AGREEMENT
THIS AGREEMENT (this "Agreement") is made and entered into as of June
20, 1997 by and between Xxxxxx X. Xxxxxxxxx, Xxxx X. Xxxxxxxxx and Xxxxx X.
Xxxxx (collectively "Seller"), Xxxxxxx X. Xxxxxxx ("Xxxxxxx") and Premium Cigars
International, Inc. ("PCI").
WHEREAS, Xxxxxxx desires to purchase from Seller, and Seller desires to
sell to Xxxxxxx, SIXTY SIX THOUSAND (66,000) post-split (reflecting a 3:1 stock
split on May 31, 1997) shares of Common Stock, no par value (the "Shares"), of
PCI to be paid for in cash. The Shares sold by Seller shall be provided as
follows:
Xxxxxx X. Xxxxxxxxx 60,000 shares
Xxxx X. Xxxxxxxxx 3,000 shares
Xxxxx X. Xxxxx 3,000 shares
AND WHEREAS, PCI desires to secure Anthony's commitment to serve as a
director, contingent upon shareholder approval, for up to a five-year period
following the completion of the initial public offering ("IPO") and Xxxxxxx
desires to receive certain stock options in exchange for such commitment;
NOW THEREFORE, in consideration of the covenants, agreements,
warranties and representations contained in this Agreement, the parties agree as
follows:
1. Agreement to Purchase. Subject to the terms and conditions set forth
below, Xxxxxxx agrees to purchase from Seller, and Seller agrees to sell to
Xxxxxxx the Shares for a cash payment of $22,000 and his agreement to become
Chairman of the Board of Directors of PCI upon completion of its initial public
offering. The purchase and sale of the Shares shall be consummated at a closing
(the "Closing") to occur on such date as the Seller and Xxxxxxx shall agree, but
which date shall be no later than June 21, 1997. At the Closing, Xxxxxxx shall
pay the purchase price to the Seller in immediately available funds. Upon
receipt, Seller shall surrender the Shares to Xxxxxxx with a duly executed stock
power to effect the transfer to Xxxxxxx.
2. Stock Option Grant. Subject to the approval of PCI's Board of
Directors, as set forth below, PCI grants Xxxxxxx a non-qualified option to
purchase 20,000 post-split shares of PCI Common Stock at the price printed in
the Prospectus relating to the IPO. Such option may be exercised from the
effective date of the IPO and for a one (1) year period thereafter. Xxxxxxx
acknowledges that, upon exercise, the shares purchased will be restricted shares
within the meaning of Rule 144 pursuant to the Securities Act of 1933, as
amended and that such shares may not be resold unless they are registered or
unless an exemption from registration is available.
3. Director and Officer Insurance. PCI agrees to obtain, within thirty
(30) days after the completion of the IPO, director and officer insurance for
all of its officers and directors
at such coverage scope and levels which are in accord with industry standards
for distributing companies comparable to PCI.
4. Commitment to Serve as a Director. Subject to ongoing shareholder
and/or Board of Director approval, according to the provisions of PCI's Bylaws
and until his successor is elected and qualified, Xxxxxxx agrees to serve as a
director and Chairman of the Board of Directors beginning immediately and for a
period of up to five (5) years following the date of this Agreement.
5. Representations, Warranties and Covenants of the Seller. The Seller
represents, warrants and covenants with Xxxxxxx as follows:
5.1. The Seller has full power and authority to enter into
this Agreement and sell the Shares.
5.2. All statements made in this Agreement are true, correct
and complete as of the date of this Agreement.
6. Representations, Warranties and Covenants of Xxxxxxx. Xxxxxxx
represents and warrants to the Seller as follows:
6.1 I have such knowledge and experience that I am capable of
evaluating the relative risks and merits of the purchase of the Shares.
6.2 The address set forth below is my true and correct
address.
6.3 The Shares which I am purchasing are being acquired solely
for my own account, for investment and are not being purchased with a
view to or for their resale or distribution. In order to induce the
Seller to sell the Shares to me, the Seller will have no obligation to
recognize the ownership, beneficial or otherwise, of the Shares by
anyone but me.
6.4 All documents, records and books relating to PCI and the
Shares requested by me, including all pertinent records of PCI,
financial and otherwise, have made available or delivered to me.
6.5 I have had an opportunity to ask questions of and receive
answers from the Seller and PCI's officers and representatives
concerning PCI's affairs generally and the terms and conditions of my
proposed purchase of the Shares.
6.6 My decision regarding the purchase of the Shares is based
primarily on what I understand of the concept of PCI's business (which
understanding may be mistaken or flawed), and not on its assets,
liabilities or results to date.
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6.7 I am buying the Shares based solely upon my own
investigation and evaluation of PCI.
6.8 The Shares have not been registered under the Securities
Act, nor have they been registered pursuant to the provisions of the
securities or other laws of applicable jurisdictions.
7. Exclusive Warranties. There are no agreements, warranties or
representations, express or implied, except those that are expressly set forth
herein. All agreements, representations and warranties contained in this
Agreement speak as of the date of this Agreement and shall survive the
consummation of the transactions contemplated hereby.
8. Miscellaneous.
8.1 Governing Law. This Agreement shall be governed by and
construed in accordance with the substantive law of the State of Arizona.
8.2 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and may be amended only by a writing executed by all parties.
8.3. Severability. If any provision hereof is invalid or
unenforceable in any jurisdiction, the other provisions hereof shall remain in
full force and effect in such jurisdiction and the remaining provisions will be
enforced to the maximum extent permitted by law and construed in a fashion to
effectuate best the provisions hereof, and the invalidity or unenforceability of
any provision hereof in any jurisdiction shall not effect the validity or
enforceability of any such provision in any other jurisdiction to the extent
that the remaining enforceable and valid provisions of this Agreement may be
construed in a fashion and act independently of the invalid or unenforceable
provisions to effectuate the intent of the parties as evidenced by this
Agreement.
8.4. Additional Documents. Xxxxxxx and Seller hereby agree to
execute such additional documents and to do such things as may be reasonably
required by the other party to implement the purposes of this Agreement.
The parties have executed this Agreement as of the date first set forth
above.
"SELLER" "Xxxxxxx"
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Xxxxxx X. Xxxxxxxxx Xxxxxxx X. Xxxxxxx
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Address: Address:
00000 Xxxxx 00xx Xxx 0000 Xxxxx 00xx Xxxxxx
Xxxxx 0 Xxxxxxxx Xxxxxx, Xxxxxxx 00000
Xxxxxxxxxx, Xxxxxxx 00000
------------------------------------
Xxxx X. Xxxxxxxxx
Address:
00000 Xxxxx 00xx Xxx
Xxxxx 0
Xxxxxxxxxx, Xxxxxxx 00000
------------------------------------
Xxxxx X. Xxxxx
Address:
00000 Xxxxx 00xx Xxx
Xxxxx 0
Xxxxxxxxxx, Xxxxxxx 00000
PREMIUM CIGARS INTERNATIONAL, INC.
By
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Xxxxxx X. Xxxxxxxxx, President
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