DISTRIBUTORSHIP AGREEMENT


This Agreement  (hereinafter  the "Agreement") is made and executed in New York,
New York this 31st day of December, 1997 between Fabrica De Tabaco Valle Dorado,
SA ("hereinafter  "DR"), a Dominican Republic corporation with principal offices
at Zona Franca Licey Km 5 Carretera Stgo, Moca, Santiago,  D.R. and Gran Reserve
Corporation  Inc.,  a Nevada  corporation  (hereinafter  "GR"),  with  principal
offices at 40 Underhill Blvd., Syosset, NY 11791

                                   WITNESSETH

WHEREAS DR is a manufacturer of cigars in the Dominican Republic; and

WHEREAS DR is willing to grant exclusive distributorship and marketing rights in
the United States and elsewhere worldwide where requested; and

WHEREAS GR is a consumer product sales  distributor  based in the United States;
desires  to  sell  and   distribute   tobacco   products   developed   to  their
specifications (hereinafter the "Product"); and represents that it possesses the
ability to promote  the sale and use of the  Product  manufactured  by DR and is
desirous of  developing  demand for and  selling  such  Product on an  exclusive
basis; and

WHEREAS in order for DR to grant any distribution and marketing rights to GR, GR
must be  willing to accept  full  responsibility  for  obtaining  all  necessary
governmental  approvals and compliance with all further applicable  governmental
regulations,  except where the responsibility otherwise of DR therefor would not
be  allowed  by  law  to be  assigned  or  otherwise  transferred  to GR as  the
designated  distributor  and GR must  further be willing to indemnify DR against
any liability arising from failure to meet those responsibilities; and

WHEREAS  GR has  expressed  a  willingness  to accept  the  conditions  as above
outlined and purchase,  sell and otherwise  distribute  the Product on the terms
and   conditions   set  forth   herein,   and  DR  has  agreed  to  negotiate  a
distributorship contract with GR based upon such understandings.

NOW THEREFORE,  the parties hereto  acknowledge the above stated  understandings
and in furtherance of mutual  compliance  therewith and in  consideration of the
mutual covenants hereinafter contained, the parties agree as follows:


                                     EX-14
<PAGE>


                        I. REPRESENTATIONS AND WARRANTIES

A) GR represents and warrants:

(i) that it has full  right,  power  and  authority  to  market  and  distribute
consumer  products  in the United  States and other  jurisdictions  outside  the
United  States  where  distribution  of the  Product  under  the  terms  of this
Agreement is  contemplated by GR and GR will maintain such authority in all such
jurisdictions during the full term of this Agreement.

(ii) that it has full right,  power and authority to enter this Agreement and to
perform the same in accordance with its terms,  provisions and conditions and in
the manner herein specified.

B) DR represents and warrants:

(i) that it owns and/or has exclusive rights to possess and operate for purposes
of the growing of tobacco for and the  manufacture  of the cigars of kind and in
the amounts as  contemplated  by this Agreement  sufficient  assets which assets
include all of those stated in or covered by the certified financial  statements
of DR as of 8/31/97  (included as a part of this Agreement) which assets are and
shall remain available for the full term of this Agreement.

                             (attach such schedule)

(ii) that it has authority to enter this  Agreement and offer the  participation
in the sale of cigars as provided to GR herein.

(iii) that the  landlord  facilities  to which DR has  exclusive  possession  as
represented  herein have the capacity to produce up to at least  180,000  cigars
per month within any 12 month period.

                                   II. PRODUCT

The  Product  shall  be a  line  of  cigars  and  other  tobacco  products,  the
specifications  of which shall be  determined  by GR and  presented to DR and DR
shall  confirm  its ability to meet such  specifications  and  manufacture  such
Product in sufficient  quantities within the specified time periods requested by
GR. If GR is satisfied that DR is able to continuously meet such qualifications,
DR shall remain as the exclusive  source for the  acquisition  for resale of the
Product  by GR.  All of the  labels  produced  by DR  will  be  subject  to this
Agreement  including  but not  limited to  "Almirante,"  "Don  Otilio,"  "Breton
Legend,"  "Havana Blend Suarez," "Grand Reserve" and  "Andulleros" and any other
brands  that  may be  developed  in the  future  and GR shall  have a  continual
interest in the tradename  rights to such labels until it shall  relinquish such
by further agreement, regardless of whether the length of such ownership exceeds
the Term of this  Agreement,  and no other  person  other than DR shall have any
ownership interest or authority regarding use of such tradenames unless with the
express written consent of GR, which consent shall not be unreasonably withheld,
unless such right of GR is waived or otherwise  terminated by agreement of GR in
writing.

                                     EX-15

<PAGE>

                              III. DISTRIBUTORSHIP

3.1 DR appoints GR as the exclusive  distributor and sales  organization,  on an
independent  contractor  basis, for the sale of its full product line (including
the Product) worldwide except as shall be otherwise agreed and accepted by GR in
writing.

3.2 During the  continuance of this Agreement and the exclusive  distributorship
granted to GR  hereunder,  DR shall not appoint any other or  different  person,
firm, corporation or other entity to sell the same products.

3.3 GR accepts the  appointment  to develop  demand for and sell the Product and
will make all sales  hereunder in  accordance  with the terms and  conditions of
this Agreement.

3.4 As a distributor and sales organization as appointed under the terms of this
Agreement  GR shall act as an  independent  contractor  and shall  purchase  the
Product for  distribution  directly  from DR and sell such  Product as the title
owner thereof under  product  labels as agreed by both GR and DR,  including but
not  limited to the Suarez  Gran  Reserva  label to which GR  represents  it has
exclusive ownership.

3.5 In connection  with sales and other  distribution of the Product by GR shall
obtain all necessary licenses and regulatory approvals and will otherwise comply
with all governmental  regulations  applicable to sale and other distribution of
the Product including all related to  importing/exporting  of the Product and GR
shall advance such funds as are necessary therefor.

3.6 GR  represents  that it has  conducted  all research and has taken all other
actions which it has thought  necessary to  familiarize  itself with  regulatory
requirements  for  sale  and  distribution  of  the  Product  in  the  area  and
jurisdictions  wherein  GR  contemplates   distribution  and  in  entering  this
Agreement  accepts  sole  responsibility  for  all  regulatory   compliance  and
specifically  accepts any and all risk associated with regulatory  approvals not
being in place at the execution hereof.


                                     EX-16
<PAGE>


                                    IV. TERM

The term of this Agreement  shall be twenty five years (the "Initial Term") from
the date  hereof  with an  exclusive  option to GR to  extend  the term up to an
additional 25 years (the "Extended Term"),  which term may be extended by mutual
consent between the parties.

                                V. CONSIDERATION

5.1 In  addition  to  GR's  purchase  of  the  Product  from  DR at DR  cost  of
manufacture  as specified in the Price  Schedule and Cost Analysis  Outline (the
"Price Schedule")  attached hereto, DR shall participate in the profits received
by GR from its  sales of DR  products  by GR equal to 50% of net  profits  by GR
based on GR's net profits,  determined  after  deduction  from gross receipts on
sale of the Product of cost of goods  sold,  returns  and  allowances,  freight,
distribution,  selling, general and administrative expenses promotional expense,
and all applicable taxes on importation and sale of the Product.

5.2  DR and  GR  shall  continue  to  design  and  develop  additional  products
encompassing the general concepts of the Product,  and all further designs of DR
or GR in which GR has principal input in this regard shall be property of GR and
subject to the same distribution rights in GR as provided herein.

5.3 DR and the  principals  thereof shall not during the term of this  Agreement
and for one (1) year thereafter,  as stockholder,  director,  officer,  partner,
principal,  agent,  employee or otherwise,  directly or indirectly engage in any
business of any nature or type presently  conducted by DR as encompassed by this
Agreement  which shall in any manner compete with the business of GR or limit or
preclude to GR the  opportunity  of  increasing or expanding its business in the
sale of tobacco products, without the prior written consent of GR.


                            VI. PAYMENT AND DELIVERY

6.1 DR reserves a right of consultation and approval on all marketing strategies
regarding  the  distribution  of  the  Product,  which  approval  shall  not  be
unreasonably withheld and which approval shall be given if marketing methods and
strategies by GR are in conformity with the usual business  practices  prevalent
in the marketing  area. In all events,  shipment of the Product  pursuant to the
order given by GR shall be construed as approval.

6.2 DR will use its best  efforts to fill the  accepted  orders as  promptly  as
practicable,  subject,  however, to delays caused by transportation  conditions,
labor or material shortages, strikes or other labor difficulties,  fire or other
natural disaster, or other cause of whatever nature beyond the control of DR. In
all cases DR will use its best efforts to advise GR in advance of any  inability
to make full and timely  delivery of any of the Product which GR has  previously
ordered.


                                     EX-17
<PAGE>


6.3 GR shall pay DR for its  Product  ordered by GR the price of the  individual
Product  line items as stated in the  schedule  (hereinafter  the "Price  List")
attached  hereto and made a part hereof  (hereinafter  the "Price") which in all
events shall not exceed the cost to DR to manufacture  the Product,  which cost,
at the request of GR,  shall be  evidenced  in writing,  which Price List may be
revised from time to time as costs  change or new  products are added,  and same
shall be  binding if and when  signed  onto by DR and GR.  Further  items may be
added from time to time to the Product line and the Price  thereof  added to the
Price List. All payment shall be made in United States currency.

6.4 DR shall be paid the full Price  owing from GR for each  shipment by GR upon
and at the time of delivery to,  satisfactory  inspection  by, and acceptance by
GR.

6.5 The costs of shipping and of insuring the Product  during  shipment shall be
borne by GR but be an administrative  cost deducted from the proceeds of further
sale of the Product by GR before determining  "profit" for distribution  between
DR and GR, as hereinafter provided.

6.6 GR will arrange for insurance and be named as beneficiary  thereof  covering
insuring  the  shipment of the Product  purchased  by GR, such  insurance  to be
carried for the maximum  amount  customarily  carried and  available for similar
goods.

6.7 The  carrier/shipper  (the  "Carrier") and insurer shall be as designated in
the sole discretion of GR and DR notified in advance of the preparations made by
GR regarding same.

6.8 In order to enable DR to have a complete  record of all  products  sold,  GR
shall furnish DR at such  intervals as DR and GR shall agree,  but not less than
monthly, a report of all sales of products produced by DR.

                                 VII. PROMOTION

(i) GR shall  promote  the  Product  and  shall  advance  all  costs  associated
therewith (to be included in all  calculations  as a cost of  distribution to be
deducted  from  sale  proceeds  to  determine   "net  profit"  for  purposes  of
distribution  of the  Consideration  stated for this  Agreement  - see  previous
Section V Consideration). In this regard and in furtherance of such promotion GR
will  provide DR with a limited  amount of free  samples for each cigar size for
which  distribution  is sought  under this  Agreement.  GR may  purchase  larger
amounts for sales promotion purposes at cost to DR.



                                     EX-18
<PAGE>


(ii) GR would  advance  the costs  needed  for the sale,  promotion,  marketing,
advertising,  shipping  to  customers  and all  applicable  taxes.  GR  would be
responsible  for setting up convention  booths and shows and all other publicity
vehicles. All such costs will be subject to review and approval by DR.

                               VIII. TRADE SECRETS

8.1 GR agrees  that any trade  secrets  or any other like  information  of value
relating  to  the  business  and/or  field  of  interest  of DR or  any  of  its
affiliates,  or of any  corporation  or other legal entity in which DR or any of
its affiliates  has an ownership  interest of more than  twenty-five  per (25%),
including but not limited to, information  relating to inventions,  disclosures,
processes, systems, methods, formulae, patents, patent applications,  machinery,
materials,  research activities and plans, costs of production,  contract forms,
prices,  volume of  sales,  promotional  methods,  list of names or  classes  of
customers, which GR has heretofore acquired during the engagement of GR by DR or
any of its affiliates or which GR may hereafter acquire during the terms of this
Agreement as the result of any  disclosures to GR, or in any other way, shall be
regarded as held by GR and its personnel in a fiduciary  capacity solely for the
benefit of DR, its  successors  or  assigns,  and shall not at any time,  either
during  the  term of this  Agreement  or  thereafter,  be  disclosed,  divulged,
furnished,  or made accessible by GR or its personnel to anyone, or be otherwise
used by them,  except in the  regular  course of  business  of DR or GR or their
affiliates consistent with this Agreement. Information shall for the purposes of
this  Agreement be considered to be secret if not known by the trade  generally,
even  though  such  information  may have been  disclosed  to one or more  third
parties pursuant to distribution agreements,  joint venture agreements and other
agreements entered into by DR or any of its affiliates.

8.2 All information regarding marketing methods,  contracts,  customer lists, or
other sales strategies and results  generated by GR shall remain  proprietary to
GR and shall be  considered  Trade Secrets of GR and shall be handled by DR with
same confidentiality  standards and obligations as Trade Secrets of DR are to be
handled by GR as provided herein.

8.3 All restrictions  and prohibitions  regarding Trade Secrets as provided here
shall  survive the  expiration  or other  termination  of this  Agreement and be
binding on all successors and assigns of the parties hereto.

                                IX. MISCELLANEOUS

9.1  Distributor  Not Made An Agent.  It is agreed that this  Agreement does not
constitute  GR  the  agent  or  legal  representative  of  DR  for  any  purpose
whatsoever.  GR is not granted any right or authority to assume or to create any
obligation or responsibility, express or implied, in behalf of or in the name of
DR or to bind DR in any manner or thing  whatsoever and all parties hereto agree
to submit  themselves to the jurisdiction of the Courts in the State of New York
competent to hear  disputes  arising  from this  Agreement in order to have such
disputes resolved if not, done otherwise by agreement between the parties.

                                     EX-19

<PAGE>


9.2 Governing Law. This contract shall be governed by and construed according to
the  laws of the  State  of New  York and all  parties  hereto  agree to  submit
themselves to the  jurisdiction of the courts of the State of New York competent
to hear  disputes  arising from this  Agreement  in order to have such  disputes
resolved if not done otherwise by agreement between the parties.

9.3 Further  Assurances.  At any time, and from time to time,  after the date of
this  Agreement,  each party will execute such  additional  instruments and take
such  action as may be  reasonably  requested  by the other  party to confirm or
perfect title to any property  transferred  or to be  transferred  in accordance
with the terms  hereof or otherwise to carry out the intent and purposes of this
Agreement.

9.4 Non Compete.  This Agreement shall bind the parties hereto, their successors
and assigns as to all covenants  regarding  consideration  and trade secrets and
the parties  hereto and their  executive  officers shall not compete with any of
the parties hereto through the sale and  distribution of similar  products while
GR shall remain in the business of selling  and/or  distributing  cigar products
for DR under the terms of this Agreement.

9.5  Assignment.  This Agreement is personal to the parties and shall inure only
to their  benefit or the benefit of any further  entity into which said  parties
may merge under law. This Agreement cannot be assigned by any party except by or
with the written consent of the other party. Nothing herein expressed or implied
is intended or shall under any circumstances be construed to confer upon or give
any  person,  firm or  corporation  other  than the  parties  hereto  and  their
respective legal  representatives,  any rights or benefits under or by reason of
this Agreement.

9.6 Notices. All notices,  demands and other  communications  hereunder shall be
deemed to have been duly given if delivered or mailed,  certified or  registered
mail, with postage  prepaid,  or served  personally on a party at his respective
address as hereinabove  recited or at such other address as such party may, from
time to time, provide in writing to the other party for such purpose.

9.7 Complete Agreement.  This Agreement  constitutes a complete statement of all
of the  arrangements,  understandings  and  agreements  between the parties with
respect  to  the  subject   matter   hereof.   All  prior   memoranda  and  oral
understandings  with respect thereto are merged into this  Agreement.  Except as
aforesaid,  neither of the parties  hereto shall rely on any  statement by or in
behalf of any other party which is not contained in this Agreement.


                                     EX-20
<PAGE>


9.8 Interpretation.  Whenever possible,  each Article of this Agreement shall be
interpreted in such a manner as to be effective and valid under  applicable law,
but if any Article is  unenforceable  or invalid  under such law,  such  Article
shall be ineffective only to the extent of such  unenforceability or invalidity,
and the  remainder  of such Article and the balance of this  Agreement  shall in
such event continue to be binding and in full force and effect.

9.9  Inquiries.  All  inquiries  regarding  any  Products  or  similar  Products
manufactured and/or sold by DR and/or GR shall be directed to GR for response.

9.10  Non-Waiver.  The terms,  provisions and covenants  hereinbefore  contained
shall be specifically enforceable. The failure by either party hereto to enforce
any provision of this Agreement shall not operate or be construed as a waiver of
any right, power or privilege contained in that provision or any other provision
of this Agreement.

9.11  Headings.  The  headings  of all  Articles or within any  Articles  herein
specified are for the convenience of locating information only and shall have no
substantive  effect on or be construed as assisting in the interpretation of any
of the terms, covenants or conditions of this Agreement.

         In Witness Whereof, the parties hereto have caused this Agreement to be
executed the date and year first above written.

WITNESS:                            Fabrica De Tabaco Valle Dorado, SA


_______________________             by /s/ Pedro Breton
                                      --------------------------------
                                           Pedro Breton

WITNESS:                            Gran Reserve Corporation


_______________________             by /s/  Stephen Barbella
                                      --------------------------------  
                                            Stephen Barbella
                                     EX-21