Contribution Agreement

EXHIBIT 10.10


CONTRIBUTION AGREEMENT


June __, 1997


Board of Directors 800-JR Cigar, Inc. 301 Route 10 East Whippany, N.J. 07981-2104


Ladies and Gentlemen:


1. Contributions. Each of the undersigned (each a "Subscriber" and collectively the "Subscribers") desires to subscribe to the number of shares of common stock, par value $.01 per share ("Common Stock"), of 800-JR Cigar, Inc., a Delaware corporation (the "Company"), set forth opposite such Subscriber's name on attached Schedule A ("Company Shares"), and in exchange therefor contribute to the Company the number of shares of capital stock ("Constituent Entities Shares") of each of the corporations (each a "Constituent Entity" and collectively the "Constituent Entities") set forth opposite such Subscriber's name on attached Schedule B, all upon the terms and subject to the conditions hereinafter set forth. It is intended that the contributions by the Subscribers of the Constituent Entities Shares to be contributed by the Subscribers to the Company, which will occur in connection with an initial public offering by the Company of shares of Common Stock (the "Offering"), constitute tax-free capital contributions under Section 351 of the Internal Revenue Code of 1986, as amended, (the "Code").


2. Closing. The consummation of the contributions contemplated hereby (the "Closing") shall occur on a date (the "Closing Date") to be specified by the parties, which shall be no later than the fifth business day after satisfaction of the latest to occur of the conditions set forth in Section 6 at the offices of Morgan, Lewis & Bockius LLP, 101 Park Avenue, New York, New York 10178, unless another date or place is agreed to in writing by each of the parties hereto. At the Closing, the Company shall deliver to each Subscriber certificates for the Company Shares to be issued to such Subscriber as set forth on attached Schedule A against receipt of certificates for the Constituent Entities Shares to be contributed by such Subscriber as set forth on attached Schedule B duly endorsed or accompanied by duly executed stock powers, transferring ownership to the Company of the Constituent Entities Shares to be contributed by such Subscriber to the Company.


3. Representations and Warranties.


(a) Representations and Warranties of the Subscribers. Each
Subscriber severally and not jointly hereby represents and warrants to the
Company that such Subscriber:


(i) (x) owns the Constituent Entities Shares to be contributed by
such Subscriber to the Company free and clear of any lien, claim, security
interest or other encumbrance, including, without limitation, any
restriction on transfer and (y) has the full legal right, and any approval
required by law to contribute, transfer and deliver to the Company such
Constituent Entities Shares in the manner provided in this Agreement, and
upon delivery to the Company of the certificates for such Constituent
Entities Shares hereunder, the Company will acquire valid title to such
Constituent Entities Shares free and clear of any lien, claim, security
interest or other encumbrance.


(ii) (x) is acquiring the Company Shares to be issued to such
Subscriber for such Subscriber's own account for investment and not with a
view to the distribution thereof or with any present intention of selling
any thereof, (x) has been informed by the Company that the Company Shares
to be issued to such Subscriber have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), and understands
that such Company Shares must be held indefinitely unless subsequently
registered under the Securities Act or an exemption from such registration
is available and (z) is fully aware of the restrictions on disposing of
the Company Shares resulting from the provisions of the Securities Act and
the General Rules and Regulations of the Securities and Exchange
Commission (the "Commission") thereunder (including, without limitation,
Rule 144), and understands that, except as provided in Sections 4 and 5,
the Company is under no obligation to effect compliance with Regulation A
or any other exemption or to register the Company Shares to be issued to
such Subscriber.


(b) Representations and Warranties of the Company. The Company
represents and warrants to each Subscriber that the Company Shares to be
issued by the Company and delivered to each Subscriber hereunder have been
duly authorized and, when issued, delivered in the manner set forth in
this Agreement, will be validly issued, fully paid and nonassessable.


4. Certain Agreements.


(a) Tax Agreement. At or prior to the Closing, each of the
Subscribers and the Company shall, and the Company shall cause the
Constituent Entities to, enter into the Tax Agreement attached hereto as
Exhibit A.


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(b) Transferability. Prior to any sale, transfer, pledge or other
disposition of any Company Shares, each Subscriber shall give written
notice to the Company of such proposed sale, transfer, pledge or other
disposition and as to the circumstances thereof. Promptly upon receiving
such notice, the Company shall obtain from the Company's counsel and, if
the Company at its option so requests, such Subscriber will obtain from
such Subscriber's counsel and deliver to the Company, as promptly as
practicable, an opinion as to whether the proposed sale, transfer, pledge
or disposition may be effected without registration of such Company Shares
under the Securities Act. If in the opinion of each such counsel such
sale, transfer, pledge or disposition may be made in the manner described
in the notice thereof in compliance with applicable Federal and state
securities laws, such Subscriber may make such sale, transfer, pledge or
disposition. If either counsel shall fail to render an opinion to such
effect, such Subscriber shall not make such sale, transfer, pledge or
disposition unless and until registration of such Company Shares under the
Securities Act has become effective or is no longer required in the
opinion of the respective counsel.


Each certificate representing any of the Company Shares or
representing any shares issued in payment or distribution of any stock
dividend thereon, or split-up thereof, and each certificate, issued upon
any transfer or exchange of any such certificate, shall bear the following
legend unless, in the opinion of the Company's counsel, such legend is no
longer necessary to assure compliance with the Securities Act:


"The shares represented by this certificate have not been
registered under the Securities Act of 1933. The shares have been
acquired for investment and may not be pledged or hypothecated, and
may not be sold or transferred, in the absence of an effective
Registration Statement for the shares under the Securities Act of
1933 or an opinion of counsel to the Company that registration is
not required under the Securities Act of 1933."


The Company will enter appropriate stop-transfer orders on any register or
records maintained by or on behalf of the Company with respect to the
Company Shares to insure that the Company Shares are not transferred
except in accordance with this Agreement.


(c) Information; Public Filings. If at any time the Common Stock is
required to be registered under Section 12(b) or Section 12(g), whichever
is applicable, of the Securities Exchange Act of 1934, as amended (the
"Securities Exchange Act"), then thereafter the Company will:


(i) maintain effective a registration statement (containing such
information and documents as the Commission shall specify and otherwise
complying with the Securities Exchange Act), under Section 12(b) or
Section 12(g), whichever is applicable, of the Securities Exchange Act,
with respect to the Common Stock, and the


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Company will file as required such information, documents and reports as
the Commission may require or prescribe for companies whose stock has
been registered pursuant to such Section 12(b) or Section 12(g),
whichever is applicable; and


(ii) upon the request of any holder of Company Shares, make
whatever other filings with the Commission, or otherwise make generally
available to the public such financial and other information, as any such
holder may deem reasonably necessary or desirable in order to enable such
holder to be permitted to sell Company Shares pursuant to the provisions
of Rule 144.


5. Registration Rights. If, at any time following the first anniversary of the Closing Date, the Company shall determine to register any other shares of Common Stock under the Securities Act for its own account (other than on Form S-4 or Form S-8 or a comparable form), the Company will, at its expense:


(a) furnish prompt written notice thereof to each holder of the
Compan ...