Cactus Wren Jojoba, Ltd., Cecil R. Almand, Tax Matters Partner - Page 35

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            reported on the status of the maturing jojoba plants, were                                   
            nothing more than the actions of interested investors keeping up                             
            with their investment.                                                                       
                  Although the license agreements entered into by Yuma Mesa                              
            and Cactus Wren nominally had different parties as licensees, the                            
            licensees were controlled by the same four individuals. Yuma                                 
            Mesa's licensee, Mesa, was controlled by HTP's shareholders                                  
            Almand, Peterson, Damer, and Meinke.  Cactus Wren's licensee,                                
            MBP, was also owned in equal shares by Almand, Peterson, Damer,                              
            and Meinke.                                                                                  
                  AI entered into a management agreement on December 31, 1982,                           
            with Mesa to be the farm manager for plantation I.  On December                              
            31, 1983, AI entered into a substantively identical management                               
            agreement with Mesa to be the farm manager for plantation II.                                
            Pursuant to these contracts the manager agreed:  (1) To develop                              
            and plant the property as a jojoba plantation; and (2) to manage,                            
            operate, and maintain the property as a jojoba plantation and to                             
            engage in research with respect to jojoba cultivation.                                       
                  Included in the management agreement with Yuma Mesa for                                
            plantation I is a budget for the initial year that allocates                                 
            $198,600 to development costs such as "clearing, demolition and                              
            spraying * * * grade fields * * * ripping * * * discing * * *                                
            seed jojoba * * * jojoba seed," among other things.  Based upon                              
            this management contract, we conclude that AI performed all of                               
            the physical work upon plantation I.                                                         




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