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Hover over the hold in the Holds section of the Legal tab of the listing
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Click the drop down arrow (1 below)
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Select Create Contract (2 below)
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This will bring up a confirmation dialog. Click Confirm
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This will bring up the contract dialog box which will have pre-filled information to the contract based on the contact(s), deposit amount and hold date on the original hold record.
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Fill out the rest of the fields
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Click Save
Please Note: If you press the cancel link on the Add Contract dialog instead of hitting the Save button, the contract will not be created and the original Hold will still be active.