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Utah I's execution of the license agreement described in
paragraph 10.a of the R&D agreement. This license agreement was
executed by Kellen on December 31, 1982, concurrently with
Kellen's execution of the R&D agreement. Kellen testified at
trial that he did not read the private placement memorandum for
Utah I, which included the R&D agreement and the license
agreement, before signing them on December 31, 1982, and that
after signing the documents he gave "No thought to the license
agreement whatsoever."
By 1986, U.S. Agri had not been successful in developing a
method to "harden off" the jojoba plants cultured in the
laboratory and grown in a greenhouse test tube. According to
Pace, the process of hardening off jojoba plants refers to the
technique of taking a jojoba plant grown in a greenhouse test
tube and successfully planting it in the ground. As a result, a
high percentage of the cultured jojoba plants died after they
were planted in the ground. In 1987, when Pace decided to close
U.S. Agri's laboratory and greenhouse and stop all research
activity, U.S. Agri was still experiencing a 90-percent failure
rate for the cultured jojoba plants transferred to the field.
Soon after, in late 1987, U.S. Agri integrated the 80 acres
allocated to Utah I with the rest of its commercial jojoba
farming operation.
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Last modified: May 25, 2011