in accordance with this Section.
     13. Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon 30 days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any

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corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a successor warrant agent under this Warrant without any further act. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register.
     14. Miscellaneous.
          (a) This Warrant shall be binding on and inure to the benefit of the parties hereto and the respective successors and assigns of the Holder it being understood that transfers of this Warrant by the Holder are subject to the legend set forth of the face hereof. Subject to the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant. This Warrant may be amended only in writing signed by the Company and the Holder and their successors and assigns.
          (b) All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings to resolve any dispute concerning the interpretations, enforcement and defense of this Warrant and the transactions herein contemplated (“Proceedings”) (whether brought against a party hereto or its respective Affiliates, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”), although depositions may be taken in other locations. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any New York Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Warrant or the transactions contemplated hereby. If either party shall commence a Proceeding to enforce any provisions of this Warrant, then the prevailing party in such Proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding.
          (c) The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof.

-9-


 

          (d) In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant.
          (e) The Company will not, by amendment of its Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holder of this Warrant against such impairment.
          (f) This Warrant does not entitle the Holder to any voting rights or other rights as a shareholder of the Company prior to the exercise hereof. In connection with an exercise of this Warrant in accordance with the terms hereof, upon the surrender of this Warrant and the payment of the aggregate Exercise Price (or by means of a Cashless Exercise if permitted hereunder), the Warrant Shares so purchased shall be and be deemed to be issued to such Holder as the record owner of such shares as of the close of business on the later of the date of such surrender or payment.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
SIGNATURE PAGE FOLLOWS]

-10-


 

     IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as of the date first indicated above.
         
  HOLLYWOOD MEDIA CORP.
 
 
  By:      
    Name:   Mitchell Rubenstein   
    Title:   Chairman and Chief Executive Officer   

-11-


 

         
EXERCISE NOTICE
To Hollywood Media Corp.
     The undersigned hereby irrevocably elects to purchase ___shares of common stock, par value $.01 per share, of Hollywood Media Corp. (“Common Stock”), pursuant to Warrant No. ___, originally issued March 15, 2006 (the “Warrant”), and, if not a Cashless Exercise in accordance with Section 4, encloses herewith $___in cash, federal funds or other immediately available funds, which sum represents the aggregate Exercise Price (as defined in the Warrant) for the number of shares of Common Stock to which this Exercise Notice relates, together with any applicable taxes payable by the undersigned pursuant to the Warrant.
     The undersigned requests that certificates for the shares of Common Stock issuable upon this exercise be issued in the name of
         
  Print Name of Holder: _____________________


Signature: ________________________
Name:
Title:

HOLDER’S SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER:

_________________________________



Holder’s Address:


_________________________________

_________________________________


_________________________________
 
 
     
     
     


 

         
Warrant Shares Exercise Log
                       
 
        Number of Warrant           Number of Warrant  
        Shares Available to     Number of Warrant     Shares Remaining to  
  Date     be Exercised     Shares Exercised     be Exercised  
 
 
                   
 
 
                   
 
 
                   
 
 
                   
 
 
                   
 
 
                   
 
 
                   
 
 
                   
 
 
                   
 


 

FORM OF ASSIGNMENT
[To be completed and signed only upon transfer of Warrant]
     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto _________ the right represented by the within Warrant to purchase ___ shares of Common Stock of Hollywood Media Corp., Inc. to which the within Warrant relates and appoints _________ attorney to transfer said right on the books of the Company with full power of substitution in the premises.
Dated: _______________, ____
         
  _______________________________________
(Signature must conform in all respects to name of
holder as specified on the face of the Warrant)


_______________________________________
Address of Transferee


_______________________________________


_______________________________________


Tax Identification Number or Social Security
Number of Transferee


_______________________________________
 
 
     
     
     
 
In the presence of:
__________________________

EX-99.1 4 g00273exv99w1.htm PRESS RELEASE Press Release
 

Exhibit 99.1
(Hollywood Media Corp. Logo)
HOLLYWOOD MEDIA CORP. REPORTS 2005 FINANCIAL RESULTS
  Fourth Quarter 2005 Revenues Increased 20.3% while Net Loss decreased 63.7% vs. Fourth Quarter 2004
 
  Full Year 2005 Revenues Increased 31.0% while Net Loss decreased 23.2% vs. 2004
 
  Fourth Quarter 2005 $0.04 Loss Per Share Improves 65.8% vs. Fourth Quarter 2004 $0.13 Loss Per Share
 
  Broadway Ticketing Deferred Revenue as of 12-31-05 up 53.5% over 12-31-04
(Boca Raton, FL — March 16, 2006) — Hollywood Media Corp. (Nasdaq: HOLL), a leading provider of news, information and ticketing covering the entertainment and media industries, today announced financial results for the fourth quarter and twelve months ended December 31, 2005.
FOURTH QUARTER FINANCIAL RESULTS
Hollywood Media’s net revenues for the three months ended December 31, 2005 increased 20.3 percent to $28.5 million compared to $23.7 million for the fourth quarter of 2004, and increased 36.4 percent sequentially compared to $20.9 million for the third quarter of 2005. The net loss for the fourth quarter of 2005 decreased by 63.7 percent to $1.4 million, as compared to the net loss of $3.9 million in the fourth quarter of 2004. Total operating expenses (which include cost of revenues — ticketing; editorial, production, development and technology expenses; selling, general and administrative expenses; salaries and benefits; and depreciation and amortization expenses) for the fourth quarter of 2005 increased 7.7 percent to $29.6 million compared to $27.5 million for the fourth quarter of 2004. The fourth quarter loss included the following expenses: depreciation and amortization of $0.5 million, net interest of $0.4 million, noncash compensation of $0.2 million, and approximately $0.1 million spent on the continued roll-out of Hollywood.com Television.
Selling, general and administrative expenses for the fourth quarter of 2005 decreased 18.9 percent to $3.4 million compared to $4.2 million for the fourth quarter of 2004, as cost reduction initiatives helped to reduce expenses, particularly related to reduced audit fees and Sarbanes-Oxley compliance expenses.
The fourth quarter 2005 net loss was $0.04 per fully diluted share based on 32.0 million weighted average shares outstanding during the period, representing a 65.8 percent improvement on a per share basis over the fourth quarter 2004 net loss of $0.13 per fully diluted share, based on 30.2 million weighted average shares outstanding during the 2004 period.
Hollywood Media completed the fourth quarter of 2005 with $7.1 million in cash and cash equivalents and $4.2 million of net accounts receivable, compared to cash and cash equivalents of $6.3 million and net accounts receivable of $2.0 million at December 31, 2004.


 

 

HOLLYWOOD MEDIA CORP. REPORTS 2005 FINANCIAL RESULTS Page 2
Mitchell Rubenstein, Hollywood Media’s Chief Executive Officer, commented, “We have achieved another record quarter from a revenue perspective, while significantly narrowing our net loss. Deferred revenue in our Broadway Ticketing division, typically a leading indicator of future ticketing revenue, was up substantially year-over-year, as many consumers purchased tickets for future events. We finished the year with $16.5 million in deferred ticketing revenue, up 53.5 percent compared to the $11.4 million reported for December 31, 2004.”
FULL YEAR FINANCIAL RESULTS
For the year ended December 31, 2005, net revenues increased 31.0 percent to $95.6 million compared to $73.0 million for 2004. The net loss for 2005 decreased by 23.2 percent to $8.9 million, as compared to the net loss of $11.6 million in 2004. Total operating expenses for 2005 increased 26.0 percent to $104.5 million compared to $82.9 million for 2004.
The net loss for the year ended December 31, 2005 was $0.28 per fully diluted share based on 31.5 million weighted average shares outstanding during the year, representing a 32.1 percent improvement on a per share basis over the 2004 net loss of $0.42 per fully diluted share, based on 27.8 million weighted average shares outstanding during 2004.
“We are pleased with our increase in revenues and the decline in net loss in 2005,” Mr. Rubenstein continued. “We are also continuing with incremental implementation of our efficiency initiatives including offshore outsourcing intended to control various expenses, and the 2005 financial results showed further progress towards achieving future profitability. The revenue trends across our three largest business segments were very positive in 2005, and we are poised for what we expect to be another record year in 2006.”
SEGMENT HIGHLIGHTS
Broadway Ticketing
Broadway Ticketing revenue during the fourth quarter of 2005 was $23.6 million, a 17.4 percent increase compared to $20.1 million in the fourth quarter of 2004 and a 39.2 percent sequential increase compared to $16.9 million in the third quarter of 2005. For the full year 2005, revenues in this division were $78.9 million, up 32.2 percent from the $59.7 million in 2004. The division had a gross margin of 14.4 percent for fiscal 2005 as compared to gross margin of 13.3 percent for 2004.
Deferred revenue relating to Broadway Ticketing, a leading indicator of future Broadway Ticketing revenues, was $16.5 million as of December 31, 2005, up 53.5% compared to $10.8 million as of December 31, 2004 and up 16.3% sequentially compared to the $14.2 million as of September 30, 2005.
Mr. Rubenstein continued, “We successfully launched Theatre.com in London during December 2005 and commenced ticket sales on the site in March 2006. Based on our review of the London market for live theatre shows, we believe that this market presents an exciting growth opportunity for Hollywood Media. Preliminary results have been very encouraging.”


 

HOLLYWOOD MEDIA CORP. REPORTS 2005 FINANCIAL RESULTS Page 3
The Broadway Ticketing financial results include adjustments to decrease revenue and to decrease cost of revenues-ticketing by approximately $5.7 million for the first three quarters of 2005, primarily due to the correction of an error in the method previously used to record hotel package revenues in the Broadway Ticketing division. These adjustments did not impact the amount of loss previously reported for 2005 periods.
Data Business
The Data Business revenues were $2.7 million for the fourth quarter of 2005, an increase of 17.1 percent compared to $2.3 million in revenues for the fourth quarter of 2004. For the full year 2005, revenues in this division were $10.6 million, up 32.9 percent from $8.0 million in 2004. The increase in Data Business revenue from fiscal 2004 to fiscal 2005 was attributable primarily to the July 2004 acquisition of Studio Systems, Inc., and increases in revenues from our Source and Baseline businesses due to internal growth through adding new customers and increased sales to existing customers.
Internet Advertising Sales
Revenues in the Internet Advertising Sales Division for the fourth quarter of 2005 were $1.8 million, an increase of 133.0 percent compared to the $0.8 million in revenues for the fourth quarter of 2004. Revenues in the Internet Advertising Sales Division for the full year 2005 were $4.5 million, an increase of 60.3 percent compared to the $2.8 in revenues for fiscal 2004. For January 2006, ComScore Media Metrix reported that Hollywood.com had 11.1 million global unique users.
Hollywood.com Television
“We reached our subscriber goal for 2005 and are pleased to report that Hollywood.com Television, our free-VOD (FVOD) cable network, is now accessible by more than 15 million cable TV subscribers, up from approximately 8 million subscribers with access at the beginning of 2005, and we expect to surpass 20 million subscribers during 2006,” Mr. Rubenstein continued. “As of the end of 2005, we estimate Hollywood.com Television was available to approximately 70 percent of all U.S. cable FVOD-enabled subscribers through our MSO partners. We recognized initial advertising revenues in the fourth quarter of 2005 and expect to increase these sales during 2006. We note that Neilson has announced plans to begin its rating system to measure FVOD viewers this year, and we expect this new market data will facilitate advertiser interest. We continue to view Hollywood.com Television as a complementary component to our business, although still in the early stage, and we remain confident that the foundation we have established positions us to capitalize on incremental growth as this industry continues to evolve.”
Intellectual Properties
Hollywood Media’s Intellectual Properties division had revenues of $1.6 million for the year 2005, a decrease of 37.6 percent from the $2.5 million revenues for fiscal 2004.
MOVIETICKETS.COM
“On March 14, 2006, MovieTickets.com announced that it has been selected by Yahoo! Movies as its exclusive online movie ticketing service, another milestone for MovieTickets.com, in which Hollywood Media has a 26.2 percent equity interest,” stated Mr. Rubenstein. “MovieTickets.com has agreements to


 

HOLLYWOOD MEDIA CORP. REPORTS 2005 FINANCIAL RESULTS Page 4
provide online movie ticketing on an exclusive basis for over 70 exhibitors, up from approximately 30 exhibitors at the end of 2004.”
Audit Not Completed
The financial results in this press release including the attached financial tables are unaudited and should be considered preliminary. These financial results are subject to the completion of the annual audit of Hollywood Media’s financial statements by its independent registered public accounting firm and the filing of Hollywood Media’s Form 10-K report for 2005 containing its audited financial statements. We can provide no assurance that these results will not be subject to adjustment upon completion of the audit.
Teleconference Information
Management will host a teleconference today, March 16th, at 4:30 p.m. Eastern Time to discuss Hollywood Media’s 2005 fourth quarter and year end financial results. To access the teleconference, please dial 800-275-3939 if calling within the United States or 973-409-9258 if calling internationally approximately five minutes prior to the start of the call. The teleconference will also be available via live webcast on the investor relations portion of Hollywood Media’s website, located at http://www.hollywood.com/about_us/. Following prepared remarks, management will take questions from the audience via phone and e-mail. To ask a question via e-mail, please send your questions to questions@exec.hollywood.com in advance of, or during, the live call. If you are unable to listen to the live teleconference at its scheduled time, there will be a replay available through March 23, 2006 and can be accessed by dialing 877-519-4471 (U.S.), 973-341-3080 (Int’l), passcode 7144426. A replay of the teleconference will also be archived for a longer period on the investor relations portion of Hollywood Media’s web site.
About Hollywood Media Corp.
Hollywood Media Corp. is a leading provider of news, information and ticketing covering the entertainment and media industries. On the strength of its history in developing comprehensive entertainment industry databases, as well as its major strategic partners and unique content, Hollywood Media has launched a network of media businesses. Hollywood Media’s Data Business includes CinemaSource, EventSource, ExhibitorAds, CinemasOnline, and Baseline/StudioSystems. Hollywood Media’s Broadway Ticketing business includes Broadway.com, 1-800-Broadway, Theatre Direct International, and Theatre.com. These services supply media outlets with specific information on entertainment events, such as movies, live theater and concerts, and sell tickets for live theater. Hollywood Media’s businesses also include an intellectual property business, as well as Hollywood.com and a minority interest in MovieTickets.com. In addition, Hollywood Media owns and operates the cable television network, Hollywood.com Television.
Statements in this press release may be “forward-looking statements” within the meaning of federal securities laws. The matters discussed herein that are forward-looking statements are based on current management expectations that involve risks and uncertainties that may result in such expectations not being realized. Actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous potential risks and uncertainties including, but not limited to, the need to manage our growth and integrate new businesses, our ability to realize anticipated revenues and cost efficiencies, our ability to develop strategic relationships, our ability to compete with other media, data and Internet companies, technology risks, the volatility of our stock price, and other risks and factors described in Hollywood Media Corp.’s filings with the Securities and Exchange Commission including our Form 10-K for 2004, as amended. Such forward-looking statements speak only as of the date on which they are made. The financial results included in this press release are preliminary and are subject to completion by the Company’s independent registered public accounting firm of its audit of the Company’s financial statements, which results will be contained in the Company’s Form 10-K report for 2005.
Attached are the following unaudited financial tables:


 

HOLLYWOOD MEDIA CORP. REPORTS 2005 FINANCIAL RESULTS Page 5
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED STATEMENTS OF OPERATIONS
Contact:
Matthew Hayden
Hayden Communications, Inc.
matt@haydenir.com
858-704-5065


 

 

HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
                 
    December 31,     December 31,  
    2005     2004  
ASSETS
               
 
               
CURRENT ASSETS:
               
Cash and cash equivalents
  $ 7,058,017     $ 6,330,394  
Receivables, net
    4,233,067       1,992,478  
Inventories held for sale
    1,731,293       1,006,491  
Deferred ticket cost
    11,803,999       7,460,914  
Prepaid expenses
    2,321,091       1,124,363  
Other receivables
    2,204,225       1,205,803  
Other current assets
    53,772       45,935  
Restricted cash
          255,000  
 
           
Total current assets
    29,405,464       19,421,378  
 
               
ACQUISITION ESCROW
    107,314       750,000  
PROPERTY AND EQUIPMENT, net
    2,438,608       2,455,040  
INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED INVESTEES
    546,907       435,509  
INTANGIBLE ASSETS, net
    2,419,722       1,515,985  
GOODWILL, net
    47,927,001       44,977,429  
OTHER ASSETS
    457,934       256,258  
 
           
TOTAL ASSETS
  $ 83,302,950     $ 69,811,599  
 
           
 
               
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
 
               
CURRENT LIABILITIES:
               
Accounts payable
  $ 3,893,184     $ 4,043,098  
Accrued expenses and other
    6,500,198       5,172,920  
Deferred revenue
    21,914,405       12,006,919  
Current portion of capital lease obligations
    86,418       150,103  
Convertible debenture, net
    940,927        
 
           
Total current liabilities
    33,335,132       21,373,040  
 
               
DEFERRED REVENUE
    110,417       227,000  
CAPITAL LEASE OBLIGATIONS, less current portion
    77,494       84,523  
MINORITY INTEREST
    88,138       74,075  
OTHER DEFERRED LIABILITY
    112,422       104,539  
CONVERTIBLE DEBENTURE, NET
          799,152  
SENIOR UNSECURED NOTES
    5,402,255        
DERIVATIVE LIABILITY
    1,778,000        
 
               
COMMITMENTS AND CONTINGENCIES
               
 
               
SHAREHOLDERS’ EQUITY:
               
Preferred Stock, $.01 par value, 1,000,000 shares authorized; none outstanding
           
Common stock, $.01 par value, 100,000,000 shares authorized; 32,703,457 and 31,283,706 shares issued and outstanding at December 31, 2005 and December 31, 2004, respectively
    327,035       312,837  
Additional paid-in capital
    309,228,214       305,729,408  
Deferred compensation
    (1,787,500 )     (2,437,500 )
Accumulated deficit
    (265,368,657 )     (256,455,475 )
 
           
Total shareholders’ equity
    42,399,092       47,149,270  
 
           
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
  $ 83,302,950     $ 69,811,599  
 
           


 

 

HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
                                 
    TWELVE MONTHS ENDED     THREE MONTHS ENDED  
    DECEMBER 31,     DECEMBER 31,  
    2005     2004     2005     2004  
NET REVENUES
                               
Ticketing
  $ 78,890,718     $ 59,689,971     $ 23,586,825     $ 20,085,639  
Other
    16,723,721       13,288,696       4,938,809       3,621,171  
 
                       
 
    95,614,439       72,978,667       28,525,634       23,706,810  
 
                       
 
                               
OPERATING EXPENSES:
                               
Cost of revenues — ticketing
    67,515,534       51,781,133       20,009,347       17,430,946  
Editorial, production, development and technology (exclusive of depreciation and amortization shown separately below)
    5,885,429       5,137,458       1,698,229       1,269,239  
Selling, general and administrative
    12,198,054       11,476,024       3,425,077       4,223,388  
Payroll & benefits
    16,485,885       12,275,369       3,956,094       3,934,626  
Amortization of CBS advertising
          38,807              
Depreciation and amortization
    2,414,413       2,221,100       514,279       616,486  
 
                       
 
                               
Total operating expenses
    104,499,315       82,929,891       29,603,026       27,474,685  
 
                       
 
                               
Operating loss
    (8,884,876 )     (9,951,224 )     (1,077,392 )     (3,767,875 )
 
                               
EQUITY IN EARNINGS OF INVESTMENTS
    533,228       576,317       1,321       18,604  
 
                               
OTHER INCOME (EXPENSE):
                               
 
                               
Interest, net
    (552,841 )     (2,611,081 )     (414,242 )     (62,621 )
Other, net
    159,414       776,572       109,755       (10,279 )
 
                       
 
                               
Loss before minority interest
    (8,745,075 )     (11,209,416 )     (1,380,558 )     (3,822,171 )
 
                               
MINORITY INTEREST IN EARNINGS OF SUBSIDIARIES
    (168,107 )     (388,383 )     (40,809 )     (93,133 )
 
                       
 
                               
Net loss
  $ (8,913,182 )   $ (11,597,799 )   $ (1,421,367 )   $ (3,915,304 )
 
                       
 
                               
Basic and diluted loss per common share
  $ (0.28 )   $ (0.42 )   $ (0.04 )   $ (0.13 )
 
                       
 
                               
Weighted average common and common equivalent shares outstanding — basic and diluted
    31,470,307       27,784,850       32,029,974       30,154,256  
 
                       

 

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-----END PRIVACY-ENHANCED MESSAGE-----