DRAFT - JUNE 19, 1997
PREMIUM CIGARS INTERNATIONAL, LTD.
LOCK-UP AGREEMENT
June_, 1997
W.B. McKee Securities, Inc.
3003 North Central Avenue
Suite 100
Phoenix, Arizona 85012
Re: Lock-Up Agreement
Ladies and Gentlemen:
The undersigned understands that you, as representatives (the
"Representatives"), propose to enter into an Underwriting Agreement on behalf of
the several Underwriters named on [Schedule I] to such agreement (collectively,
the "Underwriters"), with Premium Cigars International, Ltd. (the "Company")
providing for an initial public offering of the Common Stock of the Company (the
"Shares") pursuant to a Registration Statement on Form SB-2 filed with the
Securities and Exchange Commission (the "SEC").
In consideration of the agreement by the Underwriters to offer and sell the
Shares, and of other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the undersigned agrees, for a
period of eighteen months from the effective date of the public offering of the
Shares, that the undersigned will not offer to sell, sell, contract to sell,
grant any option to purchase, make any short sale or otherwise dispose of any
Shares or any other securities of the Company that are substantially similar to
the Shares, including but not limited to any securities of the Company that are
convertible into or exchangeable for, or that represent the right to receive,
Common Stock of the Company or any such similar securities, whether now owned or
hereafter acquired, owned directly by the undersigned or with respect to which
the undersigned has beneficial ownership, within the rules and regulations of
the SEC (collectively, the "Undersigned's Shares").
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June ___ ,1997
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The foregoing restriction is expressly agreed to preclude the undersigned
from engaging in any hedging or other transaction which is designed to or
reasonably expected to lead to or result in a sale or disposition of the Shares
even if such Shares would be disposed of by someone other than the undersigned.
Such prohibited hedging or other transactions would include without limitation
any short sale or any purchase, sale or grant of any right (including without
limitation any put or call option) with respect to any of the Shares or with
respect to any security that includes, relates to or derives any significant
part of its value from such Shares.
Notwithstanding the foregoing, the undersigned may transfer the
Undersigned's Shares (i) as a bona fide gift or gifts, provided that the donee
or donees thereof agree to be bound by the restrictions set forth herein, (ii)
as a transfer to any trust for the direct or indirect benefit of the undersigned
or the immediate family of the undersigned, provided that the trustee of the
trust agrees to be he bound by the restrictions set forth herein, and provided
further that any such transfer shall not involve a disposition for value, or
(iii) with the prior written consent of [ ] on behalf of the Underwriters. For
purposes of this Lock-Up Agreement, "immediate family" shall mean any
relationship by blood, marriage or adoption, not more remote than first cousin.
The undersigned also agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent and registrar against the
transfer of the Undersigned's Shares except in compliance with the foregoing
restrictions.
The undersigned understands that the Company and the Underwriters are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
offering. The undersigned further understands that this Lock-Up Agreement is
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns.
Very truly yours,
Name of Stockholder: ________________________
Signature: __________________________________
Title: ______________________________________