<PAGE>
                                                                  EXHIBIT (10)-4

                               SECURITY AGREEMENT
                               ------------------



     This Security Agreement ("Agreement") is entered as of the 30th of
September, 1998  by Grand Havana Enterprises, Inc., a Delaware corporation,
(the"Debtor"), and United Leisure Corporation, a Delaware corporation (the
"Secured Party").


                                    RECITALS
                                    --------

     A.  The Secured Party has agreed to lend the Debtor the sum set forth in
the attached Secured Promissory Note (the "Replacement Note").

     B.  As a condition of Secured Party agreeing to accept the Replacement 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
       --------------
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,
       --------------------------
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-
<PAGE>

1.3    The Obligations.  The Collateral secures and will secure the prompt and
       ---------------
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 Replacement Note executed by the
Debtor and delivered to the Secured Party.

1.1    Representations, Warranties and Covenants.  Debtor acknowledges and
       -----------------------------------------
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
Replacement 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 and for a prior security interest
              in the Collateral granted in favor of Harry Shuster dated as of
              August 15, 1998 securing payment of a promissory note in the
              principal face amount of Three Hundred Thousand and no/100 Dollars
              ($300,000.00). 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
              except to the extent that such prior interest is disclosed herein.
              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.

                                    Page -2-
<PAGE>

        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.

        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

                                    Page -3-
<PAGE>

              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).

        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
       -----------------------
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

                                    Page -4-
<PAGE>

              amount so paid or advanced by Secured Party shall be secured by
              the Collateral and shall be repayable by Debtor on demand.

        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, sue 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"
       -----------------
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 Replacement Note;

                                    Page -5-
<PAGE>

        B.    Any representation or warranty made in this Agreement or the
              Replacement Note shall prove false or misleading in any material
              respect, or Debtor shall fail to perform any covenant, agreement
              or undertaking under this Agreement or the Replacement 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
       ------------------------------
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 Replacement 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

                                    Page -6-
<PAGE>

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 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
       ----------------------
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

                                    Page -7-
<PAGE>

              Secured Party shall not incur any liability if any such purchaser
              shall fail to 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

                                    Page -8-
<PAGE>

              reasonable cost of any investigation) which any of them may incur
              in 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 faith deems itself bound to perform, shall
              be treated as a sale of

                                    Page -9-
<PAGE>

              such Collateral and Secured Party shall be free to carry out such
              agreement. 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
       ----------------
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
       --------
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 Replacement 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

                                   Page -10-
<PAGE>

of the Obligations immediately upon Secured Party's receipt thereof, with the
same force and 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
       ----------------------
arising under this Agreement or the Replacement 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
       -------
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.
1990 Westwood Blvd.
Los Angeles, CA.

Secured Party:

United Leisure Corporation
1990 Westwood Blvd.
Los Angeles, CA.

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
       --------------
of Secured Party and its successors and assigns and shall be binding upon Debtor
and Debtor's permitted successors and assigns.

                                   Page -11-
<PAGE>

1.14   Term.  This Agreement shall take effect when signed by Debtor and
       ----
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,
       --------------
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
       -----------------
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
       -------------
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 30th day of September, 1998.

DEBTOR:

Grand Havana Enterprises, Inc.

  /s/  Harry Shuster
-----------------------------------------
By: Harry Shuster
Its:President

                                   Page -12-
<PAGE>

                                  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 Beverly 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.

                                   Page -13-