EXHIBIT 10.31

                               BOLLORE TECHNOLOGIES S.A.
                               3750 Avenue Jules Panchot
                                    66004 PERPIGNAN
                                         France



                           North Atlantic Operating Company, Inc.
                           257 Park Avenue South
                           7th floor
                           NEW YORK
                           NY 10010



                                                                October 22, 1997


Gentlemen,

         Reference is made to the three Amended and Restated Distribution and
License Agreements (collectively, the "Distribution Agreements") each dated as
of November 30, 1992 between us relating to the distribution of Zig Zag
cigarette paper booklets in the United States (the "U.S. Agreement"), in Canada
(the "Canadian Agreement") and in Hong Kong and certain other territories (the
"Asian Agreement"), as amended by a Restated Amendment dated June 25, 1997 (the
"Restated Amendment"). This will confirm our agreement to amend the Distribution
Agreements as of January 1, 1998 as follows:

1.       The paragraph beneath the caption "INITIAL PRICE FOR ALL PRODUCTS" set
         forth on Schedule A to the U.S. Agreement and on Schedule A to the
         Asian Agreement (as set forth in Section 10 of the Restated Amendment)
         shall be deleted in its entirety and the following shall be inserted in
         lieu thereof:

         "[**] (subject to the [**] referred to in (ii) below); provided, that
         for purposes of the foregoing calculations (and the [**] referred to in
         (ii) below), if any booklets are shipped in one calendar year but are
         paid for in the next subsequent calendar year, then such booklets shall
         be deemed to have been both shipped and paid for in such subsequent
         calendar year: provided, further, that for purposes of the foregoing
         calculations (and the [**] referred to in (ii) below),


<PAGE>

         if any booklets are paid for in one calendar year but are shipped in
         the next subsequent calendar year, then such booklets shall be deemed
         to have been both shipped and paid for in such subsequent calendar
         year. Notwithstanding the foregoing, (i) [**] and for each calendar
         year thereafter, [**] of the total number of booklets shipped and paid
         for in the immediately preceding calendar year and (b) the Base Amount.
         For example, if during a calendar year, [**] the Distributor would be
         entitled to receive the [**] for the next subsequent calendar year for
         [**] shipped and paid for within such next subsequent calendar year in
         excess of the Base Amount. This calculation is based on determining
         [**]."

2.       The paragraph beneath the caption "INITIAL PRICE FOR ALL PRODUCTS" set
         forth on SCHEDULE A to the Canadian Agreement (as set forth in Section
         11 of the Restated Amendment) shall be deleted in its entirety and the
         following shall be inserted in lieu thereof:

         "[**] (subject to the [**] referred to in (ii) below); provided, that
         for purposes of the foregoing calculations (and the [**] referred to in
         (ii) below), if any booklets are shipped in one calendar year but are
         paid for in the next subsequent calendar year, then such booklets shall
         be deemed to have been both shipped and paid for in one calendar year;
         provided, further, that for purposes of the foregoing calculations (and
         the [**] referred to in (ii) below), if any booklets are paid for in
         one calendar year but are shipped in the next subsequent calendar year,
         then such booklets shall be deemed to have been both shipped and paid
         for in such subsequent calendar year. Notwithstanding the foregoing (i)
         [**] and for each calendar year thereafter, [**] of the total number of
         booklets shipped and paid for in the immediately preceding calendar
         year and (b) the Base Amount. For example, if during a calendar year,
         [**] the Distributor would be entitled to receive the [**] for the next
         subsequent calendar year for [**] shipped and paid for within such next
         subsequent calendar year in excess of the Base Amount. This calculation
         is based on determining [**]."

3.       Notwithstanding the above amendments, the parties acknowledge that the
         price for all booklets shipped in 1997 (regardless of when paid) shall
         be calculated



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<PAGE>

         based on the terms of the Distribution Agreements in
         effect prior to this amendment.

4.       Each of us represents and warrants to the other that this amendment has
         been duly authorized by all necessary corporate action and that any
         consents required by either party in connection with this amendment
         have been obtained by such party.

5.       Except as modified by this amendment, the terms and provisions of each
         of the Distribution Agreements shall remain in full force and effect.

         If the foregoing accurately reflects our understanding, please
         countersign where indicated below.

                                               Very truly yours,

                                               BOLLORE TECHNOLOGIES S.A.



                                               By:     /s/ VINCENT BOLLORE
                                                    ----------------------------
                                                    Name:  Vincent BOLLORE
                                                    Title: President Directeur
                                                           General


Agreed:

NORTH ATLANTIC OPERATING COMPANY INC.



By:  /s/ THOMAS F. HELMS, JR.
     ---------------------------------      
  Name:  Thomas F. Helms, Jr.
  Title: President and Chief
         Executive Officer



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