Stephen H. Glassley and Judith Glassley, et al. - Page 16

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          cultivation of jojoba plants and could conduct research and                 
          experimentation work relating to the scientific development of a            
          plant strain with fast, hardy growth characteristics and high,              
          stable seed yields, which could be planted, grown, and harvested            
          in a commercially feasible manner.  The R & D Agreement also                
          stated that JDP anticipated that HJI would conduct such research            
          and experimentation work.  In the R & D Agreement, HJI agreed to            
          use its best efforts to carry out the research and development              
          program (R & D Program) described below:                                    
                    2.  Description of Program.  The R & D Program to                 
               be conducted by HJI, on the terms and subject to the                   
               conditions and payments set forth in this Agreement,                   
               shall consist of the following:                                        
                    2.1  Experimental Plantation.  HJI will acquire                   
               the ownership or use of such land, buildings,                          
               machinery, equipment and other property, and will                      
               provide all personnel and materials, necessary to                      
               develop and establish an experimental jojoba plantation                
               (the "plantation").  The plantation shall consist of 60                
               acres and shall be located on a site selected by HJI in                
               the Hyder Valley area of Yuma County, Arizona.  The                    
               site of the plantation may be purchased or leased from                 
               an affiliate of HJI.                                                   
                    2.2  Plant Strain.  HJI will conduct original                     
               research into a particular jojoba plant strain.  It                    
               will then select both propagating seeds and plant                      
               cuttings for planting and cultivation in controlled                    
               areas of the plantation.  The growth characteristics of                
               the plants will be closely observed, and replacement                   
               will be made if and when HJI determines that it is                     
               appropriate to the experimentation process and                         
               economically feasible.                                                 
                    2.3  Cultivation Techniques.  The plantation will                 
               be divided into separate areas, with each area                         
               subjected to various forms of experimental husbandry.                  
               The variations will include research and                               
               experimentation in soil conditions, methods of                         




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