EXHIBIT 10.3
                                RETAIL AGREEMENT

This agreement  ("Agreement")  between  Premium Cigars  International  (PCI) and
Mobile Oil Corporation is effective this 4 day of December, 1997.

1.       Scope of  Outlets  Covered.  This  Agreement  covers  all Mobil  retail
         outlets  owned or operated by Mobil ("Mobil  Outlets").  PCI will offer
         the products  covered by this  Agreement  to the Mobil  retail  outlets
         operated  by Mobil's  franchised  dealers  ("Dealer  Outlets")  through
         separate agreements, the substantive terms of which must be the same as
         this Agreement. PCI will provide Mobil with a monthly list of all Mobil
         Outlets and Dealer Outlets  serviced by PCI and will make a copy of any
         Dealer Outlet agreement available to Mobil on request.

2.       PCI  Products.  PCI will  provide each Mobil Outlet with a PCI Humidor,
         which  will be  owned  by PCI and  will  be  used  exclusively  for the
         display,  storage  and  sale  of PCI  Products.  PCI or its  authorized
         distributors  will stock the PCI Humidor  with PCI  Products.  PCI will
         also provide each Mobil Outlet with, cigars and related  products,  and
         each  Mobil  Outlet  will  promote  and sell those  cigars and  related
         products as authorized by PCI,  including  Cigar Gone Breath  Cleanser,
         PCI  featured   magazines   such  as  Smoke   Magazine  and  any  other
         PCI-authorized  and Mobil approved products ("PCI Products")  according
         to the terms of this Agreement.

* Confidential portions omitted and filed
separately with the Commission.
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3.       Product Presentation and Promotion.  Each Mobil Outlet will display the
         PCI humidor on the front or main  counter of the  Outlet's  location or
         such  other  location  on which the  manager  of the Outlet and PCI may
         agree.  Each PCI  Humidor  will be  positioned  so that (a) no  non-PCI
         displays,  signs,  labels or other materials block a customer's view of
         the PCI Humidor.  Each Mobil Outlet will display only labels,  displays
         or signs  approved by PCI in, on or directly  around the PCI  Humidors.
         PCI will use no PCI  displays,  signs or labels in any Mobil  Outlet or
         Dealer  Outlet  that  Mobil,  in its sole  discretion,  determines  are
         unsuitable.  Each Mobil Outlet will actively  promote,  market and sell
         only PCI Products,  on or around the PCI Humidor, and will not display,
         sell or store other products in, on or from the PCI Humidor. Each Mobil
         Outlet will comply with all applicable federal,  provincial,  state and
         local laws and  regulations  and will hold and  maintain  all  federal,
         state,  provincial,  and local  licenses  and permits  required for the
         sale, distribution and marketing of PCI Products. PCI will assist Mobil
         by  providing  any  information  PCI may have  concerning  the federal,
         state, provincial and local laws, regulations, permits and licenses.

4.       Term of Agreement.  Unless terminated by a provision of this Agreement,
         this Agreement has a term of one year from the Effective  Date. It will
         automatically renew for three additional one-year terms, unless written
         notice is provided  by either  party no less than sixty (60) days prior
         to the renewal period.  PCI or Mobil, upon any breach of this Agreement
         by the  other  Party  which has not cured  within  thirty  (30) days of
         written

* Confidential portions omitted and filed
separately with the Commission.
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         notice of breach,  may  terminate  this  Agreement for any Mobil Outlet
         and/or  Dealer  Outlet or all Mobil  Outlets and Dealer  Outlets at any
         time by  written  notice to the other  party  which  will be  effective
         thirty (30) days after
         receipt.

5.       Humidors.  PCI will  provide one PCI Humidor to each Mobil Outlet at no
         cost.  PCI will repair or replace,  at its cost, a PCI Humidor  damaged
         due to manufacturing defects or normal wear and tear. Each Mobil Outlet
         will care for and  maintain  the PCI Humidor  provided by PCI.  Any PCI
         Humidor  damaged by misuse,  lost or stolen may be repaired or replaced
         only  by  PCI;  Mobil  will  pay  the  cost  of  any  such  repairs  or
         replacements.  The replacement cost to Mobil will be * Upon termination
         of this  Agreement  for any  reason,  Mobil will make the PCI  Humidors
         available at each Mobil Outlet to PCI for collection and return to PCI.
         After  collecting the PCI Humidors,  PCI will  discontinue  any further
         business with any and all Mobil Outlets or Dealer Outlets.

6.       Payment  and Price.  Each Mobil  Outlet  will pay PCI for PCI  Products
         pursuant  to a  purchase  order,  *  otherwise  from  receipt of goods,
         including a late charge of * of the total past due payments.  All Mobil
         Outlets  and  Dealer  Outlets  will be charged a price by PCI that will
         provide a * margin.

7.       Independent Contractor; No Interest in Goodwill. PCI and Mobil are, and
         will be,  independent  contractors,  and no other  relationship  may be
         inferred form this Agreement.

* Confidential portions omitted and filed
separately with the Commission.
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         Except for all state cigar  taxes,  which will be filed and paid by PCI
         on the  PCI  Products,  each  Mobil  Outlet  will  be  responsible  for
         obtaining and paying all taxes,  costs,  bonds,  insurance and licenses
         required for the business and its  distribution,  sale and marketing of
         the PCI  Products.  Mobil will not acquire any interest in any goodwill
         or trademarks associated with the PCI Products.

8.       No Warranties.  PCI does not give or imply any  warranties  relating to
         PCI Products,  including any implied warranties of merchantability  and
         fitness for a particular purpose.  PCI liability,  if any, to Mobil for
         alleged defective  products will, under all circumstances be limited to
         repair or replacement of a product, at PCI's sole option.

9.       Reporting.
         PCI will provide Mobil with a Quarterly Cigar Category  Velocity Report
         detailing purchases at each location.  This report will be due no later
         than thirty (30) days after the end of each  calendar  quarter and will
         include  detail for each  location by the Mobil station  number,  which
         will be provided by Mobil.

10.      Indemnification.  Mobil and PCI will indemnify and hold each and any of
         their related  parties of the other harmless from any and all liability
         directly or  indirectly  based upon or related to any acts or omissions
         of each party's  employees or agents  arising in  connection  with this
         Agreement. Section 8 not withstanding, PCI will indemnify and

* Confidential portions omitted and filed
separately with the Commission.
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         hold  Mobil  and  Mobil's  related  parties  harmless  from any and all
         liability from the use of the PCI Products by any person or entity.

11.      Governing Law;  Attorney's Fees. This Agreement will be governed by the
         law of the  State  of  Virginia  without  consideration  of  Virginia's
         conflict of law  principals.  The Courts of Fairfax  County,  Virginia,
         including any applicable  Federal  Courts,  will be the exclusive legal
         forum to  resolve  any  dispute  between  the  parties  related to this
         Agreement.  The  prevailing  party  in any  dispute  relating  to  this
         Agreement  will be entitled to receive its costs,  fees,  and expenses,
         including reasonable attorney's fees.

12.      Notices.  Each party  will  provide  the other an address  and point of
         contact.  Any  notice  sent  pursuant  to this  Agreement  is  presumed
         received  five (5) days  after  deposit  in the US Mail,  postage  paid
         addressed,  to the  party  at  its  current  address.  Notice  send  by
         certified or registered mail or other delivery  method  providing for a
         signed  receipt will be  effective  on the date of the signed  receipt.
         Either  party will notify the other in writing  within five (5) days of
         any  change in name,  address,  phone  number or person to serve as the
         point of contact.

13.      Severability.  If any one or more of the  provisions of this  Agreement
         are held to be invalid,  illegal, or unenforceable in any respect, such
         invalidity,  illegality,  or unenforceability will not affect any other
         provision, and this Agreement will be construed

* Confidential portions omitted and filed
separately with the Commission.
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         as if such invalid,  illegal, or unenforceable provision had never been
         included in the Agreement.

14.      Binding on Successors and Assigns. This Agreement will extend to and be
         binding upon the heirs, legal  representatives,  successors and assigns
         of the parties. EXECUTED as of the Effective Date set forth above.

15.      Assignment.  Neither Party may assign all or any part of this Agreement
         without the written consent of the other,  except that Mobil may assign
         this Agreement to any parent or subsidiary company of Mobil.

Premium Cigars International                 Mobil Oil Corporation

By:   /s/ Steven A. Lambrecht  12-4-97       By:    /s/ [illegible]
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Its:        C.E.O.                           Its:   Group Category Manager
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* Confidential portions omitted and filed
separately with the Commission.
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