Contract

                                  Contract


                         Sino-American Joint Venture

             Hangzhou American Flavors Dairy Products Co., Ltd.



                                  Signed by


                           Hangzhou Dairy Complex


                                     and

                        American Flavors China, Inc.

                                  Contents

1.    General Provisions

2.    Parties of the Joint-Venture

3.    Establishment of the JV Company

4.    Purpose, Scope, Scale of Production and Business

5.    Total Investment and Registered Capital

6.    Responsibilities of Each Party to the JV

7.    Board of Directors

8.    Purchase and Inspection of Equipment

9.    Labour Management

10.   Taxes, Finance, Audit and Foreign Exchange

11.   Duration

12.   Disposal of Assets Upon the Expiration of Duration

13.   Insurance

14.   Amendment alternation and Termination of the Contract

15.   Liabilities for Breach of Contract

16.   Force Majeure

17.   Applicable Law

18.   Settlement of Disputes

19.   Language

20.   Effectiveness of the Contract and Miscellaneous

                                  CHAPTER 1

                             GENERAL PROVISIONS

      In accordance with the "Law of People's Republic of China on Joint 
Ventures Using Chinese and Foreign Investment" and other relevant laws, 
decrees, and rules and regulations of the People's Republic of China 
(hereinafter referred to as the "PRC"), adhering to the principles of 
equality and mutual benefit, and through friendly negotiation; Hangzhou 
Dairy Complex and American Flavors china, Inc. agree to invest jointly in 
the setting up of a joint venture company in Hangzhou city, Zhojiang 
province, PRC; and the contract is hereunder stipulated.

                                  CHAPTER 2

                        PARTIES OF THE JOINT-VENTURE

                                  Article 1

      Parties to the contract are as follows:

      Party A: Hangzhou Dairy Complex [Chinese characters] registered with 
Hangzhou Municipal Industrial and Commercial Administration Bureau, Zhejiang 
province, PRC.
      Registered address: No 000 Xxxxx Xxxxxx Xxxx, Hangzhou
      Post Code: 310004
      Legal representative: Mr. Qim Genhua
      Nationality: Chinese

      Party B: American Flavors China, Inc. registered with the State of 
Delaware, U.S.A.
      Registered address: No 000 Xxxxxxxxxxxx Xxxxxx, Xxxxxx, 
      Xxxxxxxxxxxxx 00000 X.X.X.
      Legal Representative: Xx. Xxxxxxxx X. Sender
      Position: Chairman
      Nationality: American

                                  CHAPTER 3

                 ESTABLISHMENT OF THE JOINT-VENTURE COMPANY

                                  Article 2

      In accordance with the "Law of the People's Republic of China on Joint 
Ventures Using Chinese and Foreign Investment" and other relevant laws, 
decrees and rules and regulations of the PRC, Party A and Party B hereby 
agree to set up an equity joint venture Hangzhou American Flavors Dairy 
Products Co., Ltd. (hereinafter referred to as the "JV") in Hangzhou, PRC.

                                  Article 3

      The name of the JV in Chinese is:
      [Chinese characters]
      The name of the JV in English is:
      Hangzhou American Flavors Dairy Products Co., Ltd.
      Registered address of the JV is: Xx 000 Xxxxx Xxxxxx Xxxx, 
      Xxxxxxxx, XXX
      Post Code: 310004

                                  Article 4

      All activities of the JV shall be governed by the laws, decrees and 
pertinent rules and regulations of PRC.

                                  Article 5

      The organization of the JV is a limited liability company.  Each party 
to this contract is only liable to the JV within the limit of the investment 
subscribed by the party.  The profits, loss and risk of the JV shall be 
shared between Party A and Party B in proportion to their respective 
contribution to the JB's registered capital.

                                  CHAPTER 4

              PURPOSE, SCOPE, SCALE OF PRODUCTION AND BUSINESS

                                  Article 6

      The purpose of Parties A and B in setting up the JV is to substantiate 
the good will of both Parties A and B in strengthening economic cooperation 
and technical exchange; by adopting appropriate and advanced technology and 
management method to produce and sell dairy products, drinks with milk 
content and fruit juices; to improve the products quality, develop new 
products, so as to achieve a high degree of competitiveness in quality and 
price in the domestic market; and to enable both Parties A and B to realize 
a satisfactory economic return.

                                  Article 7

      The scope of production and business of the JV is to produce and sell 
dairy products, drinks with mild content and fruit juices.

                                  Article 8

       The scale of production of the JV is:

       -   ice cream    2,500 mt / year
       -   UHT milk     5,500 mt / year
       -   milk powder  1,200 mt / year

      and shall increase with future development of business and production.

                                  CHAPTER 6

                 TOTAL INVESTMENT AND THE REGISTERED CAPITAL

                                  Article 9

      The total amount of investment of the JV is USD 10,000,000-.

                                 Article 10

      The total investment contributed by party A and party B is USD 
5,100,000- and shall be the registered capital of the JV, of which party A 
shall contribute USD 2,448,000-, accounting for 48% of the registered 
capital; Party B shall contribute USD 2,652, 000-, accounting for 52% of the 
registered capital.

                                 Article 11

      Parties A and B shall contribute the following as their investments.

      Party A: the existing factory building, machinery, management 
facilities and other fixed items valued at USD 2,448,000-, (See Appendix II 
"Agreement on Party A's Contribution to the Joint Venture's Registered 
Capital).

      Party B: USD 2,652,000-, of which USD 42,000- is in cash, the 
remaining USD 2,610,000- shall be contributed in the form of imported 
equipment (See Appendix III, "Agreement on Party B's Contribution to the 
JV's Registered Capital")

                                 Article 12

      The registered capital of the JV shall be contributed by parties A and 
B in accordance with the following schedule.

      (1)  Within three months from the date of the JV's business license is 
issued, party A shall contribute all of its investment to the JV; Party B 
shall remit USD 42,000- cash to the bank account of the JV.

      (2)  From the date of the JV's business licence issued and before the 
end of April, 1994, party B shall deliver the equipment, valued at USD 
2,610,000- at Chinese ports designated by the JV and provide a complete set 
of clean xxxx of lading to the JV.

      The USD 4,900,000- balance between the total amount of investment and 
registered capital of the JV shall be made up in the following ways:

      (1)  USD 3,400,000-, when required by the JV, JV shall obtain loan(s) 
from the bank.

      (2) USD 1,500,000 shall be loaned to the JV by parties A and B 
according to their respective investment proportion.  The detailed schedule, 
amount and currency shall be decided by the Board of Directors of the JV.  

                                 Article 18

      If either party intends to transfer all or part of its investment in 
the JV to a third party, unanimous approval of the Board of Directors and 
approval from the original examination and approval authority shall be 
obtained.

      When one party transfers all or part of its investment, the other 
party shall have a first right of refusal.

      The terms and conditions of such transfer to a third party shall not 
be more favourable than those offered to the other party of the JV.

                                  CHAPTER 8

                  RESPONSIBILITIES OF EACH PARTY TO THE JV

                                 Article 14

      Parties A and B shall be responsible for the following matters 
      respectively:

      Party A:

      1.  application to all relevant authorities in the PRC for approval, 
registration, business licence and other matters concerning the 
establishment of the JV;

      2.  providing its investment in the registered capital in accordance 
with Chapter 5;

      3.  assisting the JV in the design and construction work concerning 
the necessary re-construction of the factory building and auxiliary 
facilities; assisting the JV in ascertaining such basic facilities as water, 
electricity supply, road, steam and waste disposal;

      4.  assisting the JV in recruiting Chinese management personnel, 
technical personnel, workers and other personnel needed;

      5.  In accordance with "Party A supply Agreement" signed between Party 
A and the JV, Party A shall supply the materials and relative services 
needed to the JV;

      6.  handling all other matters entrusted by the JV. 

      Party B

      1.  providing its investment in the registered capital in accordance 
with Chapter 5;

      2.  assisting the JV, when entrusted by the JV, outside the PRC with 
selecting and purchasing machinery and equipment;

      3.  responsible for the installation, modification and trial 
production of the imported equipment and responsible for the expenses of 
related personnel engaged for such purposes; and providing technical 
information and assistance in the technical improvement, and adopting the 
imported equipment to the existing factory building, its equipment and 
auxiliary facilities.

      4.  training the technical personnel and workers for the JV;

      5.  handling the other matters entrusted by the JV.

                                  CHAPTER 7

                             BOARD OF DIRECTORS

                                 Article 15

      A Board of Directors of the JV shall be established and become 
effective on the date on which the JV's business licence is issued.

                                 Article 16

      The Board of Directors (hereinafter referred to as the BOD) shall 
comprise of six (6) directors, of which three (3) shall be appointed by 
Party A and three (3) by Party B.  A director appointed by Party B shall 
serve as the Chairman of the BOD and a director by Party A shall serve as 
the Vice-Chairman.  The appointment of the first BOS's director, Chairman 
and Vice-Chairman is for a term of four (4) years.  Any director may serve 
consecutive terms if appointed by the Party which originally appointed him.

                                 Article 17

      The BOD shall be the highest authority of the JV, and shall decide all 
major issues concerning the company.  Unanimous approval of all directors at 
the BOD's meeting shall be required before any decisions are made concerning 
the following major issues:

      1.  Alteration of the Articles of Association of the JV.
      2.  Termination and dissolution and extension of the duration of the 
          JV.
      3.  Increase and transfer of the JV's registered capital.
      4.  Merger of the JV with other economic organizations.
      5.  Loan or any form of indebtedness and/or purchase of fixed assets 
          exceeding USD 500,000.  The decision thereof shall be signed by 
          all the directors of party A and sent to all the directors of 
          Party B for their signatures and then put into implementation.

      Decisions on the following issues shall be valid when adopted by a 
majority of the total number of directors and shall have the approval of one 
Party's A appointee and one Party B's appointee to the BOD;

      1)  deciding and approving the important reports submitted by the 
General Manager e.g., production plan, annual business report, loans, etc.

      2)  approving annual financial report, budget of receipts and 
expenditures, distribution plan of annual profit.

      3)  adopting major rules and regulations of the JV.

      4)  deciding the timing and location to set up branches of the JV 
inside and outside of China.

      5)  amending rules and regulations of the JV.

      6)  deciding the employment dismissal, responsibilities, welfare and 
term and condisitons of employment.

      7)  deciding the liquidation procedures, principles and members of the 
          liquidation committee after the termination and dissolution of the 
          JV.

      8)  deciding the drawing ratio of the "three funds" and all type of 
          insurance.

      9)  deciding all other major issues deemed necessary to be decided at 
          BOD's meeting.

                                 Article 18

      The JV shall establish management organization responsible for the 
JV's day-to-day management of the JV.

      The JV shall have a General Manager to be appointed by Party A and a 
Deputy General Manager to be appointed by Party B.  Both appointments shall 
be approved by the BOD.  The term of office for the General Manager and 
Deputy General Manager is four (4) years and may serve consecutive term if 
re-appointed.

                                 Article 19

      The responsibility of the General Manager is to carry out the 
decisions of the BOD, organize and conduct the day to day management of the 
JV, the Deputy General Manager shall assist the General Manager in his work.
The management organization shall establish several departments.  The 
department manager shall be responsible for the operation of their 
respective department, handling the matters instructed by the General 
Manager and shall be responsible to them.

                                 Article 20

      In case of graft or serious dereliction of duty on the part of the 
General Manager and the Deputy General Manager, the BOD shall have the power 
to dismiss them at any time deemed necessary.

                                  CHAPTER 8

                    PURCHASE AND INSPECTION OF EQUIPMENTS

                                 Article 21

      Under the same conditions, the equipments, transportation vehicles and 
office articles needed by the JV shall be given priority to be purchased 
inside China.

                                 Article 22

      In the event the JV entrusts Party B to select and purchase equipment 
outside China, a import contract shall be worked out under the relevant 
regulations of the PRC.  Party B shall ensure the equipment to be up to 
date, suitable for use and the price thereof reasonable.  Party B shall 
invite party A to send personnel to participate in the purchase.  The 
expenses thus incurred shall be born by the JV.

                                 Article 23

      The equipment purchased from outside China by the JV shall be subject 
to the inspection of Chinese commodity inspection authority under the 
Commodity Inspection Regulations of PRC.

                                  CHAPTER 9

                              LABOUR MANAGEMENT

                                 Article 24

      Employment, recruitment, dismissal, salary, welfare, labor insurance, 
labor protection, performance bonus and disciplinary actions and other 
matters concerning the staff and workers of the JV shall be handled in 
accordance with the "Regulations of PRC on Labour Management in Joint 
Ventures Using Chinese and Foreign Investment" and other relative 
regulations.

      The BOD shall formulate a plan for labor management, and the JV shall 
constitute and sign Contracts of Employment with the JV's trade union 
collectively or the workers individually to cover the terms and conditions 
of employment, and other labor related issues.
Upon the constituting and signing of the employment contract, it shall be 
filed with the labor management department.

                                 Article 25

      The employment, salary, social insurance, welfare and travel expense 
standard of the high-ranking managerial personnel nominated by Parties A and 
B shll be discussed and decided at BOD's meeting.

                                 CHAPTER 10

                 TAXES, FINANCE, AUDIT AND FOREIGN EXCHANGE

                                 Article 26

      The JV and its staff and workers shall pay taxes in accordance with 
the related Chinese laws and regulations.

                                 Article 27

      Allocations for reserve funds, development funds, welfare funds and 
bonuses for staff and workers shall be set aside in accordance with the "Law 
of the People's Republic of China on Joint Ventures Using Chinese and 
Foreign Investment".  The proportion of allocations shall be decided 
manually by the BOD according to the business situations of the JV.

                                 Article 28

      The fiscal year of the JV shall be from January (1) to December 31 of 
the Gregorian Calendar.

      All vouchers, account books, statistic statement and reports shall be 
written in Chinese and English.

                                 Article 29

      The joint venture's financial and accounting system shall be subject 
to the related Chinese regulations and be filed with the local finance and 
tax authority.

                                 Article 30

      All the JV's expenditure vouchers shall be valid only after being 
signed by the General Manager or his authorized representative.

                                 Article 31

      The JV's financial matters shall be examined and checked by the 
registered Chinese accountant engaged by the JV.  The report thereof shall 
be provided to the BOD and the General Manager.

      If either party considers it necessary that foreign accountant or 
auditor shall be independently appointed to examine the annual financial 
affairs, the JV shall grant its consent.  All the expenses incurred shall be 
born by the engaging party.

                                 Article 32

      Within the first three months of each fiscal year, the General Manager 
shall be responsible for preparing the balance sheet, profit and loss 
statement and profit distribution plan of the previous year an deliver such 
to the BOD for examination and approval.

      Within the last three months of each fiscal year, the General Manager 
shall prepare the forecast of profit distribution plan and forecast of 
various funds allocation plan and submit such to the BOD, for examination.

      The general manager shall prepare monthly and quarterly financial 
reports and present to the BOD.

                                 Article 33

      All the JV's matters relating to foreign exchange shall be handled 
under the "Provisional Regulations on Foreign Exchange Control of PRC" and 
other related regulations.  In the event the JV experiences an imbalance in 
foreign exchange, profit to be distributed to Parties A and B shall be in 
terms of renminbi (RMB).

                                 CHAPTER 11

                                  DURATION

                                 Article 34

      The duration of the JV is twenty (20) years.

      The date of issuance of the JV's business licence is the date when the 
JV is established.

      Upon the unanimous approval from the BOD meeting, the application for 
extension of duration proposed by one party may be, not later than 180 days 
prior to the expiration date, submitted to the examination and approval 
authority.

                                 CHAPTER 12

               DISPOSAL OF ASSETS UPON EXPIRATION OF DURATION

                                 Article 355

      Upon the expiration or early termination of the JV, the JV shall 
proceed with liquidation in accordance with laws.  After liquidation, the 
property of the JV shall be distributed in proportion to each party's 
investment in the registered capital of the JV.

                                 CHAPTER 13

                                  INSURANCE

                                 Article 36

      Insurance policies of the JV on various kinds of risks shall be 
underwritten with the insurance organizations in China.  The types, values, 
duration and terms of insurance shall be discussed and decided by the BOD in 
accordance with relevant regulations of such insurance organizations.

                                 CHAPTER 14

                          AMENDMENT ALTERATION AND
                         TERMINATION OF THE CONTRACT

                                 Article 37

      Any amendment or alteration to this contract, or to any of the 
appendices annexed hereto, shall come into force only after a written 
agreement providing for such amendments or alterations has been duly signed 
by Parties A and B, and approved by the original examination and approval 
authorities.

                                 Article 39

      Should the JV be unable to continue its operations or achieve the 
business stipulated in this contract due to the fact that any one party 
hereto fails to fulfill its lawful obligation to this contract  or the 
Articles of Association, or seriously violates the terms of this contract or 
Articles of Association, then the party concerned shall be deemed to be 
unilaterally terminating this contract, and the other party to this contract 
has the right to claim damages from the party concerned in addition to the 
right to submit to the original examination and approval authorities for 
approval to terminate this contract, if all parties to this contract agree 
to continue to operate the JV under such circumstance, the breach of 
contract party shall be liable for the economic losses thus cuased  to the 
JV.

                                 CHAPTER 15

                     LIABILITIES FOR BREACH OF CONTRACT

                                 Article 40

      If any one of Parties A and B does not make its contributions to the 
registered capital on schedule in accordance with the terms stipulated in 
CHAPTER 5 of this contract, the party which is on breach of contract shall 
pay to the other party who has made its contribution to the registered 
capital on schedule, an amount equal to 1% of its subscribed investment in 
the registered capital, ofr every month starting from the date of such delay 
in making contribution to the registered capital.  If the delay of such 
nature is over a period of three (3) months, the party which abides by the 
contract has the right to proceed with the termination of this contract as 
stipulated in Article 39 and claim damages from the breach of contract 
party, in addition to the right to claim the cumulative penalty in the 
amount of 8% of its subscribed investment in the registered capital.
In the event that either party should delay its contribution due to the 
events stipulated in Article 42, such party shall not be reliable in any 
way.

                                 Article 41

      Due to the fault of any one of the parties to this contract which 
prevents the execution, wholly or partially, of this contract, Articles of 
Association and Appendices, the defaulting party shall be responsible for 
all the liabilities of the breach of contract.  If in the event that both 
parties to this contract are in breach of contract, each party hall be 
responsible for the liabilities incurred by its breachof contract according 
to the actual situation.

                                 CHAPTER 16

                                FORCE MAJEURE

                                 Article 42

      Should either party to this contract be prevented from performing this 
contract or be unable to perform this contract according to its terms and 
conditions by force majeure, such as earthquake, typhoon, flood, fire, war 
and other unforseen events, the happening and consequences of which are 
unpresentable and unavoidable, the affected party should notify the other 
party to the contract by telex without any delay and within 15 days 
thereafter provide the detailed information of the event and valid 
certifying documents evidencing the occurrence of the event of force 
majeure.  Such documents should be issued by a public notary organization 
from where the force majeure occurred, explaining the reason for the 
affected Party's inability to perform or delay in performing, all or part of 
this contract.  Depending on the extent the performing of this contract is 
affected, the parties to this contract shall, through consultation, decide 
whether to terminate this contract, or to exempt the performance of part of 
the obligation to this contract, or postpone the performance of this 
contract.

                                 CHAPTER 17

                               APPLICABLE LAW

                                 Article 43

      The making of this contract, its validity, interpretation and 
execution, and settlement of any disputes concerning this contract shall be 
governed by the laws and regulations of the PRC.

      After the effectiveness of the contract, if and when there should be 
any amendments of the Chinese laws and/or regulations, the parties may 
continue to execute the contract under Article 40of the PRC Law on Foreign-
Related Economic Contract."

                                 CHAPTER 18

                           SETTLEMENT OF DISPUTES

                                 Article 44

      Any disputes arising from the execution of, or in connection with, 
this contract shall be settled through friendly consultation between both 
parties to the contract.  In the event that settlement cannot be reached 
through consultations, the disputes shall be submitted for arbitration.  The 
defending party shall choose to be heard at the Arbitration Institute of 
Stockholm Chamber of Commerce in Sweden or China International Economic and 
Trade Arbitration Commission.  In the event that both parties to this 
contract propose arbitration, the case for arbitration shall be submitted to 
the Arbitration Institute of Stockholm Chamber of Commerce.  The arbitration 
verdict shall be final and binding on all parties to this contract.  The 
arbitration fee shall be borne by the losing party.

                                 Article 45

      During the course of arbitration, this contract shall continue to be 
performed except for the part which the parties to this contract are 
disputing and which is undergoing arbitration.

                                 CHAPTER 19

                                  LANGUAGE

                                 Article 46

      This contract shall be written in Chinese and in English.  Both 
versions carry the same force and effect.

                                 CHAPTER 20

                        EFFECTIVENESS OF THE CONTRACT
                              AND MISCELLANEOUS

                                 Article 47

      The appendices to this contract are stipulated in accordance with the