Investment Engineers, LTD., Robert S. McGlamery, A Partner Other than the Tax Matters Partner - Page 5

                                                 - 5 -                                                    
                  benefits) for marketing.  Thus, even should a                                           
                  successful product be delivered to the Partnership, it                                  
                  would take a marketing company [to] make the                                            
                  partnership successful. * * *                                                           
                  On December 31, 1982, a Research Agreement between Knox and                             
            the partnership was executed.  The partnership agreed to pay to                               
            Knox a flat fee $600,500.  Article I of the Research Agreement                                
            specified the scope and definition of work as follows:                                        
                        Knox will carry on research and development work                                  
                  at the order and risk of the Partnership on a research                                  
                  program to develop new and unique computer software in                                  
                  the field of financial planning.  It is understood that                                 
                  this software will cause computers to perform financial                                 
                  planning tasks in contrast with other such software,                                    
                  and/or real doubt exists as to the operational                                          
                  feasibility of developing the software.  The proposed                                   
                  software should perform, at a minimum, the following                                    
                  functions:                                                                              
                        A.  Convert the essential factors of qualitatively                                
                  “unlike” investments, including stocks, real estate,                                    
                  fixed-interest investments (bonds, etc.), gold, foreign                                 
                  currencies, silver, commodities, collectables, etc., to                                 
                  a common “investment language” so that they can be                                      
                  analyzed, compared, and contrasted as though they were                                  
                  qualitatively identical;                                                                
                        B.  Allow the software user to imput [sic] the                                    
                  dissimilar investments, and receive back either the                                     
                  computer’s translation into its own “language”, or an                                   
                  analysis of the dissimilar investments which will allow                                 
                  the user to analyze them as though they were                                            
                  qualitatively similar; being then dissimilar only                                       
                  quantitatively;                                                                         
                        C.  Cross reference, between apparently dissimilar                                
                  investment choices, areas that are actually similar,                                    
                  such as where--                                                                         
                               1.  Two investments are similar because they                               
                        both are “leveraged”, such as real estate and                                     
                        commodities, or                                                                   






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