Exhibit 10.6
AGREEMENT TO CONVERT DEBENTURE
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THIS AGREEMENT (this "AGREEMENT"), is made and entered into as of the 31st
day of August, 2004, by and between Hollywood Media Corp., a Florida corporation
(the "COMPANY"), and CD Investment Partners, Ltd. ("CD").
WITNESSETH:
WHEREAS, CD is the registered holder of the Company's "6% Senior
Convertible Debenture Due May 22, 2005" issued under Certificate No. 5, 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 CD 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 Debenture was originally purchased from the Company by and
thereupon issued to, Carpe Diem Long Short Fund, LLC in May 2002, and the
Debenture was subsequently assigned to CD as of March 1, 2003.
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
into shares of Common Stock, on the terms provided below, on and as of
any date to be selected by CD (as evidenced by delivery of a
Conversion Notice in the form attached hereto as Exhibit I) from the
days commencing with the date hereof through September 30, 2004,
provided, however, that if no such date is selected then such
conversion shall be on and effective as of September 30, 2004.
Pursuant to such conversion, the full ($200,000) 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 65,574 shares
of Common Stock. Accrued and unpaid interest on the Debenture shall be
paid in Interest Shares as provided in Section 4(a) of the Debenture
except that the number of Interest Shares shall be calculated using a
price of $3.05 per share (it being understood and agreed that the
number of Interest Shares shall be 1,005 if the Debenture is converted
on September 30, 2004). The Debenture shall terminate and cease to be
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outstanding effective upon such conversion. Certificates evidencing
the shares of Common Stock issuable upon conversion of the Debenture
and the Interest Shares shall be delivered to CD no later than three
(3) trading days after CD's delivery of the Conversion Notice to the
Company.
2. CD will deliver the original Debenture to the Company promptly after
the date of conversion under the foregoing section 1, and CD will sign
and deliver to the Company the conversion notice attached to this
Agreement.
3. CD hereby confirms to the Company that (i) CD does not have any (and
CD hereby releases any) claims under the terms of the Debenture (or
its related registration rights agreement) arising out of or related
to the Company's communications to CD, dated April 20, 2004, regarding
its acquisition of Studio Systems, Inc. or the Company's consummation
of the acquisition and (ii) CD's consent was not required for the
consummation of such acquisition.
4. No party hereto shall make any disclosure of this Agreement or any of
the matters contained herein; it being agreed that either party shall
be permitted to disclose this Agreement or any of the matters
contained herein if such party determines in its good faith judgment
that such disclosure is required by applicable law.
5. 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 and (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.
6. CD 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 CD of this Agreement or CD's performance of its obligations
hereunder.
7. This Agreement may be executed in multiple counterparts, each of which
shall be deemed to be an original and all of which, when taken
together, shall constitute one instrument.
8. 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.
[signature page follows]
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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. CD INVESTMENT PARTNERS, LTD.
By: CD Capital Management LLC
By: /s/ Mitchell Rubenstein Its: Investment Manager
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Name: Mitchell Rubenstein
Title: Chief Executive Officer
By: /s/ John Ziegelman
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Name: John Ziegelman
Title: President
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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, CD INVESTMENT PARTNERS, LTD., as Holder of the 6%
Senior Convertible Debenture Due May 22, 2005 of HOLLYWOOD MEDIA CORP. (the
"Company"), No. 5, in the outstanding principal amount of $200,000 (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: $200,000
Tax ID Number (If applicable): 01-0758615
Please confirm the following information:
Conversion Price: $3.05 per Share
Number of shares of Common Stock to be issued: 65,574 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:
Issue to: CD Investment Partners, Ltd.
Address: 2 North Riverside Plaza, Suite 600
Chicago, Illinois 60606
Attn: John Ziegelman, President
Telephone Number: (312) 466-3226
Facsimile Number: (312) 559-1288
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 CD INVESTMENT PARTNERS, LTD. and hereby directs American
Stock Transfer & Trust Co. ("AST") to issue the above indicated 65,574 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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