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.
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/ Xxxxxx X. Xxxxxxxxx 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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