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                                                                  EXHIBIT (10)-1
                             SETTLEMENT AGREEMENT


     THIS SETTLEMENT AGREEMENT (the "Agreement") is made the 13/th/ day of
April, 1999, by and among COWRIE HOLDINGS, LTD. ("Cowrie"), STRATA EQUITIES
LIMITED ("Strata"), SPARTA CAPITAL LTD. ("Sparta"), BAYTREE CAPITAL ASSOCIATES
LLP ("Baytree Capital"), BAYTREE ASSOCIATES, INC. ("Baytree Associates"), and
MICHAEL GARDNER ("Gardner"), (collectively, the "Baytree and Offshore Parties"),
and HARRY SHUSTER ("Harry"), BRIAN SHUSTER ("Brian"), STANLEY SHUSTER
("Stanley"), and GRAND HAVANA ENTERPRISES, INC. ("Grand Havana") (collectively,
the "Shuster Parties").  (The Baytree and Offshore Parties and the Shuster
Parties are collectively referred to herein as the "Parties").

     WHEREAS, on or about February 16, 1998, Cowrie purchased by private
placement 1,200,000 shares of Grand Havana common stock and a warrant to
purchase 1,200,000 additional shares of Grand Havana common stock at an exercise
price of $0.30 per share (the "Grand Havana Warrant"), which warrant contained
an anti-dilution provision so that neither the exercise price of the warrant nor
the number of shares of common stock that the warrant entitled the holder to
purchase would be affected by any reverse split with respect to Grand Havana's
common stock.

     WHEREAS, in total the Baytree Offshore Parties, including Cowrie, owned
2,787,168 shares of Grand Havana common stock, and now own 2,514,368 shares of
Grand Havana common stock.

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     WHEREAS, certain disputes have arisen between the Parties in connection
with the management of Grand Havana, from which the Baytree and Offshore Parties
have alleged certain improprieties and breaches of fiduciary duty against the
Shuster Parties.  The Shuster Parties have denied any impropriety or breach of
fiduciary duty.  In this regard, Cowrie has commenced an action against Harry,
Harvey Bibicoff, Stanley, and Grand Havana, in Delaware Chancery Court for a
declaratory judgment, injunctive relief, and, in the alternative, for damages
for breach of fiduciary duty and breach of contract alleging Grand Havana's
failure to effect a reverse stock split declared and authorized by the Board of
Directors of Grand Havana and allegedly consented to by the holders of not less
than 51% of the Company's common stock (the "Delaware Action").

     WHEREAS, without any admission of liability, the Parties are desirous of
settling their disputes, of settling and dismissing the Delaware Action, as
against each other with prejudice, and of releasing any and all claims which
they possess each against the other.

     WHEREAS, as a condition of such settlement, and upon the terms and
conditions hereinafter provided, Cowrie is willing to dismiss with prejudice the
Delaware Action as against Harry, Harvey Bibicoff, Stanley, and Grand Havana.

     NOW, THEREFORE, in consideration of the mutual promises herein contained,
the Parties agree as follows:

     1.  The Stock Transfer
         ------------------

         The Baytree and Offshore Parties agree to convey, transfer and assign
the

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2,514,368 shares of Grand Havana common stock (the "Grand Havana Shares")
currently held by the Baytree and Offshore Parties and the Grand Havana Warrant
currently held by Cowrie to the Shuster Parties and/or their designees.

          Grand Havana hereby grants to the Baytree and Offshore Parties and/or
their designees a Ten Thousand Dollar ($10,000.00) allowance which may be used
to purchase food, beverages and/or merchandise in the normal course of business
at the Grand Havana Room in New York City; provided, however, said allowance
shall expire on October 13, 1999 and may not be used for private parties.

     2.   Representations.
          ----------------

          (a) The Baytree and Offshore Parties represent and warrant that they
are the record and beneficial owners of the Grand Havana Shares and the Grand
Havana Warrant free and clear of all liens, claims, and encumbrances.

          (b) The Baytree and Offshore Parties represent that they currently
hold only a total of 2,514,368 shares of Grand Havana common stock along with
the Grand Havana Warrant.

     3.   Releases.
          ---------

          (a) The Baytree and Offshore Parties and their officers, directors,
shareholders, successors, and assigns, release and forever discharge the Shuster
Parties and their officers, directors, shareholders, successors, and assigns
from any and all actions, causes of action, suits, debts, dues, sums of money,
accounts, reckonings, bonds, bills, specialties,

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covenants, contracts, controversies, agreements, promises, variances,
trespasses, damages, judgments, extents, executions, claims, and demands
whatsoever, in law, known and unknown, admiralty or equity ("Claims"), which the
Baytree and Offshore Parties or their officers, directors, shareholders,
successors, and assigns, ever had, now have or hereafter can, shall or may, have
against the Shuster Parties and their officers, directors and shareholders, for,
upon, or by reason of any or all of the Baytree and Offshore Parties'
investments in Grand Havana as well as the disputes described in this Agreement
from the beginning of the world to the day of the date of this Agreement; and

          (b) Upon receipt of the Grand Havana Stock and Warrant, the Shuster
Parties and their officers, directors, shareholders, successors, and assigns,
release and forever discharge the Baytree and Offshore Parties and their
officers, directors, shareholders, successors, and assigns from any and all
actions, causes of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, contracts, controversies,
agreements, promises, variances, trespasses, damages, judgments, extents,
executions, claims, and demands whatsoever, known and unknown, in law, admiralty
or equity ("Claims"), which the Shuster Parties, or their officers, directors,
shareholders, successors, and assigns, ever had, now have or hereafter can,
shall or may, have against the Baytree and Offshore Parties, for, upon, or by
reason of any or all of the Baytree and Offshore Parties' investments in Grand
Havana as well as the disputes described in this Agreement from the beginning of
the world to the day of the date of this Agreement.

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          (c) The Parties acknowledge that each may hereafter discover facts
different from or in addition to those known or believed to be true with respect
to the Claims and agree that this Agreement shall be and remain effective in all
respects notwithstanding any such differences or additional facts.

          (d) The Parties warrant that no assignment of the Claims has been made
and they agree to indemnify and hold the others harmless against any assignment
of the Claims.

     3.   Dismissal of Delaware Action.  Within five (5) business days after
          -----------------------------
the execution of this Agreement, Cowrie will execute, deliver, and promptly
thereafter will file, a notice of dismissal of the Delaware Action, with
prejudice and without costs as to either party.

     4.   General Representations and Warranties. Each of the Parties represents
          ---------------------------------------
and warrants to the other Party that no provision of its certificate of
incorporation or by-laws, in the case of corporate parties, or of any agreement,
instrument or understanding to which it is a party or by which it is bound, has
been or will be violated by the execution by it of this Agreement or the
performance or satisfaction of any agreement or condition herein contained upon
its part to be performed or satisfied, and all requisite corporate and other
authorizations for such execution, delivery, performance and satisfaction have
been duly obtained.  This Agreement will upon execution and delivery be a valid
and binding obligation of such party, enforceable in accordance with its terms.

     5.   Notices.  All notices, requests, demands, and other communications
          --------
hereunder shall be in writing and shall be deemed to have been duly given on the
date of delivery if (a) delivered by hand delivery, (b) mailed, postage pre-
paid, certified mail, return receipt

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requested, (c) delivered by overnight courier, or (d) delivered by telecopy, as
follows:

COWRIE HOLDINGS, LTD.
STRATA EQUITIES LIMITED
SPARTA CAPITAL LTD.
BAYTREE ASSOCIATES, INC.
BAYTREE CAPITAL ASSOCIATES LLC
MICHAEL GARDNER
c/o Camhy Karlinsky & Stein LLP
1740 Broadway, 16/th/ Floor
New York, New York 10016
(212) 977-6600
(212) 977-8389 (fax)

HARRY SHUSTER
BRIAN SHUSTER
STANLEY SHUSTER
GRAND HAVANA ENTERPRISES, INC.
c/o Law Offices of Richman, Lawrence, Mann, Chizever & Phillips
9601 Wilshire Boulevard, Penthouse
Beverly Hills, California 90210-5270
(310) 274-8300
(310) 274-2831 (fax)

and/or to such other person(s) and address(es) as either Party shall have
specified in writing to the other.

     6.  Survival.  The representations, warranties, covenants and agreements of
         ---------
the Parties contained in this Agreement or otherwise made in writing by any of
them or on their behalf pursuant hereto or otherwise made in connection with the
transactions contemplated hereby shall survive the signing hereof and the
transactions which take place in conjunction therewith and shall not be affected
by any investigation by either of the Parties hereto or by any knowledge
obtained as a result thereof or otherwise obtained.

     7.  Waivers.  Any waiver of any terms or conditions or of the breach of any
         --------

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covenant, representation or warranty of this Agreement, in any one instance,
shall not operate as or be deemed to be or construed as a further or continuing
waiver of any other breach of such terms, conditions, covenant, representation
or warranty, nor shall any failure at any time or times to enforce or require
performance of any provision hereof operate as a waiver of or affect in any
manner such Party's right at a later time to enforce or require performance of
such provision or of any other provision hereof; provided, however, that no such
written waiver, unless it, by its own terms, explicitly provides to the
contrary, shall be construed to effect a continuing waiver of the provision
being waived and no such waiver in any instance shall constitute a waiver in any
other instance or for any other purpose or impair the right of the Party against
whom such waiver is claimed in all other instances or for all other purposes to
require full compliance with such provision.

     8.  Amendments and Modifications.  This Agreement contains the entire
         -----------------------------
agreement of the Parties with respect to the subject matter hereof and may not
be amended, nor shall any waiver, change, modification, consent or discharge be
effected, except by an instrument in writing executed by or on behalf of the
Party against whom

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enforcement of such amendment, waiver, change, modification, consent or
discharge is sought.

     9.  Further Actions.  At any time and from time to time, each party agrees,
         ----------------
without further consideration, to take such actions and to execute and deliver
such documents as may be reasonably necessary to effectuate the purposes of this
Agreement, including, but not limited to, the stock purchase agreements, the
warrants, the releases, and the notice of dismissal, and including but not
limited to a certificate from a duly-authorized officer of each Party, other
than the individual parties, attesting to the due authority and the office held
by each signatory to this Agreement.

     10. Assignment; Successors and Assigns.  This Agreement shall not be
         -----------------------------------
assignable by any Party.  This Agreement shall be binding upon and shall inure
to the benefit of the Parties hereto and their respective successors or
permitted assigns.  Nothing in this Agreement expressed or implied is intended
to confer upon any person (other than the Parties) any rights or remedies.

     11. Choice of Law.  This Agreement shall be governed by and construed and
         --------------
enforced in accordance with the laws of the State of New York, without giving
effect to conflict of laws.

     12. Choice of Forum.  Any action to enforce, arising out of, or relating
         ----------------
in any way to, any of the provisions of this Agreement shall be brought and
prosecuted only in the Supreme Court of the State of New York, County of New
York, and the Parties consent to the

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jurisdiction of such court.

     13.  Counterparts.  This Agreement may be executed by facsimile and in two
          -------------
or more counterparts, all of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     14.  Section and Other Headings.  The headings contained in this Agreement
          ---------------------------
are for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.

     15.  Joint Preparation and Representation by Counsel.  The Parties
          ------------------------------------------------
acknowledge that this Agreement was prepared by them jointly, and that each
party was represented by counsel in connection therewith.  No presumption shall
arise from this Agreement against the drafter of any particular provision
hereof.

     IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their respective duly authorized officers as of the date first stated above.

                                    COWRIE HOLDINGS, LTD.


                                    By:          /s/ E. Mory
                                       -----------------------------------


                                    STRATA EQUITIES LIMITED


                                    By:          /s/ E. Mory
                                        ----------------------------------


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                                SPARTA CAPITAL LTD.


                                By:          /s/ E. Mory
                                   -----------------------------------


                                BAYTREE ASSOCIATES, INC.


                                By:        /s/ Michael Gardner
                                    ----------------------------------


                                BAYTREE CAPITAL ASSOCIATES LLC


                                By:        /s/ Michael Gardner
                                    ----------------------------------



                                          /s/ Michael Gardner
                                --------------------------------------
                                MICHAEL GARDNER


                                         /s/ Harry Shuster
                                --------------------------------------
                                HARRY SHUSTER


                                        /s/ Brian Shuster
                                --------------------------------------
                                BRIAN SHUSTER


                                       /s/ Stanley Shuster
                                --------------------------------------
                                STANLEY SHUSTER


                                GRAND HAVANA ENTERPRISES, INC.


                                By:      /s/ Harry Shuster
                                   -----------------------------------

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