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                             JOINT VENTURE CONTRACT






                               NOVEMBER 11TH, 1996




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                                TABLE OF CONTENTS
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CHAPTER 1  GENERAL PROVISION

CHAPTER 2  PARTIES TO THE JOINT VENTURE

CHAPTER 3  ESTABLISHMENT OF THE JOINT VENTURE

CHAPTER 4  PURPOSES, SCOPE AND SCALE OF PRODUCTION AND BUSINESS

CHAPTER 5  TOTAL AMOUNT OF INVESTMENT AND REGISTERED CAPITAL

CHAPTER 6  RESPONSIBILITIES OF THE PARTIES

CHAPTER 7  SALES OF PRODUCTS

CHAPTER 8  BOARD OF DIRECTORS

CHAPTER 9  BUSINESS MANAGEMENT ORGANIZATION

CHAPTER 10 PURCHASE OF EQUIPMENT, RAW MATERIALS, LAND LEASING

CHAPTER 11 LABOR MANAGEMENT

CHAPTER 12 TAXES, FINANCE AND AUDIT

CHAPTER 13 FOREIGN EXCHANGE CONTROL

CHAPTER 14 DURATION OF THE JOINT VENTURE

CHAPTER 15 DISPOSAL OF ASSETS UPON EXPIRATION OF THE DURATION

CHAPTER 16 INSURANCE

CHAPTER 17 AMENDMENT, ALTERATION AND TERMINATION OF THE CONTRACT

CHAPTER 18 LIABILITIES FOR BREACH OF THE CONTRACT

CHAPTER 19 FORCE MAJEURE

CHAPTER 20 APPLICABLE LAW

CHAPTER 21 DISPUTE RESOLUTION

CHAPTER 22 LANGUAGE

CHAPTER 23 EFFECTIVENESS OF CONTRACT AND MISCELLANEOUS
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                          CHAPTER 1: GENERAL PROVISIONS
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ART. 1.1  In accordance  with the "Law of the P.R.  China on Joint Venture Using
          Chinese and Foreign  Investment" and other relevant published laws and
          regulations of China, the following Parties

          Party A: Chinese Party:
          Party B: Foreign Party:

          have agreed to invest in the Joint Venture Enterprise:

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                     CHAPTER 2: PARTIES TO THE JOINT VENTURE
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ART. 2.1   Parties to the Joint Venture under this contract are as follows:

           Party A: Chinese Party:

           legal representative:
           nationality:
           title:

           Party B: Foreign Party:

           legal representative:
           nationality:
           title:

           Parties A and B may as the contract requires be herein after referred
           to individually as a "Party" and collectively as the "Parties."

           Each of the Parties  hereby  presents and warrants to the other Party
           that it has full  legal  authority  and the power to enter  into this
           contract  and  perform  its   obligations   hereunder  and  that  its
           representation  named above is duly  authorized to sign this contract
           and other relevant documents on behalf of such Party.

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                  CHAPTER 3: ESTABLISHMENT OF THE JOINT VENTURE
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ART. 3.1   In accordance  "Law of the P.R.  China on Joint Venture Using Chinese
           and  Foreign  Investment"  and  other  relevant  published  laws  and
           regulations,  the Parties agree to establish a Joint Venture  Limited
           Liability Company (hereinafter referred to as "Joint Venture") within
           the Chinese territory.

ART. 3.2   The name of the Joint Venture in English shall be:

           The legal address of the Joint Venture shall be in:

               If needed,  through the  discussion and the decision of the Board
               of Directors,  the Joint Venture will establish  offices in other
               places of China, Hong Kong or other countries and regions.

ART. 3.3   All activities of the Joint Venture in China shall be governed by the
           laws,  decrees and  relevant  rules and  regulations  of the People's
           Republic of China.
<PAGE>
ART. 3.4   The form of  organization  of the  Joint  Venture  shall be a limited
           liability  company.  The liability of each Party is limited to making
           contribution  to the registered  capital in accordance with CHAPTER 5
           of this  contract,  including each Party's stake in all other capital
           increases decided in compliance with the Chinese regulations,  and no
           Party  shall  have  any  liability  of any  sort  for the  debts  and
           obligations  of the Joint  Venture.  The profits of the Joint Venture
           shall be shared by the  Parties  in  proportion  to their  respective
           subscribed  contributions  to the  registered  capital  of the  Joint
           Venture.  During the first  three (3) years of the Joint  Venture the
           profits  shall be  shared  33.3% by Party A and 67.7% by Party B. The
           liability  of each  Party to the Joint  Venture  is limited up to the
           Parties  respective  contribution  of the  registered  capital of the
           Joint Venture.

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         CHAPTER 4: PURPOSES, SCOPE AND SCALE OF PRODUCTION AND BUSINESS
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ART.4.1    The purposes of the Joint Venture  shall be, in  conformity  with the
           wish of strengthening  economic  cooperation and technical exchanges,
           to improve the product quality and the production  capacity,  develop
           new products and gain  competitive  position in both the domestic and
           international  markets  in  quality,  variety  and price by  adopting
           advanced  technology  in  the  production  of  beer,  and  scientific
           management  methods,  so as to constantly  raise economic results and
           ensure satisfactory economic benefits for each Party.

ART.4.2    The scope of production and business of the Joint Venture shall be to
           produce and sell beer in glass bottles and in cans. The products made
           by the Joint Venture shall be sold on the domestic market.  The Joint
           Venture will, on a best efforts basis,  investigate the possibilities
           of selling some of the production on the export market.

ART. 4.3   The production scale of the Joint Venture shall be as follows:
           -  Rehabilitation  of  the  existing  brewery  which  has  a  current
           production capacity of 14,000 metric tons a year.
           - Improvement of the beer currently produced.
           - Production  increase  from 14,0000 tons to 30,000 tons a year.  The
           future  expansion  shall be decided in future board of directors  and
           will depend upon the evolution of the national  beverages market. The
           board of directors of the Joint Venture shall have complete  autonomy
           in  formulating  and executing  the Joint  Venture's  investment  and
           marketing policies in order to achieve these goals, and may expand or
           reduce the Joint Venture's scale of production in accordance with its
           business situation and market demands.

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               CHAPTER 5: TOTAL INVESTMENT AND REGISTERED CAPITAL
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ART. 5.1   The total amount of the investment and the registered  capital of the
           Joint Venture is three million  three hundred  thousand U.S.  DOLLARS
           ($3,300,000 US DOLLARS).  Party A shall  contribute one million three
           hundred thousand US DOLLARS  ($1,300,000  U.S.  DOLLARS) and hold 40%
           shares. Party B shall contribute two million U.S. DOLLARS ($2,000,000
           US DOLLARS) and hold 60% shares.  Without the written  consent of the
           other  Party,  no Party shall pledge the interest of the other Party.
           Without the permission of the one Party, any Party cannot be required
           to guarantee  the loans of the Joint  Venture or to  implement  other
           responsibilities.
<PAGE>
ART. 5.2   Contribution  to the registered  capital:  Party A: by existing fixed
           assets,  including a beer brewery as described in annex 1 for a total
           value of one million three hundred thousand US DOLLARS ($1,300,000 US
           DOLLARS)  with is 40% of the  registered  capital.  Party  B: by cash
           seven hundred thousand US DOLLARS ($700,000 US DOLLARS), machines and
           technical  equipment for a value of one million two hundred and fifty
           thousand  US  DOLLARS  ($1,250,000  US  DOLLARS)  which is 60% of the
           registered capital.

ART. 5.3   Party  A shall  pay  its  equity  contribution  in kind to the  Joint
           Venture by transferring  its ownership and using rights  described in
           annex 1 from the "Qidong  Brewery"  to the Joint  Venture for a total
           value of one million three hundred  thousand US DOLLARS  ($1,3000,000
           US DOLLARS).  Such payment in kind to occur after the issuance of the
           Business License.

ART. 5.4   Party B shall be under no obligation  to subscribe to the  registered
           capital unless and until the  conditions as described  hereafter have
           been fully fulfilled: in each case in form and substance satisfactory
           to the Party B after having received all the necessary approvals from
           the relevant Chinese authorities:

           a.  Establishment of the Joint Venture Company.

           b. This  contract  and its annex have been  approved by the  relevant
           Chinese Authorities.
           c.  Issuance  of  the  Business   Licence  to  the  relevant  Chinese
           Authorities,  duly certified as a true copy by an authorized  officer
           of Party A.
           d. Transfer of ownership and using rights of the "Qidong  Brewery" in
           favor of the newly formed Joint Venture Company ... as stated in ART.
           5.2.
           e. After receipt of the Business  Licence as referred in ART. 5.4(c),
           receipt  by the  Parties  of a  copy  of the  approval  of the  State
           Administration  of Exchange Control  authorizing the Joint Venture to
           have access to the SWAP  CENTERS,  and  granting  the Joint  Venture,
           during the Joint Venture, the right to convert Renmimbi (RMB) into US
           DOLLARS  at a foreign  exchange  bank  authorized  by the P.R.  China
           government,  sufficient to pay all amounts in foreign currency due by
           the Joint  Venture,  such as raw materials,  dividends,  debt service
           installments,   salaries  of  expatriate  staff,  fees,  transfer  of
           technology. If any of the above mentioned conditions is not fulfilled
           within three months after the Business License issuance date, and the
           Parties do not agree in writing to waive such conditions precedent or
           to extend the time for their fulfillment, either Party shall have the
           right to terminate this  contract,  in which case neither Party shall
           have the right  whatsoever  to  require  the other  Party to make any
           contribution  to the registered  capital or to claim any damages from
           the other Party.

ART. 5.5   The payment to be made by Party B regarding its  contribution  to the
           registered  capital  of the  Joint  Venture  Company  will be made as
           follows:

           a. 75% of its  capital  contribution  within  three (3) months of the
           fulfillment of all the conditions as stipulated in ART. 5.4 above.

           b. 25% shall be effected in accordance with requirements of the Joint
           Venture capital expenditures,  to occur not later than six (6) months
           after the payment as mentioned in ART. 5.5(a).

ART. 5.6   After the registered capital is paid up by the Parties, an accounting
           firm  registered in China  appointed by the Parties shall verify that
           contributions  of this contract have been made in accordance with the
           terms  and  conditions  of this  Contract  and  issue a  verification
           report,  based on which the Joint  Venture  shall issue an investment
           certificate  to each  Party.  This  report will be signed by both the
           President and the Vice President of the Joint Venture.

ART. 5.7   Should a Party  intend to assign all or part of its  interest  in the
           Joint Venture to a third Party, written consent must be obtained from
           the other Party and an affirmative decision by the Board of Directors
           and approval from the appropriate  examination and approval authority
           shall be required. The registration  procedures for the changes shall
           be dealt with. In this procedure,  the Parties will have a preemption
           right.  The  Parties  however  will  have the right to  transfer  the
           ownership of their  shares to any  subsidiary  or holding  company in
           which they have the majority of the shares.
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                   CHAPTER 6: RESPONSIBILITIES OF THE PARTIES
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ART. 6.1  Responsibilities of the Chinese Party:

           a. In charge of applying for and obtaining the approval, registration
           and Business License and dealing with other formalities with relevant
           Chinese Governmental  Departments for the establishment and operation
           of the Joint Venture and for obtaining the best advantages granted to
           sino-foreign joint ventures.
           b. Making capital  contributions  at the specified time in accordance
           with ART. 5.2 and ART. 5.3 hereof.
           c. At the request of the Joint Venture Company, assisting to purchase
           equipment,  materials,  office facility,  transportation facility and
           communication facility.
           d. At the request of the Joint Venture Company, assisting to purchase
           equipment,  materials,  office facility,  transportation facility and
           communication facility.
           e. Assisting foreign staff in applying for entry visas, work permits,
           and processing their travel documents.
           f.  Assisting to recruit for the Joint Venture the local staff in all
           level of management and workers.
           g.  Assisting  the Joint  Venture  Company in obtaining a loan from a
           local bank for the working capital.
           h.  Assisting  the Joint  Venture in  selling  and  distributing  the
           products  in  the  local  market.  Assisting  the  joint  venture  in
           purchasing  the necessary  quantities of raw materials  annually,  at
           prices not higher than other factories in the region.
           i.  Dealing  with  affairs  under  this  contract  and other  affairs
           entrusted by the Joint Venture Company.
           j. Party A guarantees  that it will not enter into  competition  with
           the Joint Venture Company.

ART. 6.2   Responsibilities of the Foreign Party.

           a. Making capital contributions in accordance with ART. 5.2, ART. 5.4
           and ART. 5.5.
           b. Assisting the Joint Venture in purchasing equipment, raw materials
           and other items outside China.
           c. Making its best effort in assisting the Joint Venture in exporting
           its products and assisting the Joint Venture with  information  about
           the international market for similar and related products.
           d.  Providing the Joint Venture with foreign  experienced  management
           personnel,  including the General Manager, the production manager and
           the  financial  manager  and  participating  in  the  production  and
           business activities of the Joint Venture Company.
           e.  Causing  the Joint  Venture  to  obtain  equipment  and  detailed
           engineering  design of the Joint Venture  factory within the scope of
           total  investment  and  registered  capital  set  forth in  CHAPTER 5
           hereof.
           f.  Assisting  the  Joint  Venture  in  purchasing   equipment,   raw
           materials,  articles for office use, means of  transportation,  all o
           the best terms and prices attainable.
           g.  Assisting the Joint  Venture in recruiting  the local and foreign
           staff in all levels of the management and workers.
           h. Handling other matters entrusted by the Joint Venture Company.
           i. Transfer of technology  and know how: as the know how has not been
           valued as fixed  assets,  a  Technical  Assistance  Contract  will be
           concluded upon the signing of the Technical  Assistance  Contract the
           Foreign Party will be  responsible  for the training of the personnel
           working in the Joint Venture Company.
<PAGE>

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                          CHAPTER 7: SALES OF PRODUCTS
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ART. 7.1   The  products  of the  Joint  Venture  shall  be sold on the  Chinese
           markets  and the best  efforts  will be made in order to sell part of
           the production on the overseas markets.

ART. 7.2   The  products  of the  Joint  Venture  shall be sold  throughout  the
           People's Republic of China without geographic  restriction and may be
           sold by the Joint Venture  directly or by  appropriate  distributors.
           The sales  methods  and prices  shall be  determined  by the  General
           Manager's decision following recommendation of the board of directors
           with respect to domestic market  conditions,  competitiveness  of the
           prodecuts and the economic situation of the Joint Venture.  The Joint
           Venture shall be free to determine  and raise the selling  prices of,
           and sell at its own  discretion,  in  accordance  with the  preceding
           provisions.

ART. 7.3   The sales of its products,  both on Chinese and on overseas  markets,
           shall be managed by the Joint  Venture.  The Joint  Venture  Company,
           with the  assistance  of the  Foreign  Party,  will  endeavor to seek
           export markets for the Joint Venture products.

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                          CHAPTER 8: BOARD OF DIRECTORS
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ART. 8.1   The board of directors  shall be  established  within one month after
           the date of issuance of the Business License.

ART. 8.2   The board of directors  shall  consist of five (5) directors of which
           two (2)  shall  be  appointed  by  Party A and  three  (3)  shall  be
           appointed by the foreign partner.  The chairman of the board shall be
           appointed  by Party A and the vice  chairman  by Party B. The term of
           the  directors is four (4) years.  This term of office may be renewed
           upon reappointment by the appointing party.

ART. 8.3   The  highest  authority  of the Joint  Venture  shall be its board of
           directors.  It shall  decide all major  issues  concerning  the Joint
           Venture.  In handling all important  matters,  the board of directors
           shall reach its decision through  consultation among the participants
           in the  principle  of equity  and mutual  benefit.  All issues of the
           Joint  Venture  shall be discussed  and approved by two thirds of the
           members of the board of directors.

           The following major issues will require the unanimous approval of all
           the members of the board:
           a. Amendment of the articles of association of the joint venture.
           b. Termination and dissolution of the Joint Venture.
           c. An increase of the  registered  capital of the Joint Venture and a
           transfer of the ownership.
           d. Merger of the Joint Venture with another economic organization.

ART. 8.4   The  chairman of the board is the legal  representative  of the joint
           venture.   Should   the   chairman   be   unable  to   exercise   his
           responsibilities,  he should authorize the vice chairman of the board
           of directors to represent the Joint Venture.

ART. 8.5   The board of directors  shall convene at least on meeting every year.
           The meeting  shall be called and presided over by the chairman of the
           board.  The general  manager  and the deputy  general  manager  could
           attend the meeting. The board meeting can be held at a site as agreed
           upon by the Parties to the Joint Venture. The Chairman may convene an
           interim  meeting based on proposal made by more than one third of the
           directors.  The  minutes of all  meetings  will be kept on file.  The
           directors  will  have the  right to be  represented  by a  designated
           representative.
<PAGE>
ART. 8.6    A decision  signed by all the members of the board of  directors has
           the same  validity  as a  decision  taken  during an  official  board
           meeting.

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                   CHAPTER 9: BUSINESS MANAGEMENT ORGANIZATION
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ART. 9.1   The Joint Venture shall establish a management  office which shall be
           responsible  for its daily  management.  The management  office shall
           have a general  manager  and a deputy  general  manager.  The general
           manager shall be recommended by the Foreign Party; the deputy general
           manager shall be recommended by the Chinese Party. The term of office
           shall be three (3) years.

ART. 9.2   The responsibilities of the general manager shall be to carry out the
           decisions  of the  board,  and  to  organize  and  direct  the  daily
           management of the Joint Venture in accordance  with the provisions of
           this  contract and the articles of  association.  The deputy  general
           manager  shall  assist  the  general  manager  in  such  duties.  The
           department  managers  shall  be  responsible  for  the  work  in  the
           respective departments of production, technology, business operation,
           finance and  administration,  handle the  matters  handed over by the
           general  manager and the deputy  manager and shall be  accountable to
           them. The general  manager shall be present for approval by the board
           of directors organizational structure of the Joint Venture and budget
           for the coming year,  including  proposed  appointments of department
           managers as well as their remuneration.

ART. 9.3   The general  manager and deputy  general  manager  shall not serve as
           employees of other entities,  and shall not serve or act on behalf of
           other economic  entities in competition with the Joint Venture except
           that either of them may be an officer,  director or employee of their
           respective  Party.  The board of  directors  shall  have the power to
           dismiss the general  manager  and the deputy  general  manager in the
           event of graft or serious dereliction of duty.

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         CHAPTER 10: PURCHASE OF EQUIPMENT, RAW MATERIALS, LAND LEASING
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ART. 10.1  The Joint Venture will  purchase  required  equipment  transportation
           facilities,  fuels and  articles  for office use in China and abroad,
           but shall give first  priority to  purchase in China when  conditions
           (quality, price, time of deliver, compatibility and so forth) are the
           same.

ART. 10.2  The Joint  Venture  will  purchase  abroad  equipment  which has been
           approved by all Parties.  The equipment should be in line with 1990's
           technology  and the price  should be lower than or same as the one of
           similar equipment.

ART. 10.3  The Joint  Venture  will  sign  after  three  (3) years a Land  Lease
           Agreement with Party A which is annexed to this contract as Annex 2.

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                          CHAPTER 11: LABOR MANAGEMENT
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ART. 11.1  Policies  relating  to  matters  as  the  total  number  of  workers,
           recruitment,  dismissal,  wages, welfare,  benefits, labor insurance,
           bonuses  and labor  discipline  shall be  determined  by the  general
           manager in accordance with Labor Law of the P.R. China, the "People's
           Republic  of China  Administration  on Labor  Management  of  Foreign
           Investment  Enterprises  Provisions" and other  promulgated  relevant
           P.R. China laws and regulations, the policies stipulated by the board
           of  directors,  and the  actual  financial  conditions  of the  Joint
           Venture.
<PAGE>
ART. 11.2  The Joint Venture shall have the right to recruit and hire  employees
           directly from any available  sources in the P.R. China. In all cases,
           the  Joint  Venture  shall  employ  only  those   employees  who  are
           sufficiently  qualified for employment,  as determined  through tests
           and/or examinations.

ART. 11.3  The Joint  Venture,  acting  through the general  manager,  will sign
           individual  labor  contracts with each of its  employees.  Each labor
           contract shall include type of work,  technical  ability and wages of
           such employee,  according to the framework duly approved by the board
           of  directors,  and shall be filed for  reference  at the local labor
           management department.

ART. 11.4  The  employees of the Joint Venture shall have the right to establish
           a labor  union  in  accordance  with  relevant  P.R.  China  laws and
           regulations.  The labor union shall have the right to  represent  the
           interest of employees in signing labor  agreement and in  supervising
           the execution of labor contracts.  It shall have the right to protect
           the legal rights and material  benefits of the  employees,  and shall
           assist in the  mediation  of labor  disputes  when  requested  by the
           relevant employee or the Joint Venture.

ART. 11.5  The  labor  contracts  of all  staff and  workers  likely to  receive
           confidential  information  and/or particular  training from the Joint
           Venture or from Party B shall include, in addition to confidentiality
           undertakings,  non-competition  clauses  pursuant to which they shall
           not be entitled to work for an enterprise or organization in the same
           field for a period of two (2) years after leaving the Joint Venture.

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            CHAPTER 12: TAXES, FINANCE, AUDIT AND PROFIT DISTRIBUTION
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ART. 12.1  The Joint Venture shall pay various taxes in accordance with relevant
           Chinese laws and regulations.

ART. 12.2  Staff members and workers of the Joint  Venture shall be  responsible
           for  paying  their  own  individual  income  tax or  personal  income
           adjustment  tax  in  accordance   with  relevant   Chinese  laws  and
           regulations. After paying their taxes, the ex patriate members of the
           Joint Venture can remit their money abroad.

ART. 12.3  In accordance with the "Laws of the People's Republic of China on the
           Joint Ventures using Chines and Foreign Investment,"  allocations for
           a reserve  fund,  an  enterprise  expansion  fund and a  bonuses  and
           welfare fund for the staff and workers  shall be decided by the board
           of directors each year according to the actual business situation and
           profitability of the Joint Venture of the after tax profit (the total
           of these 3 funds will not exceed 8% of the total  profit).  The Joint
           Venture will benefit of all the best fiscal  privileges  available in
           Jiangsu  Province  and namely the statute of an  advanced  technology
           enterprise.

 ART. 12.4 Finance  and  accounting  of the Joint  Venture  shall be  handled in
           accordance with the "Regulations of the People's Republic of China on
           the Financial  Administration for Foreign Investment Enterprises" and
           the "Accounting System for the Foreign  Investment  Enterprises." The
           fiscal year of the Joint  Venture shall be from January 1 to December
           31 of each year.  All  vouchers,  receipts,  statistical  statements,
           reports and account books shall be written in Chinese,  provided that
           any such documents  upon request of Party B shall be translated  into
           English.  Monthly,  quarterly and annual  financial  reports shall be
           prepared  in  Chinese  and  English  and  submitted  to the  board of
           directors.
<PAGE>
ART. 12.5  The Joint  Venture  shall engage an  accountant  registered  in China
           agreed upon by both Parties to conduct its annual financial audit and
           examination  and to provide a report for  submission  to the board of
           directors  and  the  general  manager,  in the  event  that  Party  B
           considers it necessary, a foreign auditor may be engaged to conduct a
           separate annual financial audit.

ART. 12.6  All  disbursements  shall be signed  by the  general  manager  or his
           authorized personnel.

ART. 12.7  Within the first  three (3) months of each fiscal  year,  the general
           manager  shall  organize  the  preparation  of a balance  sheet and a
           profit and loss statement in respect of the preceding year as well as
           a proposal regarding the allocation and distribution of profits,  and
           submit  them to the  board of  directors  for  approval  after  being
           examined and signed by the  auditor.  Dividends to be paid to Foreign
           Party shall be transferred in foreign currencies.

ART. 12.8  Upon the decision of the board of  directors,  the Joint Venture will
           distribute  dividends to the  shareholders  proportionately  to their
           shareholding.  During the first three (3) years of the Joint Venture,
           the profits will be shares 67.7% by Party B and 33.3% by Party A.

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                      CHAPTER 13: FOREIGN EXCHANGE CONTROL
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ART. 13.1  All foreign exchange matters of the Joint Venture shall be handled in
           accordance with the provision of the "Provisional  Regulations of the
           People's  Republic  of China on  Foreign  Exchange  Conto"  and other
           relevant regulations. The Joint Venture shall remit the profit due to
           the Foreign  Party to bank  accounts  designated by the Foreign Party
           respectively  in  accordance  with the  "Regulations  of the People's
           Republic of China on the Foreign Exchange Control."

ART. 13.2  The Joint  Venture  is  entitled  to open  foreign  exchange  deposit
           accounts  and  Renminbi  deposit  accounts  with the Bank of China or
           other designated  banks.  All foreign exchange  receipts of the Joint
           Venture (including capital  contributions made by Party B, loans from
           foreign banks,  export revenues,  and so forth) shall be deposited in
           the Joint Venture's  foreign  exchange  deposit  account.  All normal
           foreign exchange  disbursements,  as listed herebelow but not limited
           to, by order of priority:  - principal  and interest  repayments  for
           foreign bank loans. - import of raw materials.  - salaries of foreign
           staff,  overseas traveling expenses. - technical assistance contract.
           - transportation expenses. - dividends to the Foreign Party.

ART. 13.3  Based on its business  needs,  the Joint  Venture may borrow  foreign
           exchange  funds from banks abroad or in Hong Kong,  provided that the
           Joint Venture  shall file such matters with the local  Administration
           of Foreign  Exchange  Control for the record within fifteen (15) days
           of borrowing as required by law.

ART. 13.4  Renminbi  shall  generally be used in the  settlement of accounts for
           transactions  between the Joint  Venture  and the  Chinese  entities,
           enterprises or  individuals  unless  otherwise  approved by the local
           Administration   of  Foreign   Exchange  Control  or  where  relevant
           government  regulations  permit  the  Joint  Venture  to use  foreign
           exchange in the settlement of accounts.
<PAGE>
ART. 13.5  The Joint  Venture  will be  entitled  to utilize  all legal means in
           order to obtain the foreign currencies needed such as swap centers or
           all other legal exchange structure.

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                    CHAPTER 14: DURATION OF THE JOINT VENTURE
--------------------------------------------------------------------------------

ART. 14.1  The  duration  of the Joint  Venture  shall be 50 years.  The date of
           establishment  of the Joint  Venture shall be the date of issuance of
           the  business  license.  The  duration  can be prolonged if one Party
           suggests  it  before  six  months of the  expiring  date and if it is
           approved by the board of directors.

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      CHAPTER 15: DISPOSAL OF ASSETS UPON LIQUIDATION OF THE JOINT VENTURE
--------------------------------------------------------------------------------

ART. 15.1  Upon termination of the Joint Ventures,  liquidation shall be carried
           out according to relevant laws and regulations. The liquidated assets
           shall be distributed in proportion to the capital  contribution  made
           by Party A and the Foreign Party.

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                              CHAPTER 16: INSURANCE
--------------------------------------------------------------------------------

ART. 16.1  The Joint Venture shall maintain appropriate  insurance policies with
           an insurance company in P.R. China. The types,  value and duration of
           insurance  shall be decided by the board of directors  in  accordance
           with the standards of the insurance  company in P.R. China. The Joint
           Venture  should  maintain the  insurance for all staff and workers in
           the local labor management department.

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          CHAPTER 17. AMENDMENT, ALTERATION AND TERMINATION OF CONTRACT
--------------------------------------------------------------------------------

ART. 17.1  Any  amendment  to this  contract or its  appendices  shall come into
           force only by  written  agreement  signed by Party A and the  Foreign
           Party  and  approved  by  the  original   examination   and  approval
           authority.

ART. 17.2  Should it become  impossible  to fulfill this contract as a result of
           force  majeure,  or should it become not  possible  to  continue  the
           operations of the Joint Venture as a result of heavy losses sustained
           by the Joint Venture in successive  years, the Joint Venture and this
           contract  may be  terminated  prior  to the  date  of  expiration  if
           unanimously  decided by the board of  directors  and  approved by the
           original examination and approval authority.  The registration of the
           Joint  Venture  must then be  canceled at the  original  registration
           office.  The Joint Venture may be terminated  prior to its expiration
           date in the event that both  Parties  agree that  termination  of the
           Joint Venture is the mutual and the best interest of the Parties.

ART. 17.3  If due to any one Party being  unable to fulfill the  obligations  of
           this contract and the articles of association, and if for that reason
           the Joint  Venture  Company  cannot  continue its normal  business or
           cannot reach its target mentioned in the contract,  then the contract
           would be  deemed  to have  been  stopped  by the  Party  who made the
           violation. The other Party has the right to claim damage and to apply
           for the  termination  of the  contract.  If the other Party agrees to
           continue  the  business,  the  Party  who made the  violation  should
           compensate  the economic  damage.  The other Party would have in that
           case a buying option for the shares owned by the defaulting Party.
<PAGE>
ART. 17.4  In the event that the Joint Venture  intends to merge with or acquire
           another production enterprise or economic organization in the future,
           approval by all the Parties shall be required.

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                 CHAPTER 18: LIABILITIES FOR BREACH OF CONTRACT
--------------------------------------------------------------------------------

ART. 18.1  Should  any of the  Parties  fail  to pay  on  schedule  its  capital
           contributions  subscribed as herefore, it shall, from the first month
           of delay,  pay monthly  interest to the Joint Venture  Company at the
           rate  of 10%  per  annum  and a 0.5%  penalty  to  the  other  Party,
           calculated on the default amount. If more than three months the Party
           still fails to pay its capital contributions, the other Party has the
           right to claim according to the ART 17.3.

ART. 18.2  Should it become  impossible  to fulfill all or part of this contract
           and its annexes due to the fault of either Party,  the Party at fault
           shall bear the responsibilities  for such breach of contract.  Should
           both Parties be at fault, each Party shall bear its  responsibilities
           according to the actual situation.

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                            CHAPTER 19: FORCE MAJEURE
--------------------------------------------------------------------------------

ART. 19.1  Should the  performance  of this  contract  be  directly  affected or
           should it become  impossible  to perform this  contract in accordance
           with the  prescribed  terms as a result of a force majeure event such
           as  earthquake,   typhoon,   flood,   fire,   war,  civil   disorder,
           unforeseeable  events  where the  occurrences  and  consequences  are
           unpreventable and unavoidable without limitation,  the Party affected
           by such event shall  notify the other Party by telegram or  facsimile
           without any delay and, within fifteen (15) days  thereafter,  provide
           the  detailed  information  on such  event and a valid  certification
           document giving reasons for such Party's  inability to perform all or
           part of this contract or its delay of the performance.

ART. 19.2  If possible,  the said  document  shall be issued by a notary  public
           office at the location  where the force  majeure  event  occurs.  The
           Parties shall decide through  consultations whether to terminate this
           contract or to waive part of the  obligations  to be performed  under
           this contract or to delay the performance of this contract  according
           to the effects of the force majeure event on the  performance of this
           contract.

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                           CHAPTER 20: APPLICABLE LAW
--------------------------------------------------------------------------------

ART. 20.1  The  execution,  validity,  interpretation  and  performance  of this
           contract and dispute resolution under this contract shall be governed
           and protected by the laws of the P.R. China.

--------------------------------------------------------------------------------
                         CHAPTER 21: DISPUTE RESOLUTION
--------------------------------------------------------------------------------

ART. 21.1  Any disputes arising from the execution of or in connection with this
           contract  shall  first  be  settled  through  friendly  consultations
           between the Parties.  In the event that no settlement  can be reached
           through  consultations,  the disputes shall be first submitted to the
           China  International  Economic and Trade  Arbitration  Commission for
           conciliation. If no settlement can be reached within six months after
           the  beginning of this  procedure,  the claim will be  submitted  and
           definitely  settled  through  the  rules  and  the  procedure  of the
           International  Chamber of Commerce  (Paris).  The arbitration will be
           held in Paris,  France and the  English  language  will be used.  The
           arbitration fee shall be borne by the losing Party.
<PAGE>
ART. 21.2  When  the  dispute,  controversy  or  claim  arising  out  of  or  in
           connection  with this  contract  are being  resolved  either  through
           friendly consultation or through arbitration, the Parties should take
           the interest of the whole into account and shall not hinder or affect
           the  performance  of the provisions  other than in dispute,  so as to
           guarantee  the smooth  operation  of the Joint  Venture to the extent
           possible.

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                              CHAPTER 22. LANGUAGE
--------------------------------------------------------------------------------

ART. 22.1  The  contract  is written  in  Chinese  and  English  versions,  both
           languages are equally authentic.

--------------------------------------------------------------------------------
             CHAPTER 23: EFFECTIVENESS OF CONTRACT AND MISCELLANEOUS
--------------------------------------------------------------------------------

ART. 23.1  The following annexes formulated in accordance with the principles of
           this contract shall be integral part of this contract:
           Annex 1: existing fixed assets
           Annex 2: rent agreement
           Annex 3: performance guarantee
           In the event of any discrepancy between this contract and the annexes
           hereto, the provisions of this contract shall prevail.

ART. 23.2  This contract and its annexes shall become effective upon approval by
           the original examination and approval authority.  The same applies in
           event of amendment.

ART.  23.3 This  contract  together  with  its  annexes  constitute  the  entire
           agreement of the Parties with respect of the subject  matters  hereof
           and shall  supersede  all prior  agreements  between the Parties with
           respect to the matters hereof.

ART.  23.4 The Parties  shall take all such efforts to carry out the purposes of
           this  contract and its annexes.  Neither  Party shall take any action
           that might have an adverse  competitive effect of adverse consequence
           on the operation of the Joint Venture.

ART.  23.5 Any  waiver  by  either  Party at any time of a breach of any term or
           provision of this contract  shall not be construed as a waiver b such
           a  Party  of any  subsequent  breach,  its  rights  to  such  term or
           provision, or any of its other rights hereunder.

ART.  23.6 If any one or more of the  provisions  contained in this  contract or
           the annexes hereto shall be invalid,  illegal or unenforceable in any
           respect  under  any  applicable   law,  the  validity   legality  and
           enforceability of the remaining provision contained herein or therein
           shall not in any way be affected or impaired.

ART.  23.7 Unless   otherwise   specifically   provided,    notices   or   other
           communications to either Party required or permitted  hereunder shall
           be: (a) personally  delivered;  (b)  transmitted  by postage  prepaid
           registered airmail or by international courier; or (c) transmitted by
           telex or facsimile with answerback or followed by registered  airmail
           or air courier.  The addresses of the Parties listed in this contract
           shall be their  respective  mailing  addresses  and their  respective
           facsimile numbers.
<PAGE>
ART.  23.8 In witness  whereof the Parties have signed this contract on November
           11, 1996 in Qidong by their duly authorized  representatives  in four
           originals, each Party receiving one original in each version, Chinese
           and English.



The Chinese Party                                           The Foreign Party



/s/                                                         /s/