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actually grow into superior plants that then could be sold to
other growers. However, none of the work done in the laboratory
or greenhouse was specifically designated for Utah I. U.S. Agri
did not allocate any of its losses from its laboratory and
greenhouse operations to Utah I.
U.S. Agri's failure to develop a successful technique for
hardening off the jojoba plants cultured in the laboratory and
passage of the Tax Reform Act of 1986 forced Pace to close U.S.
Agri's laboratory and greenhouse in October or November 1987.
As a result, the 400 acres of land that U.S. Agri allegedly had
allocated to research and development, including the land
allocated to Utah I, was added to the 906 acres that U.S. Agri
already was operating as a commercial jojoba farming operation.
By 1991, U.S. Agri serviced 37 different limited
partnerships that eventually merged into Jojoba Plantation Ltd.
Twelve of these limited partnerships were being serviced pursuant
to agreements similar to the agreement between Utah I and U.S.
Agri.
c. The Research and Development Agreement
U.S. Agri executed an exclusive R&D agreement with Utah I on
December 31, 1982, for the stated purpose of "conducting research
and experimentation on the jojoba plant and developing the
technology resulting in the commercial cultivation of the jojoba
plant." No other bids were considered for the role of prime
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