Exhibit
10.4




AGREEMENT
TO CONVERT DEBT





This Agreement to Convert Debt (the
“Agreement”) is made on this 23rd day of
June 2008 by and between Daniel S. Laikin (“Laikin”), Timothy S. Durham
(“Durham”) and National Lampoon, Inc. (the “Company”).  In this
Agreement, Laikin and Durham are sometime collectively referred to as the
“Lenders”).





RECITALS





A.           Laikin
is the Chief Executive Officer, a director and a major stockholder of the
Company.





B.           Durham
is a director and a major stockholder of the Company.





C.           Exclusive
of loans made for the production of motion pictures, as of June 23, 2008, the
Company owes Laikin $1,043,751 in loans, representing $953,231.05 in principal
amount and $90,519.95 in accrued interest (the “Laikin Loans”).





D.           Exclusive
of loans made for the production of motion pictures, as of June 23, 2008, the
Company owes Durham $1,119,963.96 in loans, representing $1,084,818.93 in
principal amount and $35,145.03 in accrued interest (the “Durham
Loans”).





E.           At
the request of the Company, Laikin has agreed to accept a payment of $456,645.03
in principal amount of the Laikin Loans and $43,354.97 in accrued interest (the
“Laikin Partial Payment”) in accordance with the terms of this
Agreement.





F.           At
the request of the Company, Durham has agreed to accept a payment of $286,294.84
in principal amount of the Durham Loans and $13,705.16 in accrued interest (the
“Durham Partial Payment”) in accordance with the terms of this
Agreement.





Now, therefore, the parties agree as
follows:





AGREEMENT





1.           Satisfaction of the Laikin Partial
Payment.  Laikin shall be entitled to choose one of the
following methods of payment as full satisfaction of the Laikin Partial
Payment:





(i) the Company will credit the amount
of the Laikin Partial Payment toward the exercise of some or all of the warrants
Laikin received in connection with his purchase of the Company’s Series B
Convertible Preferred Stock and Series C Convertible Preferred Stock;
or





(ii) the Company will pay the Laikin
Partial Payment with shares of the Company’s common stock; or
















(iii) Laikin may, by written
instruction to the Company, choose a combination of (i) and (ii).





The per
share value of the common stock used to compute the number of shares to be
issued in the event that Laikin chooses to accept shares of the Company’s common
stock as full or partial payment of the Laikin Partial Payment will be the last
sale price of the common stock on the trading day preceding the date of Laikin’s
instruction to the Company.





2.           Satisfaction of the Durham Partial
Payment.  Durham shall be entitled to choose one of the
following methods of payment as full satisfaction of the Durham Partial
Payment:





(i) the Company will credit the amount
of the Durham Partial Payment toward the exercise of some or all of the warrants
Durham received in connection with his purchase of the Company’s Series B
Convertible Preferred Stock and Series C Convertible Preferred Stock;
or





(ii) the Company will pay the Durham
Partial Payment with shares of the Company’s common stock; or





(iii) Durham may, by written
instruction to the Company, choose a combination of (i) and (ii).





The per
share value of the common stock used to compute the number of shares to be
issued in the event that Durham chooses to accept shares of the Company’s common
stock as full or partial payment of the Durham Partial Payment will be the last
sale price of the common stock on the trading day preceding the date of Durham’s
instruction to the Company.





3.           Exercise of Right to Choose Payment
Option.  The Company agrees that Laikin and Durham may exercise
their rights from time-to-time under this Agreement, until the entire Laikin
Partial Payment or the entire Durham Partial Payment, as appropriate, has been
credited or paid in accordance with paragraphs 1 and 2 above, provided, however, that
Laikin and Durham must exercise all of their rights under this Agreement no
later than July 31, 2008.  If either Laikin or Durham fails or refuses
to exercise his rights under this Agreement by the close of business on July 31,
2008, then the Company will pay the Laikin Partial Payment or the Durham Partial
Payment (or the balance of the Laikin Partial Payment or the Durham Partial
Payment remaining unpaid) by issuing shares of its common stock in accordance
with paragraph 1(ii) above or 2(ii) above, as appropriate.





4.           Relinquishment of Right to Receive
Cash.  By executing this Agreement, Laikin and Durham agree
that neither shall have any further right to demand payment of the Laikin
Partial Payment or the Durham Partial Payment with cash.














5.           Loans Remaining
Unpaid.  Following the payment contemplated by this Agreement,
the unpaid balance of the Laikin Loans as of June 23, 2008 will be $543,751,
representing $496,586 in principal amount and $47,165 in accrued interest and
the unpaid balance of the Durham Loans, as of June 23, 2008, will be $819,964,
representing $798,524 in principal amount and $21,440 in accrued
interest.




5.           No Modification to
Loans.  The Lenders and the Company agree that the remaining
terms and conditions of the Laikin Loans and the Durham Loans are not modified
or changed by the payments made pursuant to this Agreement.





6.           Miscellaneous.





(a)           Cooperation.Subsequent
to the payments contemplated herein, the Lenders and the Company agree, without
further consideration, to cooperate and diligently perform any further acts,
deeds and things, and to execute and deliver any documents that may be
reasonably necessary or otherwise reasonably required to consummate, evidence,
confirm and/or carry out the intent and provisions of this Agreement, all
without undue delay or expense.





(b)           Entire Agreement/No Collateral
Representations.  The Lenders and the Company expressly
acknowledge and agree that this Agreement:  (1) is the final, complete
and exclusive statement of the agreement of each of them with respect to the
subject matter hereof; (2) supersedes any prior or contemporaneous agreements,
communications, discussions, promises, representations, understandings, conduct,
acts, courses of dealing, warranties, interpretations or terms of any kind,
whether oral or written (collectively and severally, the “prior agreements”), and that
any such prior agreements are of no force or effect except as expressly set
forth herein; and (3) may not be varied, supplemented or contradicted by
evidence of prior agreements, or by evidence of subsequent oral
agreements.





(c)           Amendment; Waiver;
Forbearance.  Except as expressly provided otherwise herein,
neither this Agreement nor any of the terms, provisions, obligations or rights
contained herein, may be amended, modified, supplemented, augmented, rescinded,
discharged or terminated (other than by performance), except by a written
instrument or instruments signed by all of the parties to this
Agreement.  Except to the extent that the party or parties claimed to
have given or consented to a waiver may have otherwise agreed in writing, no
such waiver shall be deemed a waiver or relinquishment of any other term,
provision, agreement, act, obligation or right granted under this
Agreement.





(d)           Severability.   If
any term or provision of this Agreement or the application thereof to any person
or circumstance shall, to any extent, be determined to be invalid, illegal or
unenforceable under present or future laws, then, and in that
event: (1) the
performance of the offending term or provision (but only to the extent its
application is invalid, illegal or unenforceable) shall be excused as if it had
never been incorporated













into this
Agreement, and, in lieu of such excused provision, there shall be added a
provision as similar in terms and amount to such excused provision as may be
possible and be legal, valid and enforceable; and (2) the remaining part of this
Agreement (including the application of the offending term or provision to
persons or circumstances other than those as to which it is held invalid,
illegal or unenforceable) shall not be affected thereby, and shall continue in
full force and effect to the fullest extent provided by law.





(e)           Parties in
Interest.  Notwithstanding anything else to the contrary
herein, nothing in this Agreement shall confer any rights or remedies under or
by reason of this Agreement on any persons other than the parties hereto and
their respective successors and assigns, if any.





(f)           Enforcement.  This
Agreement shall be construed and enforced in accordance with the laws of the
State of California.





(g)           Counterparts.  This
Agreement may be executed in counterparts, each of which shall be deemed an
original, and all of which together shall constitute one and the same
instrument, binding on all parties hereto.  Any signature page of this
Agreement may be detached from any counterpart of this Agreement and reattached
to any other counterpart of this Agreement identical in form hereto by having
attached to it one or more additional signature pages.





WHEREFORE, the Lenders and the
Company have executed this Agreement in the City of Los Angeles, County of Los
Angeles, State of California, on the date set forth above.






“Lenders”“Laikin”/s/  Daniel
      S. LaikinDaniel
      S. Laikin“Durham”/s/ 
      Timothy DurhamTimothy
      S. Durham“Company”National
      Lampoon, Inc.By:     /s/ 
      Daniel
      S.
      LaikinDaniel
      S. Laikin, Chief Executive
Officer