EXHIBIT (10)-2
SECURITY AGREEMENT
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This Security Agreement ("Agreement") is entered as of the 15th day of
August, 1998 by Grand Havana Enterprises, Inc., a Delaware corporation, (the
"Debtor"), and Xxxxx Xxxxxxx, an individual (the "Secured Party").
RECITALS
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A. The Secured Party has agreed to lend the Debtor the sum set forth in
the attached Secured Promissory Note (the "Note").
B. As a condition of Secured Party agreeing to accept the Note in
consideration for making the loan evidenced by the Secured Party has required
that Debtor enter into this Security Agreement and pledge certain collateral, as
hereinafter described, to assure the Secured Party receives the benefits of the
service contracts.
NOW, THEREFORE, in consideration of the above premises, and for other good
and valuable consideration the receipt of which Debtor hereby acknowledges,
Debtor agrees as follows:
ARTICLE
1. AGREEMENT
1.1 The Collateral. For value received, Debtor hereby pledges, assigns and
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grants to Secured Party without any recourse to Debtor except as provided herein
and subject to the provisions of this Agreement, a security interest in the
following described personal property (the "Collateral"):
See Exhibit "A" attached hereto and incorporated herein by this reference.
1.2 Grant of Security Interest. For value received, Debtor hereby pledges,
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assigns, and grants to Secured Party, without any recourse to Debtor whatsoever
and subject to the provisions of this Agreement, a security interest in the
personal property described in Section 1.1 hereof which shall be referred to as
the "Collateral."
Page 1 of 13
1.3 The Obligations. The Collateral secures and will secure the prompt and
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unconditional payment of the "Obligations." As used in this Agreement, the term
"Obligations" means any and all amounts due to Secured Party as the successor-
in-interest to the Debtor by virtue of the Note executed by the Debtor and
delivered to the Secured Party.
1.4 Representations, Warranties and Covenants. Debtor acknowledges and
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agrees that Secured Party is relying on the representations and warranties and
covenants in this Agreement as a condition precedent to the acceptance of the
Note and that all such representations and warranties and covenants shall
survive the execution and delivery of this Agreement and any bankruptcy,
insolvency or similar proceedings. Debtor hereby represents and warrants to
Secured Party and covenants for the benefit of Secured Party as follows:
A. Debtor is (and with respect to all Collateral acquired hereafter,
shall be) the sole legal and equitable owner of the Collateral
free from any adverse claim, lien, security interest, encumbrance
or other right, title or interest of any person, except for the
security interest created hereby. Debtor has the unqualified
right and power to grant a security interest in the Collateral
without the consent of any person and Debtor shall at Debtor's
expense defend the Collateral against all claims and demands of
all persons at any time claiming the Collateral or any interest
therein adverse to Secured Party. Debtor shall not create, grant
nor suffer to exist any pledge, security interest, lien, levy,
garnishment, attachment, charge or encumbrance upon any of the
Collateral (except in favor of Secured Party) and shall at all
times keep the Collateral free from the same.
B. If new or additional Collateral is pledged to Secured Party, then
the same shall be deemed an increment to the Collateral and under
pledge and assignment to Secured Party hereunder. If evidenced by
a stock certificate, bond, warrant, debenture, certificate, or
other Instrument or writing, then such securities shall (to the
extent acquired or received by or placed under Debtor's control)
be held in trust for and promptly delivered to Secured Party,
together with duly executed stock powers in blank and any other
assignments or endorsements as Secured Party may request. If any
such securities are uncertificated, then Debtor shall immediately
upon acquisition of such securities cause Secured Party to be
registered as the transferee thereof on the books of the
depository, custodian bank, clearing corporation, brokerage
house, issuer or otherwise, as may be requested by Secured Party.
C. Without the prior written consent of Secured Party, Debtor shall
not sell, transfer, assign, convey or otherwise dispose of any
interest in any of the Collateral, nor enter into any contract or
agreement to do so.
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D. Debtor shall pay when due all taxes or other governmental charges
whatsoever levied against the Collateral and all assessments
(including stock assessments) upon the Collateral, and Debtor
shall pay any tax which may be levied on or assessed against this
Agreement;
E. Debtor, or if Debtor fails to do so, Secured Party shall pay on
demand all filing fees and similar charges and all costs incurred
by Secured Party in creating a security interest or securing and
enforcing a security interest in the Collateral including the
expenses and reasonable fees of Secured Party's legal counsel,
whether or not involving litigation and/or appellate,
administrative or bankruptcy proceedings. Debtor agrees to
indemnify and hold Secured Party harmless on demand against all
expenses, losses, consequences or damages incurred or suffered by
Secured Party arising from or relating to any claim, demand,
action or proceeding brought by any person(s) whomsoever in
connection with or relating to the Collateral or this Agreement
(including without limitation any court costs and the expenses
and reasonable fees of Secured Party's legal counsel), except to
the extent that a court of competent jurisdiction shall hold the
same to be the result of Secured Party's own gross negligence or
willful misconduct. Debtor shall pay any documentary stamp taxes,
intangible taxes or other taxes (except for federal or state
franchise or income taxes based on the net income of Secured
Party) which may now or hereafter apply to the Collateral or this
Agreement, and Debtor agrees to indemnify and hold Secured party
harmless from and against any liability, costs, attorney's fees,
penalties, interest or expenses relating to any such taxes, as
and when the same may be incurred. Debtor shall pay on demand,
and indemnify and hold Secured Party harmless against, any and
all present or future taxes, levies, imposts, deductions, charges
and withholdings imposed in connection with this Agreement, the
Collateral or the Obligations by the laws or governmental
authorities of any jurisdiction or the United States of America.
All sums payable by Debtor under this subparagraph are and shall
be secured by the Collateral.
F. There is no fact that the Debtor has not disclosed to Secured
Party in writing that could materially adversely affect its
properties, business or financial condition, or any Collateral.
Debtor shall promptly notify Secured Party in writing if any
event shall occur or become known to Debtor which has or could
have any such materially adverse effect with respect to Debtor,
or which changes the truth or correctness of any representation
or warranty in this Agreement or which affects the value of, or
any rights incidental to, any Collateral or the ability of Debtor
or Secured Party to dispose of the same (including without
limitation the levy of any legal process or the filing of any
lien against the Collateral or the adoption of any marketing
order, arrangement or procedure affecting the Collateral, whether
governmental or otherwise).
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G. Debtor shall not take or permit any action that may impair the
Collateral or Secured Party's security interest therein, and
shall not permit any of the Collateral to be used in violation of
any statute or regulation or ordinance. Without limiting the
foregoing, Debtor will not compromise, release, surrender or
waive any rights of any nature whatsoever in respect of any of
the Collateral without Secured Party's prior written consent,
which Secured Party may grant or withhold in its sole discretion.
H. Debtor shall immediately: (a) to the extent not previously
delivered to Secured Party in compliance with the terms hereof,
deliver to Secured Party any and all Instruments, securities,
notes, drafts and acceptances included in the Collateral at the
time and place and manner specified by Secured Party, together
with any endorsements, stock powers in blank and assignments
requested by Secured Party for their transfer to Secured Party or
to any other person selected by Secured Party, all in form and
substance satisfactory to Secured Party; and (b) execute, deliver
and file any and all financing statements, continuation
statements, mortgages, agreements, notices, vouchers, invoices,
schedules, confirmatory assignments, conveyances, transfer
endorsements, powers of attorney, proxies, certificates, deeds or
other papers and/or perform any act which Secured Party may deem
necessary or appropriate to create, perfect, preserve, validate
or otherwise protect Secured Party's security interest in the
Collateral or to enable Secured Party from time to time to
exercise and enforce Secured Party's rights under this Agreement.
I. The execution and delivery of this Agreement does not and shall
not (a) violate any material provisions of any law, rule,
regulation, order, writ, judgment, injunction, decree,
determination or award applicable to Debtor, nor (b) result in a
breach of, or constitute a default under, any indenture, bond,
mortgage, lease, instrument, credit agreement, undertaking,
contract or other agreement to which Debtor is a party or by
which any of them or their respective properties may be bound or
affected. This Agreement constitutes the legal, valid and binding
obligation of the Debtor and is enforceable against Debtor in
accordance with its terms.
1.5 Rights of Secured Party. Debtor agrees with and for the benefit of
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Secured Party that:
A. Secured Party shall have the right (but not the obligation) at
its option to discharge or pay any taxes, assessments, liens,
security interests or other encumbrances at any time levied or
placed on or against the Collateral. Any amount so paid or
advanced by Secured Party shall be secured by the Collateral and
shall be repayable by Debtor on demand.
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B. Secured Party may sign and file appropriate financing statements,
security agreements, recording instruments or other documents or
amendments thereto with respect to the Collateral or any portion
thereof without the signature of Debtor, and Debtor shall reimburse
Secured Party on demand for any reasonable costs advanced or
incurred by Secured Party in connection therewith. At Secured
Party's option, a carbon, photographic or other reproduction of
this Agreement (or of any financing statement executed by Debtor)
shall be sufficient as a financing statement.
C. Debtor hereby irrevocably constitutes and appoints Secured Party
its attorney-in-fact for the purpose of carrying out the provisions
of this Agreement and taking any action and executing any
instrument which Secured Party may deem necessary or advisable to
accomplish the purposes hereof, which appointment is irrevocable
and coupled with an interest. Without limiting the generality of
the foregoing, Secured Party shall have the right, after the
occurrence and during the continuance of an Event of Default, with
full power of substitution either in Secured Party's or Debtor's
name, to ask for, demand, xxx for, collect, receive and give
acquittance for any and all moneys due or to become due with
respect to or in connection with the Collateral; to endorse checks,
drafts, orders and other instruments for the payment of money
representing payment on account, dividends or other distribution
with respect to or in connection with the Collateral or any part
thereof and to give full discharge for the same; to settle,
compromise, prosecute or defend any action, claim or proceeding
with respect to the Collateral; and to sell, assign, endorse,
pledge, transfer and make any agreement respecting, or otherwise
deal with, the Collateral.
D. Secured Party shall have such other rights as are provided under
applicable law.
E. Secured Party may take control of any Proceeds of Collateral at any
time and may at its option apply any cash Proceeds of the
Collateral (including without limitation any insurance proceeds or
amounts payable in any lawsuit on account of the Collateral) to the
payment of the Obligations, whether or not matured, in any manner
deemed appropriate by Secured Party.
1.6 Events of Default. For purposes of this Agreement, an "Event of Default"
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shall exist hereunder upon the happening of any of the following events:
A. The failure of Debtor to pay or to deliver to Secured Party any sum
when due under the Note;
B. Any representation or warranty made in this Agreement or the Note
shall prove false or misleading in any material respect, or Debtor
shall
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fail to perform any covenant, agreement or undertaking under this
Agreement or the Note;
C. Debtor from and after the date hereof shall, or shall attempt to,
encumber, subject to any further pledge or security interest, sell,
transfer or otherwise dispose of any of the Collateral or any
interest therein;
D. All or any part of the Collateral shall be attached or levied upon
or seized in any legal proceedings, or held by virtue of any lien;
E. If the Debtor shall make an assignment for the benefit of
creditors, file a petition in bankruptcy, apply to or petition any
tribunal for the appointment of a custodian, receiver, intervenor
or trustee for the Debtor or a substantial part of the Debtor's
assets; or if the Debtor shall commence any proceeding under any
bankruptcy, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, whether now or
hereafter in effect; or if any such petition or application shall
have been filed or proceeding commenced against the Debtor or if
any such custodian, receiver, intervenor or trustee shall have been
appointed.
1.7 Rights and Remedies on Default. If any of the foregoing Events of
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Default shall occur, then Secured Party, in its sole discretion and without
prior notice to Debtor, may at any time and from time to time during the
continuation thereof take any or all of the following actions:
A. Foreclose Secured Party's security interest(s) in any or all of the
Collateral as provided by law;
B. Sell, resell, discount or dispose of all or any portion of the
Collateral, or endorse, assign and convey the same to any third
party;
C. Require Debtor to assemble Debtor's books, records, files, papers
and other data pertaining to the Collateral and deliver them to
Secured Party at Debtor's expense to a place designated by Secured
Party;
D. Exercise any and all other rights and remedies with respect to the
Collateral which Secured Party may enjoy as a secured party under
this Agreement, the California Commercial Code or any other
applicable law.
All rights, remedies and powers granted to Secured Party in this
Agreement or the Note or by applicable law shall be cumulative and may be
exercised singly or concurrently on one or more occasions. No delay in
exercising or failure to exercise any of Secured Party's rights or remedies
shall constitute a waiver thereof, nor shall any single or partial exercise of
any right or remedy by Secured Party preclude any other or further exercise of
that or any other right or remedy. No waiver of any right or remedy by Secured
Party shall
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be effective unless made in writing and signed by Secured Party, nor shall any
waiver on one occasion apply to any future occasion, but shall be effective only
with respect to the specific occasion addressed in that signed writing.
1.8 Sale of the Collateral. With respect to any sale or disposition of any
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of the Collateral, whether made under the power of sale in this Agreement, under
any applicable provisions of the California Commercial Code or other applicable
law, or under judgment or order or decree in any judicial proceeding for the
foreclosure of Secured Party's security interest or involving the enforcement of
this Agreement:
A. The Collateral may be sold, resold, assigned or delivered in one or
more parcels, at the same or at different times, at public or
private sale or at any broker's board or on any securities exchange
if publicly traded at the time of the sale, for cash or on credit
or for other property, for immediate or future delivery, and at
such price(s) and on such terms as Secured Party may determine in
its sole discretion, so long as such disposition is commercially
reasonable. Without precluding any other methods of sale, the sale
of the Collateral shall be deemed made in a commercially reasonable
manner if conducted in conformity with reasonable commercial
practices of banks or other financial institutions when disposing
of similar property.
B. Secured Party agrees to give Debtor not less than fifteen (15)
business days prior written notice of the time and place of any
non-judicial public sale of the Collateral and not less than
fifteen (15) days prior written notice of the date after which
Secured Party will effect a private sale of the Collateral. Debtor
hereby waives any and all other demands, advertisements or notices
except as required by law. In the case of any sale at a broker's
board or on a securities exchange, the notice required by this
subsection B shall identify the board or exchange at which such
sale is to be made and the day on which the Collateral (or a
portion thereof) will first be offered for sale. Any public sale of
any of the Collateral shall be held at such time or times within
ordinary business hours at such place or places as Secured Party
may state in the notice or publication (if any) of such sale.
C. Secured Party shall not be obligated to sell any of the Collateral
if it determines not to do so, notwithstanding that notice of a
sale of such Collateral may have been given. Secured Party may,
without notice or publication, adjourn any public or private sale
or cause the same to be adjourned from time to time by announcement
at the time and place fixed for the sale, and such sale may be
made, without further notice, at the time and place identified in
such announcement. In case of any sale of all or any part of the
Collateral on credit or for future delivery, Secured Party may
retain the Collateral sold until the sales price is paid by the
purchaser(s) thereof, but Secured Party shall not incur any
liability if any such purchaser shall fail to
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take up and pay for the Collateral so sold, in which case such
Collateral may again be sold upon like notice.
D. Debtor understands that applicable federal and state laws
restricting and imposing requirements on the sales of securities to
the general public (the "Securities Laws") may affect the
disposition of any securities and that Secured Party's concern that
its sale or disposition of any such securities be in compliance
with the Securities Laws may limit Secured Party's course of
conduct in disposing or attempting to dispose of all or any part of
such securities, and may also limit the extent to which or the
manner in which any subsequent transferee may dispose of the same.
Consequently, Debtor agrees that Secured Party may, in selling or
disposing of any such securities, proceed in such manner and under
such circumstances as it may deem necessary or advisable to assure
compliance with all Securities Laws. Without limiting the
generality of the foregoing, the Secured Party may, subject to
compliance with applicable law, in its discretion: i) sell
privately any such securities notwithstanding that such securities
may be qualified or registered for sale to the general public; ii)
approach and negotiate with a restricted number of potential
purchasers to effect such sale; and iii) restrict such sale to
purchasers as to their number, nature of business and investment
intention (including, without limitation, to purchasers each of
whom will represent and agree to the satisfaction of Secured Party
that such purchaser is purchasing for its own account, for
investment, and not with a view to the distribution or sale of such
securities or part thereof), it being understood that Secured Party
may require Debtor, and Debtor hereby agrees upon the written
request of Secured Party to cause: a) a legend or legends to be
placed on the certificates or Instruments to be delivered to such
purchasers to the effect that the securities represented thereby
have not been registered under the Securities Laws and setting
forth or referring to restrictions on the transferability of such
securities; b) the issuance of stock transfer instructions to the
issuer's transfer agent, if any, with respect to such securities,
or, if the issuer transfers its own securities, a notation in the
appropriate records of such issuer; and to be delivered to the
purchasers a signed acknowledgment of the issuer of such securities
that, as concerns such securities, such purchasers shall be
entitled to the rights of Debtor by virtue of their purchase of
such securities from Secured Party.
E. Debtor agrees, if requested by Secured Party, at Debtor's sole
expense to take (and to cause any Issuer(s) of securities pledged
and assigned hereunder to take) such actions, render such
assistance and prepare, distribute and/or file such documents as
Secured Party or its legal counsel may reasonably request in
connection with the private or public sale of such securities.
Debtor agrees to indemnify and hold harmless Secured Party and any
underwriter against all loss, liability, expenses or claims
(including the reasonable cost of any investigation) which any of
them may incur in
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connection with the sale of such securities to the extent that such
loss, liability, expense or claim arises out of or is based upon
any alleged untrue statement of a material fact by Debtor contained
in any registration statement, prospectus (or any amendment or
supplement thereto) or in any notification or offering circular, or
arises out of or is based upon any alleged omission to state a
material fact by Debtor required to be stated therein or necessary
to make the statements therein not misleading, except to the extent
due to the gross negligence or willful misconduct of Secured Party
or any such underwriter.
F. Secured Party may, to the fullest extent permitted by applicable
law, bid for and purchase the Collateral in a commercially
reasonable manner, and upon compliance with the terms of sale may
hold, retain and possess and dispose of the same in its own
absolute right.
G. Upon consummation of any sale, Secured Party shall have the right
to assign, transfer, endorse, convey and deliver to the respective
purchaser(s) the Collateral or portion thereof so sold.
H. A sale of the Collateral shall divest all right, title, interest,
equity, redemption, claim and demand whatsoever of Debtor,
including Debtors right to claim a percentage or royalty from the
profits or proceeds derived from the Collateral and shall be a
perpetual bar both at law and in equity against Debtor and Debtor's
successors and assigns, and against any and all persons claiming or
who may claim all or any part of the Collateral from, through or
under any of them.
I. To the fullest extent permitted by law, Debtor hereby waives any
claims against Secured Party arising with respect to any decrease
in the market value of any Collateral during the period held for
sale, or arising by reason of the possibility that the price at
which the Collateral may have been sold was less that the price
that might have been obtained had the sale been otherwise effected.
J. Secured Party shall have no obligation whatsoever to resort first
to any other security which Secured Party may hold for the
Obligations. Secured Party shall not incur any liability to Debtor
as a result of the sale of any Collateral at any private sale
conducted in a commercially reasonable manner, or as a result of
any failure to sell or offer for sale any Collateral for any reason
whatsoever or to exercise any other right, privilege, option or
power to the fullest extent permitted by law granted to Secured
Party hereunder.
K. A written agreement to sell any Collateral, which agreement Secured
Party in good xxxxx xxxxx itself bound to perform, shall be treated
as a sale of such Collateral and Secured Party shall be free to
carry out such agreement.
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If such an agreement is then effective, Debtor shall not be
entitled to the return of any Collateral subject thereto, even if
after the date of such agreement all Events of Default shall have
been cured or the Obligations shall have been fully paid and
performed.
L. After deducting all costs and expenses of every kind for taking,
retaking, care, safekeeping, collecting, holding, preparing for
sale, selling, delivering and the like (including legal costs,
insurance, commission for sale, and reasonable attorney's fees) and
all other charges against the Collateral, Secured Party shall apply
the residue of the proceeds of any such sale or other disposition
against any and all amounts remaining unpaid under the Obligations,
all in such order of priority as Secured Party may determine in its
sole and reasonable discretion.
1.9 Waiver of Rights. To the fullest extent permitted by law, Debtor hereby
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waives notice, demand, presentment, protest, notice of dishonor, suit against or
joinder of any other person, and all other requirements necessary to charge or
hold Debtor liable with respect to the obligations hereunder. Debtor hereby
consents and agrees that, at any time and from time to time without notice to
Debtor, Secured Party and any other owner(s) of any collateral or security given
for the Obligations may agree to renew, extend, compromise, discharge or release
the Obligations in whole or in part, and/or to release, increase, change,
substitute or exchange all or any part of such collateral or security, or to
modify the terms of the Obligations in any other way that Secured Party and such
person(s) may deem appropriate; no such renewal, extension, compromise,
discharge, release, increase, change, substitution, exchange or modification
shall release or affect in any way the liability of Debtor or Secured Party's
rights against the Collateral, and Debtor hereby waives any and all defenses and
claims whatsoever based thereon. Until Secured Party receives all sums due with
respect to the Obligations in immediately available funds, Debtor shall not be
released from liability unless Secured Party expressly releases Debtor in a
writing signed by Secured Party.
1.10 Interest. All obligations of Debtor to Secured Party arising under this
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Agreement shall bear interest, from the date when due until paid in full. All
such interest is and shall be secured by the Collateral. Notwithstanding any
contrary provision of the obligations, in no event shall any agreed to or actual
exaction charged, reserved or taken as an advance or forbearance by Secured
Party as consideration for the Obligations exceed the limits (if any) imposed or
provided by the law applicable from time to time to the Obligations for the use
or detention of money or for forbearance in seeking its collection; Secured
Party hereby waives any right to demand such excess. In the event that the
interest provisions of the Note or any exactions required thereunder shall
result at any time or for any reason in an effective rate of interest that
exceeds the maximum interest rate permitted by applicable law (if any), then
without further agreement or notice the obligation to be fulfilled shall be
automatically reduced to such limit and all sums received by Secured Party in
excess of those lawfully collectible as interest shall be applied against the
principal of the Obligations immediately upon Secured Party's receipt thereof,
with the same force and
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effect as though the payor had specifically designated such extra sums to be so
applied to principal and Secured Party had agreed to accept such extra
payment(s) as a premium-free prepayment or prepayments. During any time that any
of the Obligations bear interest at the maximum lawful rate (whether by
application of this paragraph or otherwise), interest shall be computed on the
basis of the actual number of days elapsed and the actual number of days in the
respective calendar year.
1.11 Actions or Proceedings. With respect to any legal action or proceeding
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arising under this Agreement or the Note or concerning the Obligations and/or
the Collateral, Debtor to the fullest extent permitted by law: (A) submits to
the jurisdiction of the state and federal courts in the State of California; (B)
agrees that the venue of any such action or proceeding may be laid in Los
Angeles County and waives any claim that the same is an inconvenient forum; (C)
to the extent not prohibited by applicable law waives any right to immunity from
any such action or proceeding; and (D) waives any right to interpose any set off
or counterclaim or to plead laches or any statute of limitations as a defense in
any such action or proceeding, and waives all statutory provisions and
requirements for the benefit of Debtor, now or hereafter in force. No provision
of this Agreement shall limit Secured Party's right to serve legal process in
any other manner permitted by law or to bring any such action or proceeding in
any other competent jurisdiction.
1.12 Notices. Except as otherwise provided in this Agreement for service of
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legal process, any notice to Debtor shall be in writing and shall be deemed
sufficiently made if delivered personally or if transmitted by postage prepaid
first class mail (airmail if international) or by telegraph or by telex with
confirmed answer back, to the address appearing below:
Debtor:
Grand Havana Enterprises, Inc.
0000 Xxxxxxxx Xxxx.
Xxx Xxxxxxx, XX.
Secured Party:
Xxxxx Xxxxxxx
Attn: Xxxxx Xxxxxxxx, Esq.
0000 Xxxxxxxx Xxxx.
Xxxxxxx Xxxxx, XX 00000
Any party may change its address for notice by giving written notice of the
change.
1.13 Binding Effect. The terms of this Agreement shall inure to the benefit
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of Secured Party and its successors and assigns and shall be binding upon Debtor
and Debtor's permitted successors and assigns.
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1.14 Term. This Agreement shall take effect when signed by Debtor and
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delivered to Secured Party. This Agreement is a continuing agreement and shall
remain in full force and effect until all the Obligations shall have been paid
in full, unless earlier terminated by Secured Party in writing.
1.15 Interpretation. If this Agreement is signed by more than one person,
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then the term "Debtor" as used in this Agreement shall refer to all such persons
jointly and severally, and all promises, agreements, covenants, waivers,
consents, representations, warranties and other provisions in this Agreement are
made by and shall be binding upon each and every undersigned person, jointly and
severally. Whenever used in this Agreement, the term "person" means any
individual, firm, corporation, trust or other organization or association or
other enterprise or any governmental or political subdivision, agency,
department or instrumentality thereof. Whenever used in this Agreement, the
terms "written" or "in writing" mean any form of written communication and any
communication by means of telex, telecopier device, telegraph or cable.
Captions and paragraph headings contained in this Agreement are for convenience
only and shall not affect its interpretation. Whenever used in this Agreement
and unless the context otherwise requires, words in the plural include the
singular, words in the singular include the plural, and pronouns of any gender
include the other genders.
1.16 Cumulative Rights. The rights of Secured Party under this Agreement are
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in addition to, and not in substitution for, any rights available to Secured
Party against Debtor at law or in equity, all of which are cumulative and may be
exercised by Secured Party in whole or in part from time to time.
1.17 Miscellaneous. Time is of the essence with respect to the provisions of
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this Agreement. This Agreement may be amended but only by an instrument in
writing executed by the party to be burdened thereby. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction only, be ineffective only to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. This Agreement shall be governed by, and construed and enforced
in accordance with, the laws of the State of California.
WITNESS THE DUE EXECUTION by Debtor as of the 15th day of August, 1998.
DEBTOR:
Grand Havana Enterprises, Inc.
/s/ Xxxxxxx Xxxxxxx
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By: Xxxxxxx Xxxxxxx
Its: Vice President
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Exhibit "A"
DESCRIPTION OF COLLATERAL
1. All membership initiation fees, membership dues whether paid monthly,
annually or in some other periodic payment basis which are paid by patrons or
members for club membership privileges at any of the following locations:
Grand Havana Room--Beverly Hills, CA.
Grand Havana Room--New York City, NY.
Grand Havana Room--Washington, D.C.
all of which shall be referred to herein as the "Clubs".
2. All accounts, receipts, funds held by or to be paid to the Debtor
from the Clubs or from the retail stores located in Las Vegas, Nevada in the
Bally's Hotel, known as the Grand Havana House of Cigars and the Grand Havana
House of Cigars in Xxxxxxx Hills (collectively, the "Stores").
3. The leasehold interests of the Debtor at the locations for the Clubs
and the Store.
4. All presently owned or hereafter acquired equipment, supplies,
materials, machines, appliances, fixtures, furniture, furnishings, leasehold
improvements, appurtenances of any description, and all additions and accessions
thereto and replacements therefor; and
5. All personal property of any description, now owned or hereafter to
be acquired by or on behalf of Debtor, including, without limitation, inventory,
work-in-progress, and supplies, and all additions and accessions thereto and
replacements therefor; and
6. All accounts, contract rights, general intangibles, receivables, and
other documents, instruments, and other rights to the payment of money or
performance of services, now existing or hereafter arising in any way relating
to the business of Debtor or in connection with the use of the property
described in (1) and (2) above; and
7. All proceeds of the foregoing collateral, including whatever is
receivable or received when collateral or proceeds is sold, collected, exchanged
or otherwise disposed of, whether such disposition is voluntary or involuntary,
and includes, without limitation, all rights to payment, including return
premiums, with respect to any insurance relating thereto.
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