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OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
HOLT'S CIGAR HOLDINGS, INC.
AT $5.50 PER SHARE
BY
HCH ACQUISITION CORP.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON, DECEMBER 14, 2000, UNLESS THE OFFER IS EXTENDED.
November 14, 2000
To Our Clients:
Enclosed for your consideration are copies of the Offer to Purchase, dated
November 14, 2000 (the "Offer to Purchase"), and the related Letter of
Transmittal (which, as they may be amended and supplemented form time to time,
together constitute the "Offer") relating to the offer by HCH Acquisition Corp.
(the "Purchaser"), a Delaware corporation, to purchase all of the outstanding
shares of common stock (the "Shares"), par value, $0.001 per share, of Holt's
Cigar Holdings, Inc., a Delaware corporation (the "Company"), not already owned
by the Fuente Investment Partnership, a partnership whose interests are
beneficially owned by Carlos A. Fuente, Sr., Carlos P. Fuente, Jr. and Cynthia
Fuente Suarez and Robert G. Levin (collectively, the "Purchaser Stockholders"),
at a price of $5.50 per Share, net to the sellers in cash, without interest
thereon, upon the terms and subject to the conditions set forth in the Offer.
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. This material is being forwarded to
you as the beneficial owner of Shares carried by us in your account but not
registered in your name.
WE ARE (OR OUR NOMINEE IS) THE HOLDER OF RECORD OF SHARES HELD BY US FOR
YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF
RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED
TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD
BY US FOR YOUR ACCOUNT.
Accordingly, we request instruction as to whether you wish to have us
tender on your behalf any or all of the Shares held by us for your account
pursuant to the terms and conditions set forth in the Offer. 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. The Offer is conditioned upon the following, among other things: (a) a
majority of the outstanding Shares not currently owned by the Purchaser
Stockholders shall have been validly tendered and not withdrawn prior to the
expiration of the tender offer; (b) the Purchaser shall have available at the
expiration of the Offer the financing pursuant to a loan agreement dated
November 8, 2000, by and among the Purchaser and First Union National Bank; (c)
the Board of Directors of the Company and the special committee of independent
directors of the Company (the "Special Committee") shall not have withdrawn or
modified, in a manner adverse to the Purchaser, its approval of the Offer and
its recommendation that the stockholders of the Company tender their Shares
pursuant to the Offer; and (d) the absence of any materially adverse change in
the condition of the Company's business and any judicial and governmental action
prohibiting the Offer. The Offer also is subject to other terms and conditions.
See "THE OFFER, Section 12 -- Conditions to the Offer" of the Offer to Purchase.
4. 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
of 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 provided or
unless the required taxpayer identification information is provided. See
Instruction 9 of the Letter of Transmittal.
5. The Board of Directors of the Company, based upon among other factors,
the unanimous recommendation of the Special Committee, 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.
6. 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 Continental Stock Transfer & Trust Company, as depositary for
the Offer (the "Depositary") of (a) certificates evidencing the Shares (the
"Share Certificates") pursuant to the procedures set forth in
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"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.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
THURSDAY, DECEMBER 14, 2000, UNLESS THE OFFER IS EXTENDED.
If you wish to have us tender any or all of the Shares held by us for your
account please so instruct us by completing, executing, detaching and returning
to us the instruction form set forth herein. If you authorize the tender of your
Shares, all such Shares will be tendered unless otherwise specified below. An
envelope to return your instructions to us is enclosed.
YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO
SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION DATE. The Purchaser is
not aware of any state or jurisdiction where the making of the Offer is
prohibited by administrative or judicial action pursuant to any valid statute.
If the Purchaser becomes aware of any valid statute prohibiting the making of
the Offer or the acceptance of Shares pursuant thereto, the Purchaser will make
a good faith effort to comply with such statute or seek to have such statute
declared inapplicable to the Offer.
If, after such good faith effort, the Purchaser cannot comply with such
statute, the Offer will not be made to (nor will tenders be accepted from or on
behalf of) the holders of Shares in such state or jurisdiction. In any state or
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of the Purchaser by one or more registered brokers or dealers licensed
under the laws of such state of jurisdiction.
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INSTRUCTIONS WITH RESPECT TO THE OFFER
TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF
COMMON STOCK OF HOLT'S CIGAR HOLDINGS, INC.
The undersigned acknowledge(s) receipt of your letter, the enclosed Offer
to Purchase, dated November 14, 2000, and the related Letter of Transmittal
(which, as they may be amended and supplemented from time to time, together
constitute the "Offer") in connection with the offer by HCH Acquisition Corp.
(the "Purchaser"), a Delaware corporation, to purchase all of the outstanding
shares of common stock (the "Shares"), par value $0.001 per share, of Holt's
Cigar Holding's, Inc., a Delaware corporation (the "Company"), not already owned
by the Fuente Investment Partnership, a partnership whose interests are
beneficially owned by Carlos A. Fuente, Sr., Carlos P. Fuente, Jr., Cynthia
Fuente Suarez and Robert G. Levin (collectively, the "Purchaser Stockholders")
or the Purchaser, at a price of $5.50 per Share, net to the sellers in cash,
without interest thereon, upon the terms and subject to the conditions set forth
in the Offer.
The Offer is being made in connection with the Agreement and Plan of
Merger, dated as of November 8, 2000, among the Purchaser, the and the Purchaser
Stockholders and the Company.
This will instruct you to tender to the Purchaser the number of Shares
indicated below (or if no number is indicated below, all Shares) which are held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer.
Number of Shares to be Tendered*:
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Date:
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Account Number:
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SIGN HERE
Signature(s):
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(Print Name(s)):
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(Print Address(es)):
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(Area Code and Telephone Number(s)):
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(Taxpayer Identification or Social Security Number(s)):
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* Unless otherwise indicated, it will be assumed that all of your Shares held by
us for your account are to be tendered.
