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November 14, 2000
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by HCH Acquisition Corp. (the "Purchaser"), a
Delaware corporation, to act as Information Manager in connection with the
Purchaser's offer to purchase for cash all of the outstanding shares of common
stock (the "Shares"), par value $.001 per share, of Holt's Cigar Holdings, Inc.,
a Delaware corporation (the "Company"), not already owned by Robert G. Levin and
the Fuente Investment Partnership at a price of $5.50 per Share, net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated November 14, 2000 (the
"Offer to Purchase") and in the related Letter of Transmittal (which, as they
may be amended and supplemented from time to time, together constitute the
"Offer"), copies of which are enclosed herewith. The Offer is being made in
connection with the Agreement and Plan of Merger, dated as of November 8, 2000
(the "Merger Agreement"), among the Purchaser and the Purchaser Stockholders and
the Company. Holders of Shares whose certificates evidencing such Shares (the
"Share Certificates") are not immediately available or who cannot deliver their
Share Certificates and all other required documents to Continental Stock
Transfer & Trust Company, as depositary (the "Depositary"), or complete the
procedures for book-entry transfer, prior to the Expiration Date (as defined in
the Offer to Purchase) must tender their Shares according to the guaranteed
delivery procedures set forth in "THE OFFER, Section 3 -- Procedure for
Tendering Shares" of the Offer to Purchase.
Please furnish copies of the enclosed materials to those of your clients
for whose accounts you hold Shares in your name or in the name of your nominee.
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. The Offer to Purchase.
2. The Letter of Transmittal to tender Shares for your use and for the
information of your clients. Facsimile copies of the Letter of Transmittal
may be used to tender Shares.
3. The Notice of Guaranteed Delivery for Shares to be used to accept
the Offer if neither of the two procedures for tending Shares set forth in
"THE OFFER, Section 3 -- Procedure for Tendering Shares" of the Offer to
Purchase can be contemplated on a timely basis.
4. The Company's Solicitation/Recommendation Statement on Schedule
14D-9.
5. A printed form of the letter which may be sent to your clients for
whose accounts you hold Shares registered in your name or in the name of
your nominee, with space provided for obtaining such clients' instructions
with regard to the Offer.
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9.
7. A return envelope addressed to Continental Stock Transfer & Trust
Company (the "Depositary").
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
THURSDAY, DECEMBER 14, 2000 UNLESS THE OFFER IS EXTENDED.
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Please note the following:
1. The tender price is $5.50 per Share, net to the seller in cash,
without interest thereon.
2. The Offer is being made for all of the Shares, not already owned by
the Purchaser Stockholders.
3. Tendering holders of Shares will not be obligated to pay brokerage
fees or commissions or, except as otherwise provided in Instruction 6 of
the Letter Transmittal, transfer taxes on the purchase of Shares by the
Purchaser pursuant to the Offer. However, United States federal income tax
backup withholding at a rate of 31% may be required, unless an exemption is
available or unless the required tax identification information is
provided. See Instruction 9 of the Letter of Transmittal.
4. The Board of Directors of the Company, based upon among other
factors, the unanimous recommendation of a Special Committee of independent
directors of the Company, has unanimously approved the Merger Agreement and
the Offer and has determined that the terms of the Offer are fair to, and
in the best interests of, the Company's stockholders (other than the
Purchaser and the Purchaser Stockholders) and has unanimously recommended
that such stockholders accept the Offer and tender their Shares pursuant to
the Offer.
5. Notwithstanding any other provision of the Offer, payment for
Shares accepted for payment pursuant to the Offer will in all cases be made
only after timely receipt by the Depositary of (a) certificates evidencing
such Shares (the "Share Certificates") pursuant to the procedures set forth
in "The Offer, Section 3 -- Procedure for Tendering Shares" of the Offer to
Purchase, or a timely Book-Entry Confirmation (as defined in the Offer to
Purchase) with respect to such Shares, (b) the Letter of Transmittal (or a
manually signed facsimile thereof), properly completed and duly executed,
with any required signature guarantees or an Agent's Message (as defined in
the Offer to Purchase) in connection with a book-entry transfer, and (c)
any other documents required by the Letter of Transmittal. Accordingly,
payment may not be made to all tendering Holders at the same time depending
upon when Share Certificates are actually received by the Depositary. In
order to take advantage of the Offer, (i) a duly executed and properly
completed Letter of Transmittal (or a manually signed facsimile thereof)
and any required signature guarantee or other required documents should be
sent to the Depositary and (ii) Share Certificates representing the
tendered Shares or a timely Book-Entry Confirmation should be delivered to
the Depositary in accordance with the instructions set forth in the Letter
of Transmittal and the Offer to Purchase.
If Holders wish to tender, but if it is impracticable for them to forward
their Share Certificates or other required documents or complete the procedures
for book-entry transfer prior to the Expiration Date (as defined in the Offer to
Purchase), a tender may be effected by following the guaranteed delivery
Procedures specified in "The Offer, Section 3 -- Procedure for Tendering Shares"
of the Offer to Purchase.
The Purchaser will not pay any fees or commission to any broker, dealer or
other person for soliciting tenders of Shares pursuant to the Offer (other than
the Depositary and the Information Agent, as described in the Offer to
Purchase). The Purchaser will, however, upon request, reimburse you for
customary mailing and handling expenses incurred by you in forwarding any of the
enclosed materials to your clients. The Purchaser will pay or cause to be paid
any transfer taxes payable on the transfer of Shares to it, except as otherwise
provided in Instruction 6 of the Letter of Transmittal. Any inquiries you may
have with respect to the Offer should be addressed to D.F. King & Co., Inc., the
Information Agent, at its address and telephone number set forth on the back
cover of the Offer to Purchase. Additional copies of the enclosed materials may
be obtained from the Information Agent or from brokers, dealers, commercial
banks or trust companies.
Very truly yours,
D.F. King & Co., Inc.
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NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON AS THE AGENT OF THE PURCHASER, THE COMPANY, THE DEALER MANAGER,
THE DEPOSITARY, THE INFORMATION AGENT OR ANY AFFILIATE OF ANY OF THEM, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN STATEMENTS
EXPRESSLY MADE IN THE OFFER TO PURCHASE OR THE LETTER OF TRANSMITTAL.
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
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