<PAGE>   1
                                                                   EXHIBIT 10.2


                              AMENDED AND RESTATED
           TECHNOLOGY OWNERSHIP, TECHNICAL ASSISTANCE AND TECHNOLOGY
                               LICENSE AGREEMENT


         This Agreement, effective as of July 1, 2000, amends and restates that
certain "Technology Ownership, Technical Assistance and Technology License
Agreement" by and among Philip Morris Incorporated (PMUSA), Philip Morris
Products Inc. (PMPI) and Schweitzer-Mauduit International Inc. (SWM), for
itself and as agent for and on behalf of the SWM Affiliates, originally
effective April 1, 1998.

         WHEREAS, pursuant to the Joint Development Agreement PMUSA and SWM
undertook to develop the MOD Technology;

         WHEREAS, pursuant to the Implementation Agreement PMUSA and SWM have
undertaken to implement the MOD Technology at the Mill for use in the
manufacture of Banded Cigarette Paper;

         WHEREAS, the Parties desire to set forth their ownership rights in,
and respective rights to exploit, the MOD Technology and the PM Patents;

         [*****]

         WHEREAS, SWM is willing to provide PMUSA and PMPI with the [*****] to
assist the PM Affiliates in the exploitation of the MOD Technology and the PM
Patents and to provide certain Technical Assistance to PMUSA, PMPI and Third
Party Licensees of MOD Technology and the PM Patents in accordance with the
terms and conditions set forth herein, if and as requested by PMUSA or PMPI and
in return for certain compensation as described herein; and

         WHEREAS, PMUSA and PMPI are willing to grant SWM certain rights to
exploit the MOD Technology and the PM Patents in accordance with the terms and
conditions set forth in this Agreement, and SWM is willing to accept and
exercise such rights in accordance with and subject to the limitations of the
terms and conditions set forth in this Agreement.



CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH
RULE 24 b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
OMITTED INFORMATION HAS BEEN REPLACED WITH ASTERISKS.


<PAGE>   2

         NOW THEREFORE, in consideration of the foregoing recitals, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties agree as follows:

         1.       Definitions. The following terms shall have the specified

meanings when used in this Agreement.

         (a)      Banded Cigarette Paper: means Cigarette Papers for use in
forming cigarette rods having integrated cellulosic bands that encircle the
finished cigarette rod to modify the mass burn rate of the cigarette. As used
herein, the term is limited to Cigarette Papers whose bands are applied to the
paper using a moving orifice device ("MOD").

         (b)      Cigarette Paper: means Fine Papers that are used to enclose
the tobacco, forming the rod of a cigarette.

         (c)      Confidential Information: means (i) all information (including
documents, data, samples, schematics and other tangibles or intangibles) that
relates to the MOD Technology or any MOD Technology development efforts between
the Parties under the JDA, the Implementation Agreement or related PMUSA
purchase orders, (ii) any information related to SWM paper manufacturing
facilities or processes, (iii) any information related to the business plans,
production facilities or technology of any PM Affiliate, including but not
limited to all production planning information, and (iv) any other information
disclosed by one Party to another pursuant to this Agreement, either orally, in
writing or by observation, including but not limited to, the contents of this
Agreement and the JDA.

         (d)      Fine Papers: Cigarette Paper, plug wrap and tipping paper to
be used in the manufacture of cigarettes or cigarette components.

         (e)      Full Commercial Production Date: means the last day of the
sixth full calendar month following the date on which the [*****] at the Mill
that [*****] Banded Cigarette Paper pursuant to the Implementation Agreement
[*****].

         (f)      Implementation Agreement: means that certain addendum to the
SSA between PMUSA and SWM, dated April 1, 1998, respecting the upgrade of the
Mill to enable SWM to manufacture and sell Banded Cigarette Papers and
respecting the sale and purchase of Banded Cigarette Papers by SWM and PMUSA,
respectively. As used herein, the term also shall include all amendments to
such agreement.

         (g)      Joint Development Agreement or JDA: means that certain
agreement between PMUSA and SWM, dated November 13, 1992, respecting the
development of equipment, processes and know-how required to manufacture Banded
Cigarette Papers.

         (h)      Mill: means SWM's Spotswood, New Jersey manufacturing
facility.



CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH
RULE 24 b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
OMITTED INFORMATION HAS BEEN REPLACED WITH ASTERISKS.


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<PAGE>   3

         (i)      MOD Technology: means the technology, expertise and know-how
relating to the machinery and process of applying cellulosic bands to Cigarette
Paper to manufacture Banded Cigarette Paper, including but not limited to
machinery and processes used to apply bands to paper, paper preparation used to
incorporate cellulosic bands, preparation of the fibers used to form the bands,
drying of the banded sheet and associated controls and technology, and quality
inspection and associated controls and control technology, acquired or
developed individually or jointly by PMUSA and SWM under or arising out of the
Joint Development Agreement, the Implementation Agreement or PMUSA purchase
orders issued to SWM for Banded Cigarette Paper development, including but not
limited to information contained in the [*****]. MOD Technology does not
include technology, expertise and know-how that (i) was possessed by SWM as of
November 13, 1992 or (ii) was developed thereafter by SWM other than pursuant
to the JDA, Implementation Agreement, or PMUSA purchase orders issued to SWM
for Banded Cigarette Paper development (collectively "SWM Know-how") but does
include any new technology, expertise and know-how developed from SWM Know-how
that have applications in the manufacture of Banded Cigarette Paper or that may
have applications in the manufacture of other products other than Fine Papers.

         (j)      Other Cigarette Manufacturers: means cigarette manufacturers
other than the PM Affiliates and PM Contract Manufacturers.

         (k)      Parties: means PMUSA, PMPI and SWM.

         (l)      Party: means PMUSA, PMPI or SWM.

         (m)      PMPI: means Philip Morris Products Inc., a Virginia
corporation.

         (n)      PMUSA: means Philip Morris Incorporated, a Virginia
corporation.

         (o)      PMI: means Philip Morris International, Inc., a Delaware
Corporation and the parent company of PMPI.

         (p)      PM Affiliates: means the PMUSA Affiliates and the PMI
Affiliates.

         (q)      PMI Affiliates: means PMI and those entities, whether
presently existing or as may be created in the future, that are or become owned
by PMI or that PMI now or in the future controls, directly or indirectly,
individually or jointly, through the power to vote more than [*****] percent of
the voting stock or voting rights of such entities. An entity that is today or
that may become in the future a PMI Affiliate shall cease to be a PMI Affiliate
when it ceases to be owned or controlled by PMI.

         (r)      PMUSA Affiliates: means PMUSA and those entities, whether
presently existing or as may be created in the future, that are or become owned
by PMUSA or that PMUSA now or in the future controls, directly or indirectly,
individually or jointly, through the power to vote more than [*****] percent of
the voting stock or voting rights of such entities. An entity that is today or
that may become in the future a PMUSA Affiliate shall cease to be a PMUSA
Affiliate when it ceases to be owned or controlled by PMUSA.



CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH
RULE 24 b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
OMITTED INFORMATION HAS BEEN REPLACED WITH ASTERISKS.


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<PAGE>   4

         (s)      PM Brand: means any of those brands of cigarettes that are
subject to trademarks owned by or licensed to a PM Affiliate.

         (t)      PM Contract Manufacturers: means persons or entities taking
delivery of Banded Cigarette Paper for incorporation in cigarettes manufactured
by them under contract for a PM Affiliate or pursuant to a licensee
manufacturing agreement with a PM Affiliate covering a PM Brand.

         (u)      PM Patents: means issued patents and pending patent
applications throughout the world, of whatever type, that are (i) owned or
controlled by PMUSA or PMPI and (ii) related to the manufacture and/or sale of
Banded Cigarette Paper or (iii) the properties, structures or raw and finished
components of Banded Cigarette Paper or cigarettes incorporating Banded
Cigarette Paper; provided, however, the PM Patents shall be limited to those
patents already issued or for which applications are filed, including any later
filed continuation or divisional applications thereof, as of the Full
Commercial Production Date; and provided further that if the Implementation
Agreement shall be terminated prior to the Full Commercial Production Date by
either PMUSA or SWM, the PM Patents will be limited to those patents described
above that are already issued or for which applications are filed, including
any later filed continuation or divisional applications thereof, as of the
effective date of such termination.

         (v)      SSA: means that certain amended and restated agreement
between SWM and PMUSA, effective April 1, 1998, under which PMUSA has agreed to
purchase, accept and pay for, and SWM has agreed to manufacture, sell and
deliver Fine Papers. As used herein, such term also shall include all
amendments to such agreement.

         (w)      Straw Wrap: a paper manufactured by SWM of weight and other
qualities comparable to Cigarette Paper and that is sold by SWM for use in
packaging individual drinking straws.

         (x)      SWM:  means Schweitzer-Mauduit International Inc., a Delaware
corporation.

         (y)      SWM Affiliates: means those entities, whether presently
existing or as may be created in the future, that are or become owned by SWM or
that SWM now or in the future controls, directly or indirectly, individually or
jointly, through the power to vote more than fifty percent of the voting stock
or voting rights of such entities; provided, however, as used herein, the term
shall not include any entity engaged in the manufacture or sale of cigarettes,
nor shall it include any entity that shall acquire, by purchase or otherwise,
the right to vote or control the vote of any or all of the voting stock of SWM.
An entity that is today or that may become in the future a SWM Affiliate shall
cease to be a SWM Affiliate when it ceases to be owned or controlled by SWM.
Nothing contained herein shall prevent SWM from restructuring its businesses or
result in the loss of any rights hereunder following any restructuring;
provided, that the composition of the majority of the SWM Board of Directors
preceding any restructuring shall be the same as the composition of the
majority of the Board of Directors of any entity that becomes the ultimate
parent entity of the SWM group of businesses after such restructuring.



CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH
RULE 24 b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
OMITTED INFORMATION HAS BEEN REPLACED WITH ASTERISKS.


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<PAGE>   5

         (z)      SWM Patents: means issued patents and patents for which the
applications are filed, including any later filed continuation or divisional
applications thereof, throughout the world, of whatever type, (i) owned or
controlled by SWM or SWM Affiliates and (ii) related to (a) the manufacture,
utilization or sale of Banded Cigarette Paper, (b) the manufacture, utilization
or sale of products incorporating Banded Cigarette Paper or (c) the properties,
structures or raw and finished components of Banded Cigarette Paper or
cigarettes incorporating Banded Cigarette Paper; provided, however, the SWM
Patents shall be limited to (i) those patents already issued or for which the
applications are filed, including any later filed continuation or divisional
applications thereof, as of the Full Commercial Production Date and (ii)
patents issued to SWM or patents for which the applications are filed,
including any later filed continuation or divisional applications thereof,
pursuant to applications filed pursuant to Section 3(d) below; and provided
further that if the Implementation Agreement shall be terminated prior to the
Full Commercial Production Date, by either Party, the SWM Patents will be
limited to those patents described above that are already issued or for which
applications are filed, including any later filed continuation or divisional
applications thereof, as of the effective date of such termination.

         (aa)     [*****]

         (ab)     [*****]

         (ac)     Third Party Licensees: means Fine Papers suppliers, other than
SWM and the SWM Affiliates, that may be licensed by PMUSA or PMPI pursuant to
Section 5(b) hereof to exploit the PM Patents and the MOD Technology through
the manufacture and sale of Banded Cigarette Paper.



CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH
RULE 24 b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
OMITTED INFORMATION HAS BEEN REPLACED WITH ASTERISKS.


                                      -5-
<PAGE>   6
         2. Relationship to the Joint Development Agreement and the
Implementation Agreement. The Joint Development Agreement addressed the [******]
resulting from their efforts to develop the [******] necessary to manufacture
Banded Cigarette Paper on a commercial basis. The Implementation Agreement
addresses the agreement of PMUSA and SWM to implement that [******] at the Mill.
This Agreement replaces the provisions of the Joint Development Agreement
relating to [******] arising from their joint and individual development efforts
related to the manufacture of Banded Cigarette Paper during the period beginning
November 13, 1992 and continuing through the Full Commercial Production Date.
Specifically, the provisions of the Joint Development Agreement relating to the
[******] of the MOD Technology, [******]

         3. Ownership of the MOD Technology and Patents.

         (a)      Technology and Patents Pre-dating the Joint Development
Agreement: PMUSA and SWM each shall retain ownership of their respective patents
and technology, expertise and know-how [******] of Banded Cigarette Paper to the
extent such patents had been issued or applied for and such technology,
expertise and know-how had been acquired prior to November 13, 1992.

         (b)      MOD Technology: PMUSA and PMPI are the sole owners of the MOD
Technology and, subject to Section 3(d) below, have the exclusive right to file
patent applications in the United States and elsewhere on any MOD Technology and
on any applications thereof or products derived therefrom. This right includes
the right to file patent applications respecting applications of MOD Technology
and products derived therefrom that are unrelated to Banded Cigarette Paper. To
the extent PMUSA or PMPI may be granted patents on any MOD Technology,
applications thereof or products derived therefrom, PMUSA and PMPI shall have
the right (i) to exploit such patents and to practice and license the rights
thereunder and (ii) to license other PM Affiliates to exploit such patents and
to practice the rights thereunder. [******] PMUSA's and PMPI's ownership of the
MOD Technology shall not create any right, implied or otherwise, for any PM
Affiliate or licensee to require the disclosure by SWM to any PM Affiliate or
licensee of any document or information respecting the manufacture of Cigarette
Paper, including Banded Cigarette Paper, that has not already been disclosed to
PMUSA or PMPI, or that is not disclosed to PMUSA or PMPI in the future,
voluntarily or as required by, or in the course of performance of, any agreement
between SWM and PMUSA or PMPI.

         (c)      PMUSA and PMPI Patent Applications: If PMUSA or PMPI elects to
exercise its option to file a patent application respecting any patentable MOD
Technology, applications thereof or products derived therefrom, SWM shall cause
all SWM employees determined to be inventors to assign their right, title and
interest in such technology to PMUSA or PMPI and

CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE
24 b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
OMITTED INFORMATION HAS BEEN REPLACED WITH ASTERISKS.

                                      -6-
<PAGE>   7

SWM shall assist in prosecuting the patent application by furnishing information
or data as reasonably requested. PMUSA or PMPI, as the case may be, shall
reimburse SWM for reasonable costs incurred in providing such requested
assistance. SWM shall have the right to review any such patent application prior
to filing and to make recommendations with respect thereto.

         (d)      SWM Patent Applications: If PMUSA and PMPI both decline to
exercise their option with regard to the filing of a patent application
respecting any patentable MOD Technology, then SWM may, at SWM's expense, file a
patent application on such technology and SWM shall own any resulting patent
rights; [******] In such event, PMUSA and PMPI shall require all PMUSA and PMPI
employees determined to be inventors to assign their right, title and interest
in said technology to SWM and PMUSA shall, at SWM's expense, assist in
prosecuting the patent application by furnishing information or data as
reasonably requested. PMUSA shall have the right to review any such SWM patent
application prior to filing and to make recommendations with respect thereto.
[******]

         4.       Preparation and Updating of [*****].

         (a)      Within [******] days after the [******] (as such term is
defined in the Implementation Agreement), SWM shall prepare and submit to PMUSA
those [******] in Attachment A hereto that are identified with the notation
"(SWM)". Within [******] days after the [******] (as such term is defined in the
Implementation Agreement), SWM shall update those portions of the [******]
Banded Cigarette Papers at the Mill.

         (b)      SWM's initial delivery of those [******] to be prepared by
SWM, and PMUSA's acceptance thereof, not to be unreasonably withheld, shall be a
condition of SWM's rights to any payments to be made to SWM by PMUSA or PMPI
pursuant to Article 8 hereof.

         (c)      PMUSA and PMPI shall have the right to disclose the [******]
to Third Party Licensees, provided such licensees enter into confidentiality
agreements comparable to those in Article 11 hereof respecting the use and
further disclosure of the information provided in such [******] PMUSA or PMPI,
as the case may be, shall take reasonable measures to enforce any breach of any
such confidentiality agreement by one of its Third Party Licensees that shall be
brought to its attention.

         (d)      The [******] shall contain a legend stating that SWM does not
warrant to any Third Party Licensee the accuracy of the information in such
documents

CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE
24 b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
OMITTED INFORMATION HAS BEEN REPLACED WITH ASTERISKS.

                                      -7-
<PAGE>   8

or in any way guarantee that a recipient of the [*****] will be able to [*****]
Banded Cigarette Paper.

         5.       The PM Affiliates' Right to Manufacture and PMUSA's and PMPI's
Right to License the Manufacture of Banded Cigarette Paper.

         (a)      The PM Affiliates shall have the right, without limitation, to
exploit the PM Patents and the MOD Technology through the manufacture or sale of
Banded Cigarette Paper for incorporation into cigarettes manufactured (i) by the
PM Affiliates and PM Contract Manufacturers or (ii) by Other Cigarette
Manufacturers. Nothing herein shall be interpreted as a grant by SWM to any or
all of the PM Affiliates of any license under the SWM Patents to exploit those
patents through the manufacture or sale of Banded Cigarette Paper or cigarettes
incorporating Banded Cigarette Paper manufactured by a PM Affiliate or as a
right granted by SWM for any PM Affiliate[******]

         (b)      PMUSA and PMPI shall have the right, without limitation, to
license Fine Papers suppliers to exploit the PM Patents and the MOD Technology
through the manufacture and sale of Banded Cigarette Paper.

         (c)      PMUSA and PMPI shall have the right to grant licenses to Other
Cigarette Manufacturers to exploit the PM Patents and the MOD Technology through
the manufacture and sale of cigarettes incorporating Banded Cigarette Paper.

         6.       [******]

         (a)      [******]

         (b)      [******]

CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE
24 b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
OMITTED INFORMATION HAS BEEN REPLACED WITH ASTERISKS.

                                      -8-
<PAGE>   9

          (c)     Notwithstanding Section 6(a) and Section 6(b) above, [******]

          (d)     Upon request by PMUSA or PMPI, SWM [******]

          (e)     SWM acknowledges and agrees that [******]

          (f)     SWM covenants that it will not assign or otherwise transfer,
and will not permit or suffer the SWM Affiliates to assign or otherwise
transfer, the SWM Patents to any person or entity unless such assignee or
transferee (i) [******] shall provide covenants for the benefit of the PM
Affiliates, Third Party Licensees and Other Cigarette Manufacturers that are
substantially equivalent to those provided by SWM in Section 6(a) and Section
6(b) and (ii) shall agree to be bound by the undertakings and acknowledgements
made by SWM in Section 6(d) and Section 6(e) hereof.

          (g)     PMUSA and PMPI each covenants that it will not assign or
otherwise transfer any of the PM Patents to any person or entity unless the
document under which such assignment or transfer is made contains a requirement
that the assignee or transferee agrees to be bound by covenants for the benefit
of SWM that are substantially equivalent to those made in Section 8(a) hereof
and shall agree to be bound by the undertakings made by PMUSA and PMPI in
Article 8 hereof; provided, however, that the covenant made in this Section 6(g)
shall not apply to any assignment or transfer of any or all of the PM Patents
between PMUSA and PMPI or to any assignment by PMUSA to PMPI of the right to
file patent applications respecting the MOD Technology as provided in Article 3.
Nothing in this Section 6(g) is intended to impose any limitation or restriction
on PMUSA and PMPI's right to sublicense the right to exploit the MOD Technology
and PM Patents to any other PM Affiliate.

CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE
24 b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
OMITTED INFORMATION HAS BEEN REPLACED WITH ASTERISKS.

                                      -9-
<PAGE>   10

         [******]

         [******]

         8.       SWM Compensation for Role in Developing Technology.

         (a) PMUSA and PMPI [******]

         (b) [******]

CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE
24 b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
OMITTED INFORMATION HAS BEEN REPLACED WITH ASTERISKS.

                                      -10-
<PAGE>   11


                  [******]

                  [******]

[******]

         [******]

         [******]

         9.       SWM Licenses.

         (a)      Rights Granted to SWM:

                    (i)       PMUSA and PMPI each hereby grants to SWM, upon the
 terms and subject to the conditions and restrictions of this Agreement,
[******]

                   (ii)       PMUSA and PMPI each hereby grants to SWM, upon the
terms and subject to the conditions and restrictions of this Agreement [******]

                  (iii)       PMUSA and PMPI each hereby grants to SWM [******]

CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE
24 b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
OMITTED INFORMATION HAS BEEN REPLACED WITH ASTERISKS.

                                      -11-
<PAGE>   12

[*****]
                  (iv)     PMUSA and PMPI each hereby grants to SWM [******]

         (b)      Conditions of Licenses: The rights granted to SWM under
Section 9(a)(i) through Section 9(a)(iii) above shall be subject to the
following:

                  (i)      SWM shall not manufacture Banded Cigarette Paper for,
or sell or deliver Banded Cigarette Paper to, persons or entities other than a
PM Affiliate or a PM Contract Manufacturer that have not received a license from
PMUSA or PMPI authorizing such person or entity to make and/or sell cigarettes
incorporating Banded Cigarette Paper. Before first accepting an order for Banded
Cigarette Paper from any such person or entity, SWM shall request and receive
confirmation from PMUSA or PMPI that such person or entity is licensed to
manufacture and/or sell cigarettes incorporating Banded Cigarette Paper;

                  (ii)     Contemporaneous with every delivery of Banded
Cigarette Paper placed by, on behalf of, or for the benefit of a cigarette
manufacturer other than a PM Affiliate or a PM Contract Manufacturer, SWM shall
provide notice in a form reasonably acceptable to PM and PMPI to such person or
entity that by taking delivery of Banded Cigarette Paper from SWM no right or
license to the PM Patents or the MOD Technology, express or implied, shall be
gained, granted or transferred with regard to the manufacture of cigarettes
incorporating such Banded Cigarette Paper. In addition, prior to acceptance of
the first such order, SWM shall require that the person or entity taking
delivery of such Banded Cigarette Paper complete and return a form, approved by
PMUSA and PMPI, that evidences acknowledgement of such notice and limitation.
SWM shall forward copies of all such acknowledgement forms to PMUSA and PMPI on
a quarterly basis; and

                  (iii)    SWM shall provide PMUSA and PMPI copies of all
sublicenses granted pursuant to Section 9(a)(iv).

SWM shall thereafter be excused from the requirements of Section 9(b)(i) and
Section 9(b)(ii) above if any Third Party Licensee is licensed by PMUSA or PMPI
to manufacture Banded Cigarette Paper pursuant to a license that does not
include requirements substantially equivalent to those contained in Section
9(b)(i) and Section 9(b)(ii) above.

         (c)      Conditions of Sublicenses: Any sublicense granted by SWM
pursuant to Section 9(a)(iv) shall be subject to the following:

                  (i)      [******]

                  (ii)     [******]

CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE
24 b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
OMITTED INFORMATION HAS BEEN REPLACED WITH ASTERISKS.

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<PAGE>   13

                  (iii)    [******]

                  (iv)     [******]


                  (v)      [******]

                  (vi)     [******]

                  (vii)    [******]

         (d)      The grant of licenses to the MOD Technology and the PM Patents
contained herein shall not create any right, implied or otherwise, for SWM to
require the disclosure by PMUSA or PMPI to SWM or any SWM Affiliate of any
document or information respecting the manufacture of Banded Cigarette Paper
that has not already been disclosed to SWM, or that is not disclosed to SWM in
the future, voluntarily or as required by, or in the course of performance of,
any agreement between SWM and PMUSA.

         10.      Protection of Technology and Patents.

         (a)      SWM shall (i) give PMUSA and PMPI prompt notice in writing of
any infringement or possible infringement of the MOD Technology or the PM
Patents that may come to its attention; (ii) assign back to PMUSA and PMPI any
right SWM may acquire through use or otherwise in or to the MOD Technology or
the PM Patents; (iii) upon termination of this Agreement other than upon
expiration, cease to practice the PM Patents; and (iv) render reasonable
assistance, at PMUSA's or PMPI's request and expense, to aid PMUSA or PMPI to
stop any infringement of the PM Patents and the MOD Technology or to otherwise
protect the PM Patents and MOD Technology.


         (b)      SWM shall not acquire nor shall it at any time claim any
right, title or interest in or to the MOD Technology or the PM Patents, other
than the right to use the same as set forth herein and subject to all the terms
and conditions hereof. SWM shall not, and shall cause the SWM Affiliates not to,
at any time do or permit to be done any act [******] MOD Technology or the PM
Patents [******] MOD Technology or the PM Patents; provided, however, nothing
herein shall prevent SWM from pursuing development and commercialization of
Cigarette Paper manufactured utilizing technology other than MOD Technology.
PMUSA or PMPI may, in its sole discretion and at its

CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE
24 b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
OMITTED INFORMATION HAS BEEN REPLACED WITH ASTERISKS.

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<PAGE>   14

expense, take such action as may be necessary or desirable to protect or defend
the value of the MOD Technology or the PM Patents. [******]

         (c)      PMUSA and PMPI will maintain the PM Patents each may hold in
force, including paying maintenance fees, annuity fees, and satisfying any other
requirements necessary to maintain the PM Patents for the full life; provided,
however, neither PMUSA nor PMPI shall be liable to SWM or any third party as the
result of its nonpayment of such fees. If PMUSA or PMPI desires to allow any PM
Patent it may hold to lapse or go abandoned, PMUSA or PMPI, as the case may be,
[******]

         11.      Confidentiality.

         (a)      Non-Disclosure:

         PMUSA, PMPI and SWM each shall make use of the Confidential Information
of the other Parties solely to carry out the purposes and intent of this
Agreement. Except as provided in Section 11(b) below or as required by law, no
Party shall directly or indirectly disclose, or permit its employees or agents
to disclose, the Confidential Information of any other Party hereto and each
Party shall carefully guard and keep secret the Confidential Information of the
other Parties with the same degree of care that it uses to protect its own most
sensitive proprietary information. Confidential Information of the other Parties
shall be disclosed within a Party's organization only on a need-to-know basis.

         Except in connection with the disclosure of MOD Technology to PM
Affiliates pursuant to Section 5(a) and Third Party Licensees who receive
licenses pursuant to Section 5(b) hereof, PMUSA and PMPI shall not disclose any
MOD Technology for Fine Paper manufacture derived from SWM Know-how (as defined
in Section 1(i)) to any other paper manufacturer with respect to the manufacture
of Fine Papers.

         (b)      Exceptions to Non-Disclosure:

The prohibitions on the disclosure of Confidential Information set forth in this
Article 11 shall not apply to any information:

                  (i)      which can be demonstrated to have been in a Party's
possession lawfully prior to receipt of the same from another Party hereunder;
or

                  (ii)     which was received from a third party having no
obligation to hold the same in confidence; or

CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE
24 b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
OMITTED INFORMATION HAS BEEN REPLACED WITH ASTERISKS.


                                      -14-
<PAGE>   15

                  (iii)    which can be demonstrated to have been in the public
domain prior to the date of the disclosure; or

                  (iv)     which after receipt from another Party hereto becomes
public through no fault of the Party receiving the information.

         12.      Records and Accounts.

         SWM shall keep proper and accurate accounts and records of all
quantities of Banded Cigarette Paper sold to persons or entities other than the
PM Affiliates and the PM Contract Manufacturers, commencing with the effective
date hereof and through the expiration of the last to expire of the PM Patents.
Within 30 days after the end of each calendar month and within 30 days after the
termination of this Agreement for any reason, SWM and the SWM Affiliates shall
render to PMUSA and PMPI a written statement setting forth the identities of all
such purchasers of Banded Cigarette Paper and the number of bobbins of Banded
Cigarette Paper sold to each in the most recently completed month (or in the
period prior to termination, if applicable), such statement to be signed by an
authorized representative of SWM or the applicable SWM Affiliate, as the case
may be; provided, however, that SWM's and the SWM Affiliates' obligation to
provide such written statement with respect to any particular purchaser of
Banded Cigarette Paper shall be conditioned on PMUSA or PMPI, as licensor, as
the case may be, providing evidence that such purchaser consents to SWM or the
SWM Affiliates, as the case may be, providing such information to PMUSA and
PMPI. To the extent allowed by law, PMUSA and PMPI, as the case may be, shall
provide SWM with the identities of all licensed Other Cigarette Manufacturers,
the [******] from each and the duration of each license. On request by SWM, but
not more often than once per year, PMUSA and PMPI each shall provide SWM with
a list of their respective affiliates that manufacture cigarettes and of their
respective contractors who are PM Contract Manufacturers.

         13.      Effective Date; Term; Termination.

         (a)      Effective Date; Term: This Agreement shall be effective as of
April 1, 1998, and shall continue in effect through the expiration of the
[******] unless earlier terminated pursuant to the provisions of this Agreement.

         (b)      Early Termination for Cause:

                  (i)      By PMUSA or PMPI. PMUSA or PMPI may terminate this
Agreement immediately in the event that:

                           (1)      [******]

                           (2)      [******]

CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE
24 b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
OMITTED INFORMATION HAS BEEN REPLACED WITH ASTERISKS.


                                      -15-
<PAGE>   16

                  (ii)     By SWM. SWM may terminate this Agreement immediately
in the event that:

                           (1)      [*****]

                           (2)      [*****]

                           (3)      [*****]

         (c)      Termination Upon Insolvency or Nationalization: This Agreement
shall expire and terminate automatically and without notice in the event that:

                  (i)      SWM files a petition in bankruptcy, is adjudicated
bankrupt or files a petition or otherwise seeks relief under or pursuant to any
bankruptcy, insolvency or reorganization statute or proceeding, or if a petition
in bankruptcy is filed against it or if it becomes insolvent or makes an
assignment for the benefit of its creditors, or a custodian, receiver or trustee
is appointed for it or a substantial portion of its business or assets. No
assignee for the benefit of creditors, custodian, receiver, trustee in
bankruptcy, sheriff, or any other officer of the court or official charged with
taking over custody of SWM's assets or business shall have any right to continue
or assume this Agreement or to exploit or in any way use the MOD Technology or
the PM Patents if this Agreement terminates pursuant to this paragraph. Nothing
contained herein shall be deemed to preclude or impair any rights that PMUSA or
PMPI may have as a creditor in any bankruptcy proceeding; or

                  (ii)     SWM or its business is nationalized, in whole or in
part, or the shares of SWM or control over SWM or over any substantial portion
of its assets or over its management is seized by any government or any of its
branches, departments or agencies, including, but not limited to, the military.

         (d)      Effect of Termination: Upon the termination of this Agreement
by PMUSA or PMPI for cause, all of the rights of the Parties granted hereunder
except as expressly reserved in Section 13(e) below and all of the duties and
obligations owed to each other by the Parties hereunder shall terminate
forthwith; [******] Upon the termination of this Agreement by SWM as to PMUSA
for cause, all of the rights of PMUSA granted hereunder except as expressly
reserved in Section 13(e) below and all of the duties and obligations owed to

CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE
24 b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
OMITTED INFORMATION HAS BEEN REPLACED WITH ASTERISKS.


                                      -16-
<PAGE>   17

PMUSA by SWM hereunder shall terminate forthwith. Upon the termination of this
Agreement by SWM as to PMPI for cause, all of the rights of PMPI granted
hereunder except as expressly reserved in Section 13(e) below and all of the
duties and obligations owed to PMPI by SWM hereunder shall terminate forthwith.
Notwithstanding the preceding three sentences, the expiration or termination of
this Agreement for any reason shall not release any Party hereto from any
liability which, at the time of expiration or termination, had already accrued
to another Party or which may accrue thereafter in respect of any act or
omission occurring prior to such expiration or termination. Notwithstanding any
termination in accordance with this Section, the Parties shall have and hereby
reserve all rights and remedies which each may have, or which each may be
granted by operation of law, including, but not limited to, the right to be
compensated for damages for breach of this Agreement.

         (e)      Survival: The Parties' rights and obligations under Article 3,
Article 5, Section 9(a)(iii) and Article 11 shall survive the expiration,
cancellation or termination of this Agreement.

         14.      Notices. All notices, requests, demands, approvals, consents
or other communications under this Agreement shall be in writing and delivered
in person, by telefax or telex, by overnight courier service or by registered or
certified mail, return receipt requested, to the following addresses or such
other address or addresses as either party shall designate with respect to its
own address:

         If to PMUSA:

         Philip Morris Incorporated
         Box 26603
         Richmond, VA 23261
         Telefax: (804) 274-4068
         Attention:  Manager - Cigarette Components, Direct Materials
                               Purchasing

         If to PMPI:

         Philip Morris International Inc.
         800 Westchester Avenue
         Rye Brook, NY 10573-1301
         Telefax:  (914) 335-9374
         Attention:  General Counsel

         If to SWM:

         100 North Point Center East
         Suite 600
         Alpharetta, Georgia  30022
         Telefax:  (770) 569-4212

CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE
24 b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
OMITTED INFORMATION HAS BEEN REPLACED WITH ASTERISKS.


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<PAGE>   18

         Attention: President, U.S. Operations
         Copy to: General Counsel

         15.      Governing Law; Arbitration.

         (a)      Governing Law: The provisions of this Agreement shall be
governed by and construed in accordance with the laws of the Commonwealth of
Virginia, without regard for provisions respecting choice of law.

         (b)      Arbitration: It is the intention of the Parties to make a good
faith effort to resolve any dispute, controversy, claim or question arising
under this Agreement. The Parties each shall use their best efforts to resolve
any dispute, whether resolved by negotiation or arbitration, in the most
expeditious manner reasonably possible. In the event of a dispute that cannot be
promptly resolved by the Parties' regular representatives, any Party may elect
to abandon negotiations. Any and all such disputes (other than disputes
involving SWM's alleged breach of the covenants in Section 6(a) or 6(b) hereof,
or a dispute involving the right of any Party to terminate this Agreement for
cause or otherwise) shall be finally settled under the Rules of Conciliation and
Arbitration of the International Chamber of Commerce ("ICC Rules of
Arbitration") presently in force at the time of the dispute. There shall be
three arbitrators who all must be fluent in the English language. PMUSA and
PMPI, on the one hand, and SWM on the other, each shall nominate in the Request
for Arbitration and the Answer thereto, respectively, one arbitrator for
confirmation by the ICC Court of Arbitration. If a Party fails to nominate an
arbitrator, the appointment shall be made by the ICC Court of Arbitration. The
third arbitrator, who shall serve as chairman of the arbitral tribunal, will be
appointed by the first two arbitrators in accordance with Article 2(4) of the
ICC Rules of Arbitration. If the two party-appointed arbitrators fail to appoint
the third presiding arbitrator, the third arbitrator will be appointed by the
Appointing Authority in accordance with Article 2(4) of the ICC Rules of
Arbitration. The place of arbitration shall be Richmond, Virginia, and the
arbitration shall be conducted in the English language. All documents in another
language shall be accompanied by an English language translation. Any award of
the arbitrators shall be enforceable by any court of competent jurisdiction.

         16.      Representations and Warranties.

         In addition to their other representations, warranties and covenants
elsewhere herein contained, the Parties represent, each to the other, as
follows:

         (a)      PMUSA: PMUSA represents and warrants that it has full right,
power and authority to enter into this Agreement and to perform all of its
obligations hereunder.

         (b)      PMPI: PMPI represents and warrants that it has full right,
power and authority to enter into this Agreement and to perform all of its
obligations hereunder.

         (c)      SWM: SWM represents and warrants that it has full right, power
and authority to enter into this Agreement and to perform all of its obligations
hereunder.

CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE
24 b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
OMITTED INFORMATION HAS BEEN REPLACED WITH ASTERISKS.


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<PAGE>   19

         17.      Amendment.

         This Agreement shall not be modified or amended except by an agreement
in writing signed by the authorized representatives of each of the Parties
hereto.

         18.      Binding Effect; Assignments.

         This Agreement shall be binding upon and shall inure to the benefit of
the Parties and their respective successors and assigns, provided that SWM shall
not assign this Agreement or any part of its interest herein except with the
prior written consent of PMUSA and PMPI.

         19.      Final Agreement.

         This Agreement sets forth the entire agreement of the Parties with
respect to its subject matter and supersedes any and all prior understandings
and agreements with respect to such subject matter.

         20.      Counterparts.

         This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, and all of such counterparts shall constitute
but one and the same agreement.

         21.      No Rights of Third Parties.

         Except as specifically contemplated herein, this Agreement shall not be
deemed to confer any rights or benefits on any person or entity not a Party to
this Agreement.

         22.      Partial Invalidity.

         If one or more provisions of this Agreement shall be invalid, illegal
or unenforceable in any respect in any jurisdiction or with respect to any
Party, such invalidity, illegality or unenforceability in such jurisdiction or
with respect to such Party shall not, to the fullest extent permitted by
applicable law, invalidate or render illegal or unenforceable such provision in
any other jurisdiction or with respect to any other party, or any other
provision of this Agreement. To the fullest extent it may effectively do so
under applicable law, each of the Parties hereto waives any provision of law
which renders any provision hereof invalid or illegal in any respect.

         23.      No Waiver; Cumulative Remedies.

         No delay or omission or failure to exercise, or any abandonment or
discontinuance of steps to enforce any right or remedy provided for herein shall
be deemed to be a waiver thereof or acquiescence in the event giving rise to
such right or remedy, but every such right and remedy may be exercised from time
to time and so often as may be deemed expedient by the Party exercising such
right or remedy. The rights and remedies provided herein are cumulative and not
exclusive of any remedies provided at law or in equity.

CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE
24 b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
OMITTED INFORMATION HAS BEEN REPLACED WITH ASTERISKS.


                                      -19-
<PAGE>   20

24. Relationship of the Parties.

         Except as provided in Article 8, nothing contained herein shall be
construed to create a partnership, joint venture or agency relationship between
PMUSA and PMPI, on the one hand, and SWM, on the other, and no Party shall
become bound by any representation, act or omission of any other.

25. Obligation of PM Affiliates.

         The obligations of each of PMUSA and PMPI hereunder shall be several
not joint. Neither PMUSA nor PMPI shall be liable to SWM or any SWM Affiliate
for the non-performance or breach hereof by the other, and no act or omission
that constitutes a breach hereof by one of PMUSA or PMPI shall be deemed to
constitute a breach hereof by the other.

         IN WITNESS WHEREOF, the Parties hereto have caused these presents to be
signed and their corporate seals to be hereunto affixed as of the day and year
first above written.

                                  PHILIP MORRIS INCORPORATED (Seal)

                                  By:
                                     -------------------------------------------

                                  Title:
                                        ----------------------------------------



                                  PHILIP MORRIS PRODUCTS INC. (Seal)

                                  By:
                                     -------------------------------------------

                                  Title:
                                        ----------------------------------------



                                  SCHWEITZER MAUDUIT INTERNATIONAL, INC. (Seal)


                                  By:
                                     -------------------------------------------

                                  Title:
                                        ----------------------------------------


CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE
24 b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
OMITTED INFORMATION HAS BEEN REPLACED WITH ASTERISKS.


                                      -20-
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                                  ATTACHMENT A

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CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE
24 b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
OMITTED INFORMATION HAS BEEN REPLACED WITH ASTERISKS.


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CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE
24 b-2, PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
OMITTED INFORMATION HAS BEEN REPLACED WITH ASTERISKS.


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