EXHIBIT 7.1
AGREEMENT FOR PURCHASE AND SALE OF STOCK
THIS AGREEMENT FOR PURCHASE AND SALE OF STOCK ("Agreement") is made and
entered into this 3/rd/ day of June, 1999, by and between ▇▇▇▇▇ ▇▇▇▇▇▇▇
("Seller") and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("Buyer").
In consideration of the mutual promises contained herein, and for other
good and valuable consideration the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:
1. Seller does hereby sell, assign, convey and transfer to Buyer, and Buyer
does hereby purchase from Seller, 920,133 shares of common stock of
Grand Havana Enterprises, Inc., a Delaware corporation ("Shares").
2. Seller does hereby represent and warrant that he has good and marketable
title to the Shares and is hereby conveying them to Buyer free and clear
of any and all liens and encumbrances whatsoever.
3. The purchase price to be paid by Buyer to Seller for the Shares is
$73,610.64, which shall be payable pursuant to a Non-Recourse Promissory
Note executed by Buyer in favor of Seller concurrently herewith. The
payment of the purchase price shall be secured by the Shares pursuant to
the terms of a Stock Pledge Agreement to be executed by Buyer and Seller
concurrently herewith.
4. The parties hereto agree to execute any and all documents, including but
not limited to stock assignments separate from certificate, in order to
effectuate the terms and conditions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day
and year first above written.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
NON-RECOURSE PROMISSORY NOTE
$73,610.64 Los Angeles, California
June 3, 1999
FOR VALUE RECEIVED, the undersigned, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, promises to pay to
the order of ▇▇▇▇▇ ▇▇▇▇▇▇▇ the sum of Seventy-Three Thousand Six Hundred Ten
Dollars and Sixty-Four Cents ($73,610.64), together with interest from the date
hereof on the unpaid principal, as it exists from time to time, at the rate of
5 1/2% per annum.
Interest shall be paid annually and principal shall be paid on or before
ten (10) years from the date of this Non-Recourse Promissory Note.
Payment shall be paid in lawful money of the United States. The undersigned
shall have the right to prepay all or any portion due hereunder at any time and
from time to time without any penalty whatsoever. Each payment made hereunder
shall be credited first to interest then due and the remainder to principal.
If the undersigned shall default in any payment due hereunder, then, at the
option of the holder of this Non-Recourse Promissory Note, the entire amount of
outstanding principal and interest due shall immediately become due and payable.
If action be instituted on this Non-Recourse Promissory Note, the undersigned
promises to pay reasonable attorneys' fees and court costs.
This Non-Recourse Promissory Note is secured by the terms of a certain
Stock Pledge Agreement of even date herewith entered into between the
undersigned and the payee hereunder. This Non-Recourse Promissory Note is non-
recourse and the undersigned shall have no personal liability beyond that which
the holder of this Non-Recourse Promissory Note receives upon the sale of the
collateral under the aforesaid Stock Pledge Agreement.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
STOCK PLEDGE AGREEMENT
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THIS STOCK PLEDGE AGREEMENT ("Agreement") is made and entered into this
3/rd/ day of June, 1999, by and between ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("Debtor") and ▇▇▇▇▇
▇▇▇▇▇▇▇ ("Secured Party"), with reference to the following facts:
A. Debtor has executed and delivered to Secured Party a Non-Recourse
Promissory Note of even date herewith in the original principal amount of
$73,610.64 ("Note").
B. Debtor desires to enter into this Agreement to secure payment and
performance of his obligations under the Note.
NOW, THEREFORE, for valuable consideration, Debtor and Secured Party agree
as follows:
1. Definitions. For purposes of this Agreement, the following terms shall
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have the following definitions:
1.1 "Collateral" means 920,133 shares of common stock of Grand Havana
Enterprises, Inc., a Delaware corporation, owned or held by Debtor, all cash,
additional securities and other property at any time and from time to time
receivable or otherwise distributed in respect of or in exchange for any of the
Collateral, and all proceeds of the foregoing.
1.2 "Event of Default" means any event of default specified in Section 5
herein.
1.3 "Obligations" means payment and performance of all obligations of
Debtor under the Note.
2. Grant of Security Interest. To secure the Obligations, Debtor hereby
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grants and assigns to Secured Party a present and continuing security interest
in the Collateral.
3. Debtor's Covenants.
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3.1 Further Assurances. The security interest granted by Debtor
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hereunder, at all times, shall be perfected and prior to any other interests in
the Collateral. Debtor shall take all actions which may be reasonably necessary
or appropriate to maintain, preserve, protect and defend the Collateral and
Secured Party's security interest therein, including all such actions as may be
reasonably requested by Secured Party. Upon Secured Party's request, Debtor
shall execute and deliver to Secured Party such further documents and
agreements, in form and substance satisfactory to Secured Party, as Secured
Party may require to effectuate this Agreement or to evidence, perfect,
maintain, preserve or protect Secured Party's security interest in the
Collateral, including without limitation financing statements, continuation
financing statements, financing statement amendments, security agreements and
assignments.
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3.2 Deliveries. Debtor shall deliver to Secured Party the certificate
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and any other certificates evidencing the Collateral as soon as possible after
the execution of this Agreement and shall deliver, immediately upon receipt by
Debtor from any party of any securities that constitute Collateral, such
securities to the Secured Party, together with duly executed stock powers in
blank with a signature guarantee provided by a member of the New York Stock
Exchange or such other party satisfactory to Secured Party. In the event of any
non-cash distribution with respect to such Collateral (whether by way of stock
dividends, stock splits or recapitalization), the property so distributed shall
be delivered to the Secured Party to be held as additional Collateral under this
Agreement.
3.3 Negative Covenants. Without Secured Party's prior written consent,
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Debtor shall not sell, transfer, assign, pledge, mortgage, encumber, hypothecate
or otherwise dispose of or abandon any or all of the Collateral.
3.4 Voting Rights. So long as there shall exist no Event of Default,
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Debtor shall be entitled to exercise his rights to voting power with respect to
all Collateral pledged under this Agreement. Upon an Event of Default, Secured
Party acting alone may exercise voting rights with respect to the Collateral and
may cause the Collateral to be reissued in Secured Party's name to facilitate
the exercise of such voting rights.
4. Warranties and Representations. Debtor warrants and represents to
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Secured Party that:
(a) Debtor has the full power and authority to enter into this
Agreement, to grant to Secured Party the security interest in the Collateral as
provided herein, and to perform all of his other obligations under this
Agreement; and
(b) Debtor is the sole owner of and has good and marketable title to
the Collateral, and the Collateral is free and clear and shall at all times
remain free and clear of all claims, demands, rights, liens, security interests
and encumbrances, other than the security interest granted to Secured Party
under this Agreement.
5. Event of Default.
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The occurrence of any of the following events or conditions shall
constitute and is hereby defined to be an "Event of Default":
(a) Any failure to make any payment on the date that such payment is
due under the Note;
(b) The sale, lease, transfer, assignment, pledge, mortgage,
encumbrance, hypothecation or other disposal of or abandonment of any or all of
the Collateral without the prior written consent of Secured Party;
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(c) Any failure or neglect to perform or observe any of the other
terms, provisions, or covenants of this Agreement;
(d) Any warranty, representation or statement contained in this
Agreement or any other document or agreement executed or delivered in connection
with the Obligations that shall be or shall prove to have been materially false
when made or furnished;
(e) The filing by Debtor (or against Debtor in which Debtor
acquiesces or which is not dismissed within thirty (30) days after the filing
thereof) of any proceeding under the federal bankruptcy laws now or hereafter
existing or any other similar statute now or hereafter in effect; the entry of
an order for relief under such laws with respect to Debtor; or the appointment
of a receiver, trustee, custodian or conservator of all or any part of the
assets of Debtor;
(f) The insolvency of Debtor; or the execution by Debtor of an
assignment for the benefit of creditors; or the convening by Debtor of a meeting
of his creditors, or any class thereof, for purposes of effecting a moratorium
upon or extension or composition of his debts; or the failure of Debtor to pay
his debts as they mature; or if Debtor is generally not paying his debts as they
mature;
(g) The admission in writing by Debtor that he is unable to pay his
debts as they mature or that he is generally not paying his debts as they
mature; and
(h) The institution of any legal action or proceedings to enforce a
lien or security interest in any portion of the Collateral that is not dismissed
to the satisfaction of Secured Party within fifteen (15) days of such
institution.
6. Remedies Upon Default. Upon the occurrence of any Event of Default,
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Secured Party shall, in addition to all other rights and remedies provided
hereunder or any document or agreement referred to herein, have the following
rights and remedies:
6.1 Uniform Commercial Code. Secured Party shall have all of the rights
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and remedies of a secured party under the California Uniform Commercial Code and
under all other applicable laws.
6.2 Acceleration. Secured Party may declare any or all of the
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Obligations to be immediately due and payable, to the extent that such
Obligations are not already due and payable by their terms.
6.3 Sale of Collateral. Secured Party may sell or dispose of the
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Collateral at public or private sale, in one or more sales, as a unit or in
parcels, at wholesale or retail, and at such time and place and on such terms as
Secured Party may determine. Secured Party may be the purchaser of any or all of
the Collateral at any public or private sale. If, at any time when Secured Party
shall determine to exercise his right to sell all or any part of the Collateral
and such Collateral, or the part thereof to be sold, he has been advised by
legal counsel or himself determines that the
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Collateral is subject to the Securities Act of 1933 as amended or any state
securities laws, Secured Party in his sole and absolute discretion, is hereby
expressly authorized to sell such Collateral, or any part thereof, subject to
obtaining all required regulatory approvals, by private sale in such manner and
under such circumstances as Secured Party may deem necessary or advisable in
order that such sale may be effected legally without registration or
qualification under applicable securities laws (including without limitation
without any obligation to advertise). Without limiting the generality of the
foregoing, Secured Party, in his sole and absolute discretion, may approach and
negotiate with a restricted number of potential purchasers to effect such sale
or restrict such sale to a purchaser or purchaser who will represent and agree
that such purchaser or purchasers are purchasing for his or their own account,
for investment only, and not with a view to the distribution or sale of such
Collateral or any part thereof. Any such sale shall be deemed to be a sale made
in a commercially reasonable manner within the meaning of the Uniform Commercial
Code of the State of California and Debtor hereby consents and agrees that
Secured Party shall incur no responsibility or liability for selling all or any
part of the Collateral at a price which is not unreasonably low, notwithstanding
the possibility that a higher price might be realized if the sale were public.
Any public sale of any or all of the Collateral may be postponed from time to
time by public announcement at the time and place last scheduled for the sale.
6.4 Commercially Reasonable Sale. Without limiting the generality of
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this Section 6, Secured Party shall conclusively be deemed to have made a
commercially reasonable disposition of any or all of the Collateral if Secured
Party holds a public or private sale of such Collateral at least (5) five days
after notice is given to Debtor of the date fixed for any public sale or the
date on or after which any private sale or other disposition of the Collateral
is to be made by Secured Party; with respect to any public sale, the sale is
held at least five (5) days after notice is published in a newspaper of general
circulation in the City of Los Angeles, California; and without respect to any
public disposition, the sale is held any time between the hours of 8 a.m. and 5
p.m. at any place designated by Secured Party or the sale is made by a licensed
securities broker or dealer through the placement of a "sell" order at the then
current market price. Without limiting the generality of this Section 6, it
shall conclusively be deemed to be commercially reasonable for Secured Party to
direct any prospective purchaser of any or all of the Collateral to Debtor to
ascertain all information concerning the status of Grand Havana Enterprises,
Inc. Secured Party's disposition of any or all of the Collateral in any manner
which differs from the procedures specified in this Section 6 shall not be
deemed to be commercially unreasonable.
6.5 Protection of Collateral. Secured Party may discharge claims,
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demands, liens, security interests, encumbrances and taxes affecting any or all
of the Collateral and take such other actions as Secured Party determines to be
necessary or appropriate to protect the Collateral and Secured Party's security
interest therein. Secured Party, without releasing Debtor or any other party
from any of the Obligations and without any obligation to do so, may perform any
of the Obligations in such manner and to such extent as Secured Party determines
to be necessary or appropriate to protect the Collateral and Secured Party's
security interest therein.
6.6 Proceeds. The proceeds of any sale or disposition of the Collateral
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by Secured Party shall be applied in the following order of priority:
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(a) First, to all liabilities, obligations, costs, and expenses,
including without limitation reasonable attorneys' fees and costs, incurred by
Secured Party in exercising any of his rights or remedies under this Agreement,
including without limitation the costs and expenses of retaking, holding, and
selling any or all of the Collateral and the costs and expenses of enforcing and
collecting upon any or all of the Collateral;
(b) Second, to the payment of the Obligations in such order and
amounts as Secured Party may determine in his sole and absolute discretion; and
(c) Third, the surplus, if any, shall be paid to Debtor or any other
party legally entitled thereto.
7. No Liability for Deficiency. Debtor shall not be liable for any
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deficiency remaining on the Obligations after any disposition of any or all of
the Collateral. Secured Party's sole recourse against Debtor in the Event of
Default shall be against the Collateral.
8. Power of Attorney. Debtor irrevocably appoints Secured Party, with full
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power of substitution, as Debtor's attorney-in-fact, coupled with an interest,
with full power, in Secured Party's own name or in the name of Debtor:
(a) Upon the occurrence of any Event of Default, to endorse any
checks, drafts, money orders, notes, and other instruments or documents
representing Collateral proceeds or evidencing payment on account of any or all
of the Collateral;
(b) Upon the occurrence of any Event of Default, to pay or discharge
claims, demands, liens, security interests, encumbrances, or taxes affecting or
threatened against any or all of the Collateral;
(c) Upon the occurrence of any Event of Default, to receive payment
of all Collateral proceeds;
(d) To commence, prosecute or defend any suit, action or proceeding
relating to any or all of the Collateral;
(e) Upon the occurrence of any Event of Default, to sell, transfer,
pledge, make any agreement with respect to, or otherwise deal with any or all of
the Collateral as though Secured Party were the owner thereof for all purposes;
and
(f) To execute any financing statement, continuation financing
statement, financing statement amendment, security agreement, assignment,
notice, or other document which Secured Party, in his sole and absolute
discretion, determines to be necessary or appropriate in order to perfect or
maintain Secured Party's first-priority security interest in the Collateral.
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Debtor acknowledges that Secured Party shall have no obligation to exercise any
of the foregoing rights.
9. Waivers. Debtor hereby waives presentment, demand for payment, protest,
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notice of demand, dishonor, protest and nonpayment, and all other notices and
demands in connection with the delivery, acceptance, performance, default under,
and enforcement of the Obligations. Debtor waives the right to assert any
statute of limitations as a defense to the enforcement of any of the Obligations
to the fullest extent permitted by law.
10. Relationship of Parties. Nothing contained in this Agreement
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constitutes or shall be construed as the formation of a partnership or joint
venture between Secured Party and Debtor or any other party; or the creation of
any confidential or fiduciary relationship of any kind between Secured Party and
Debtor or any other party. Secured Party shall not be deemed to be a partner,
joint venturer, trustee, or fiduciary with respect to Debtor or any other party
as a result of this Agreement or the transactions contemplated hereby.
11. Attorneys' Fees. Upon Secured Party's demand, Debtor shall reimburse
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Secured Party for all costs and expenses, including without limitation,
reasonable attorney's fees and costs, which are incurred by Secured Party,
whether before or after Debtor's default under this Agreement, in connection
with any or all of the following: the exercise of any or all of Secured Party's
rights and remedies under this Agreement or the enforcement of any obligation of
any other party liable to Secured Party in connection with the Obligations,
whether or not any legal proceedings are instituted by Secured Party; the
protection, preservation, management, operation, or maintenance of any or all of
the Collateral; the sale or disposition of any or all of the Collateral; or the
defense of any suit, action or proceeding by Debtor or any other party relating
to the Obligations.
12. Notices. All notices, requests and other communications hereunder shall
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be in writing and shall be delivered by courier or other means of personal
service, or sent by telecopy or by overnight mail or by Federal Express
addressed to:
If to Secured Party:
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Debtor:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
All notices, requests and other communications shall be deemed given on the date
of delivery, if given by personal service, or, if sent by overnight mail or air
courier, seventy-two (72) hours after
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delivery to the air courier to the address set forth above. Any party may change
their address for notices, requests and other communications by giving notice in
the manner specified above.
13. Interpretation. This Agreement shall be construed in accordance with
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and governed by the laws of the State of California. The headings to sections of
this Agreement are for convenience only, and they do not in any way limit or
amplify any of the terms of this Agreement and shall not be used in interpreting
this Agreement.
14. Entire Agreement. This Agreement contains the entire agreement between
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Secured Party and Debtor concerning the subject matter of this Agreement.
15. No Waiver by Secured Party. No waiver by Secured Party of any of his
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rights or remedies in connection with the Obligations or of any of the terms or
conditions of this Agreement shall be effective unless such waiver is in writing
and signed by Secured Party.
16. Amendment. This Agreement may be modified only by a written agreement
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signed by Debtor and Secured Party.
17. Successors. This Agreement shall be binding upon and inure to the
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benefit of Debtor and Secured Party and their respective successors and assigns.
18. Counterparts. This Agreement may be executed in two (2) or more
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counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
"Debtor"
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
"Secured Party"
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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