Exhibit 10.4
AGREEMENT TO CONVERT DEBENTURE
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THIS AGREEMENT (this "AGREEMENT"), is made and entered into as of August
30, 2004, by and between Hollywood Media Corp., a Florida corporation (the
"COMPANY"), and Leonardo, L.P. ("HOLDER").
WITNESSETH:
WHEREAS, Holder is the registered holder of the Company's "6% Senior
Convertible Debenture Due May 22, 2005" in the principal amount of $3,000,000
issued under Certificate No. 1, dated as of May 22, 2002 (the "DEBENTURE"),
which Debenture by its terms is convertible into shares of common stock, par
value $0.01, of the Company ("COMMON STOCK").
WHEREAS, the Debenture Certificate recites that as of the date of issuance
of the Debenture to Holder the Debenture was convertible based on a Conversion
Price of $3.46 per share, however, as a result of certain antidilution
adjustments under the terms of the Debenture in connection with the Company's
private placement in February 2004, the Conversion Price was reduced to $3.30
per share.
WHEREAS, the parties hereto desire to agree to convert the Debenture upon
the terms and agreements provided herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties, intending to be legally bound, hereby
acknowledge, confirm and agree as follows:
1. Notwithstanding anything to the contrary in the Debenture, it is
agreed that the Debenture shall automatically convert and be converted
in full into shares of Common Stock, on the terms provided below, on
and as of any one date to be selected by Holder (as evidenced by
delivery of a Conversion Notice in the form attached hereto as Exhibit
I) from among the days in the period commencing with the date hereof
through December 31, 2004, provided, however, that if no such date is
selected then such conversion shall automatically occur on and be
effective as of 12:00 Noon (EST) on December 31, 2004 assuming that on
such date the Company's Registration Statement on Form S-3 (SEC File
No. 333-91090) registering the resale of the shares of Common Stock
remains effective or that the shares are eligible for resale by Holder
under SEC Rule 144(k) and the certificates issued without restrictive
legend as to securities laws). Pursuant to such conversion, the full
($3,000,000) principal amount of the Debenture shall automatically be
converted at a Conversion Price of $3.05 per share of Common Stock
into an aggregate of 983,607 shares of Common Stock on and as of the
specified conversion date (subject to Anti-dilution Adjustments
applicable to the Debenture (under the terms of the Debenture) prior
to the date of conversion, if any). Accrued and unpaid interest on the
Debenture through and as of the conversion date shall be paid in
Interest Shares as provided in Section 4(a) of the Debenture. The
Debenture shall terminate and cease to be outstanding effective upon
such conversion and the issuance of the 983,607 shares of Common Stock
and the Interest Shares.
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2. Promptly after the date of conversion under the foregoing section 1,
Holder will deliver the original Debenture to the Company, and Holder
will sign and deliver to the Company the conversion notice attached to
this Agreement (if not previously done as contemplated in section 1
above).
3. Unless required by applicable law, no party hereto shall make any
disclosure of this Agreement or any of the matters contained herein;
it being agreed that either party may make such disclosure if such
party determines in its good faith judgment that disclosure is
required by law (and it being further contemplated that the Company
may be required to disclose this agreement on Form 8-K or other SEC
filings).
4. The Company represents and warrants that (i) the issuance of the
Common Stock upon conversion of the Debenture has been duly authorized
and no additional corporate or stockholder action is required for the
approval thereof, (ii) no consent, authorization, order or approval
of, or filing or registration with, any governmental authority or
other person is required for the execution and delivery by the Company
of this Agreement, the Company's performance of its obligations
hereunder and/or the amendment to the Debenture contemplated hereby
and (iii) the shares of Common Stock to be issued upon conversion of
the Debentures and the Interest Shares will be duly authorized,
validly issued, fully paid and nonassessable.
5. Holder represents and warrants that no consent, authorization, order
or approval of, or filing or registration with, any governmental
authority or other person is required for the execution and delivery
by Holder of this Agreement, Holder's performance of its obligations
hereunder and/or the amendment to the Debenture contemplated hereby.
6. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the state of New York. This Agreement
constitutes the entire understanding and agreement between the parties
hereto with respect to the subject matter hereof.
IN WITNESS WHEREOF, the undersigned parties have executed this AGREEMENT TO
CONVERT DEBENTURE as of the day and year first above written.
HOLLYWOOD MEDIA CORP. LEONARDO, L.P.
By: /s/ Mitchell Rubenstein By: /s/ Joseph R. Wekselblatt
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Name: Mitchell Rubenstein Name:
Title: Chief Executive Officer Title:
Leonardo, L.P.
By Leonardo Capital Management Inc,
General Partner
By Angelo, Gordon & Co., L.P. Director
By Joseph R. Wekselblatt, C.F.O.
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EXHIBIT I
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(To be Executed by Registered Holder
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in order to Convert Debenture)
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CONVERSION NOTICE
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FOR
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6% SENIOR CONVERTIBLE DEBENTURE DUE MAY 22, 2005
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The undersigned, LEONARDO, L.P., as Holder of the 6% Senior Convertible
Debenture Due May 22, 2005 of HOLLYWOOD MEDIA CORP. (the "Company"), No. 1, in
the outstanding principal amount of $3,000,000 (the "Debenture"), hereby elects
to convert ALL of the outstanding principal amount of the Debenture into shares
of Common Stock, par value $.01 per share (the "Common Stock"), of the Company
according to the conditions of the Debenture, as of the date written below.
Date of Conversion: ________, 2004
Principal Amount of Debentures to be converted: $3,000,000
Tax ID Number (If applicable): 98-012-0439
Please confirm the following information:
Conversion Price: $3.05 per Share
Number of shares of Common Stock to be issued: 983,607 SHARES
Is the Variable Price being relied on pursuant to Section 6(c) of the
Debenture?
(check one) YES ____ No _X_
Please issue the Common Stock into which the Debentures are being converted
and, if applicable, any check drawn on an account of the Company in the
following name and to the following address:
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DELIVERY INSTRUCTIONS:
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Leonardo, L.P.
c/o Angelo Gordon, LP
245 Park Avenue
New York, NY 10167
Attention: Gary Wolf
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Issue to: Leonardo, L.P
Address: 245 Park Avenue
New York, NY 10167
Telephone Number: (212) 692-2018
Facsimile Number: (212) 867-6449
Authorization (signature) :
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By (print name) :
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Title (for Holder):
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Dated: _________, 2004
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ACKNOWLEDGMENT
HOLLYWOOD MEDIA CORP. (the "Company") hereby acknowledges this
Conversion Notice by LEONARDO, L.P. and hereby directs American Stock Transfer &
Trust Co. ("AST") to issue the above indicated 983,607 shares of Common Stock in
accordance with the agreed Transfer Agent Instructions dated May 22, 2002 from
the Company and acknowledged and agreed to by American Stock Transfer & Trust
Co.
In accordance with said Transfer Agent Instructions, the stock certificates for
such shares may be issued without the restrictive legend therein if AST is
provided with the requisite opinion of counsel (it being contemplated that the
shares may be eligible for sale under Rule 144(k) thereby eliminating the need
for such legend if provided in such opinion).
HOLLYWOOD MEDIA CORP.
By:
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Name:
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Title:
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Dated: __________, 2004
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