EXHIBIT 10.8

                                    AGREEMENT
                                    ---------

         THIS  AGREEMENT  (the  "Agreement")  is made  and  entered  into by and
between Premium Cigars  International,  Ltd., an Arizona corporation ("PCI") and
Colin A. Jones ("Jones").  PCI and Jones are collectively  referred to herein as
the "Parties."

                                R E C I T A L S:
                                ----------------

         A. Jones entered an Employment  Agreement  with PCI dated June 13, 1997
(the "Employment Agreement").

         B. PCI terminated Jones' employment on January 16, 1998.

         C. Jones is the maker under a Promissory  Note dated  December 31, 1996
in favor of PCI (the "Note").

         D. PCI and Jones  have  certain  disputes  regarding  Jones'  severance
compensation and other sums payable to Jones after his termination.

         E. Without any  admission of  liability  by either  Party,  the Parties
desire to avoid and resolve  any further  dispute or  litigation  regarding  any
compensation or payments to Jones from the Company.

         F. It is of utmost  importance  to PCI that Jones not compete  with PCI
after  his   termination   and  PCI  wishes  to  extend  the  current   covenant
not-to-compete in Jones' Employment Agreement.

         FOR GOOD AND VALUABLE  CONSIDERATION,  the receipt and  sufficiency  of
which is hereby acknowledged, the Parties agree as follows:

         1. Settlement Contingent Upon PCI's Simultaneous  Settlement with Steve
and Greg  Lambrecht.  This  settlement  is contingent  upon PCI's  entering into
separate  settlement  agreements  with  both  Steven  A.  Lambrecht  and Greg P.
Lambrecht  regarding  certain  compensation  and  other  payments  that they are
claiming.  If PCI has not entered into such settlement agreements with Steven A.
Lambrecht  and Greg P.  Lambrecht on or before 5:00 p.m. on March 3, 1998,  then
this  Agreement  shall be null and void and of no force  and  effect  whatsoever
against PCI or Jones.

         2. Payment.  Provided that the  contingency  in Paragraph 1 is met, PCI
shall pay Jones,  within ten (10)  business  days  after the  execution  of this
Agreement,  the sum of Forty Thousand Dollars ($40,000.00) (the "Payment").  The
Payment is an amount which was
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negotiated  by the  Parties in  exchange  for the release of claims set forth in
paragraph  8  herein  and  in  exchange  for  the   extension  of  the  covenant
not-to-compete in the Employment Agreement.

         3. Severance Compensation.  Jones acknowledges that he has already been
paid  for all  amounts  owing  at his  termination,  including  payment  for all
vacation  and other  benefits.  He  further  acknowledges  that he has been paid
$6,461.54  in severance  compensation  since his  termination  and that the sole
remaining amount of severance  compensation to be paid is $56,538.46,  which PCI
shall pay bi-weekly  over a period of 35 weeks.  PCI shall also pay Jones $73.85
per  bi-weekly  period until the nine (9) months  following his  termination  is
completed,  as a cash  payment in lieu of the health  insurance  premium PCI was
paying for Jones at the time of his  termination.  Jones will be  responsible to
obtain  his own  health  insurance.  Jones  acknowledges  that,  except  for the
severance  compensation  described  in this  Paragraph  and the  Payment and any
applicable ongoing compensation as a director, he has been paid for all services
rendered to PCI as an  employee  and has no right to any  additional  employment
compensation  or employment  benefits of any kind from PCI.  Jones  acknowledges
that the payment of severance  compensation remains subject to the conditions of
the  Employment  Agreement,  including,  without  limitation,  the conditions of
Paragraph 7 of the Employment Agreement as that Section relates to paragraphs 8,
9 & 10 of the Employment Agreement.

         4.  Withholding.  PCI shall make no deduction or  withholding  from the
Payment in Paragraph 2 in reliance upon Jones affirmative representation that he
will be solely  responsible for any and all taxes and other amounts owed on such
payments.  PCI  will  be  required  to  withhold  all  taxes  and  other  normal
withholdings from the severance compensation amounts described in Paragraph 3.

         5. Employment Agreement.

                  a.   Compensation.   Except  for  the  Payment  and  severance
         compensation  as described in  paragraphs 2 and 3 herein,  Jones hereby
         waives any and all rights to any monetary or other  compensation  under
         the   Employment   Agreement,   including   without   limitation,   any
         compensation pursuant to paragraph 3 of the Employment Agreement or any
         severance  compensation  pursuant  to  paragraph  7 of  the  Employment
         Agreement.  Jones expressly  acknowledges that he has been paid in full
         for all  services  rendered to PCI prior to the date of this  Agreement
         including without limitation wages and vacation pay through the date of
         termination.

                  b. No Options or Bonus.  Jones  expressly  waives any right to
         any options or bonuses  which have been or may in the future be offered
         to any employee of PCI.

                  c.  Continuing  Obligations;  Extension  of  Covenant  Not  To
         Compete.  Notwithstanding  anything  contained within this Agreement to
         the  contrary,   Jones  expressly  acknowledges  that  his  obligations
         pursuant  to  Paragraphs  8, 9, 10 and 13 of the  Employment  Agreement
         relating to Customer Records, Confidential Information and the Covenant
         Not To Compete and PCI's remedies  under the  Employment  Agreement for
         Jones'  violations  of said  provisions  and  Miscellaneous  Provisions
         provided therein
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         shall  continue  and  remain in full  force and effect for the term set
         forth  in the  Employment  Agreement.  However,  in  exchange  for  the
         Payment,  the  term of the  Covenant  Not To  Compete  as set  forth in
         paragraph  10(b) of the Employment  Agreement  shall be extended for an
         additional  six (6)  months  for a total of 18 months  from the date of
         Jones' termination from PCI.

         6. Status as a Director.  This Agreement shall not affect Jones' status
as a director of PCI, and Jones shall be entitled to the  compensation  paid to,
or  options  granted  to,  outside  directors  and Jones  shall be treated as an
outside  director  effective upon the date of termination of his employment with
PCI.

         7. Note; No Defense Related to This Settlement.  The Parties agree that
this  Agreement  shall have no effect upon the principal  amount or interest due
under, or due date of, the Note and Jones expressly  acknowledges that the Note,
and his obligations  thereunder,  remain in full force and effect.  Jones agrees
that he shall not, directly or indirectly,  raise this Agreement,  or any of the
terms of this Agreement, or the claims settled hereby, as a defense or offset to
his obligations and liability under the Note.

         8.  Release of Claims.  Except for the  obligations  created by and the
rights expressly  reserved within this Agreement,  Jones does hereby and forever
discharge PCI and each of its stockholders,  predecessors,  successors, assigns,
agents,   directors,   officers,   employees,   representatives,    consultants,
affiliates,  lawyers,  and all persons acting by, through,  under, or in concert
with them, or any of them, of and from any and all manners of action or actions,
cause or causes of action,  in law or in  equity,  suits,  liabilities,  claims,
demands,   damages,  losses,  costs  or  expenses,  of  any  nature  whatsoever,
(hereinafter collectively "claims") arising out of or relating to the Employment
Agreement  or  Jones'  employment  with  PCI.  As stated  more  particularly  in
Paragraph 9 herein,  both Parties expressly reserve the right to bring an action
to enforce this  Agreement and the  obligations  and rights  expressly  reserved
herein.  It is the  Parties  intention  that  the  foregoing  release  shall  be
effective  as a full and  final  accord  and  satisfaction,  and as a bar to all
claims  against  PCI as set forth  above,  except for an action to enforce  this
Agreement or any rights expressly reserved within this Agreement.

         9. Further Actions.  The Parties may plead this Agreement as a full and
complete  defense to, and as the basis for an  injunction  against,  any action,
suit or other proceeding  which either Party hereto may institute,  prosecute or
attempt in breach of this Agreement.

         10.  Costs.  The  Parties  will bear  their  own  costs,  expenses  and
attorneys' fees, whether taxable or otherwise,  incurred in or arising out of or
connected  with the  negotiation  of this  Agreement  and the  disputes  settled
herein.

         11.  Construction  of this  Agreement.  This  Agreement has been freely
entered  into by the  Parties,  each of whom has been  represented  by  separate
counsel.  The  validity,  effect  and  performance  of this  Agreement  shall be
governed and construed by the laws of the State of Arizona. This Agreement shall
be construed liberally to effect its purpose, and the Parties waive
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any rule requiring strict construction  against or in favor of either Party. The
Agreement shall be construed as if drafted by the Parties jointly.

         12. Integration  Clause.  This Agreement embodies the full and complete
understanding  and  agreement  between the Parties  with  respect to the matters
addressed  herein.  This  paragraph  may be waived or modified only in a writing
signed by the party to be charged.

         13. Severability. If any term of this Agreement shall be found invalid,
void or  unenforceable,  that term shall be severed from this  Agreement and the
remaining terms enforced as specified herein.

         14. Prevailing Party. In any action arising out of this Agreement,  the
prevailing  party or  parties  shall  be  entitled  to an  award  of  reasonable
attorneys' fees and costs incurred in such action,  which award shall be made by
the Court,  and shall be in addition to any other  relief to which such party or
parties are entitled.  The Parties  expressly  consent to the  jurisdiction  and
venue of Maricopa  County,  Arizona  Superior  Court for the  resolution  of any
future disputes.

         15. Binding  Effect.  This  Agreement  shall be binding upon, and shall
inure  to  the   benefit   of,   the   Parties,   their   officers,   directors,
representatives,  agents, employees, attorneys, heirs, personal representatives,
successors and assigns.

         16. No  Admission  of  Liability.  The  Parties  agree  that this final
compromise  and  settlement  is not and  shall  not be used as an  admission  of
liability or responsibility.

         17. Counterparts.  This Agreement may be executed in counterparts which
together shall constitute one and the same instrument.

         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as
of this ____ day of March, 1998.


PREMIUM CIGARS INTERNATIONAL, LTD.


By    /s/ John E. Greenwell                       /s/ Colin A. Jones
  --------------------------------------     -----------------------------------
   John E. Greenwell, President              Colin A. Jones
   and Chief Executive Officer
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