Utah Jojoba I Research, William G. Kellen, Tax Matters Partner - Page 20

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          Agri did not develop any proprietary technology with respect to              
          or for Utah I.  U.S. Agri did present four pages of an incomplete            
          patent application that had been prepared with respect to a                  
          tissue culture process.   However, this application was never                
          filed or completed, nor did it concern Utah I.                               
               d.  The License Agreement                                               
               Concurrently with the execution of the R&D agreement between            
          Utah I and U.S. Agri, on December 31, 1982, Kellen, on behalf of             
          Utah I, executed an exclusive license agreement with U.S. Agri.              
          The license agreement granted U.S. Agri for 40 years "the                    
          exclusive right to utilize the technology developed for the                  
          account of the Licensor * * * [Utah I]," in exchange for which "a            
          royalty shall be paid by Licensee * * * [U.S. Agri] to Licensor *            
          * * [Utah I]."  The amount of the royalty "shall be eighty-five              
          percent (85%) of all products produced on the Plantation and                 
          intended to be sold or moved from the Plantation by the Licensee             
          * * * [U.S. Agri]."                                                          
               e.  The Amended Research and Development Agreement                      
               On February 4, 1983, Kellen on behalf of Utah I, and Pace on            
          behalf of U.S. Agri, executed an addendum to the original R&D                
          agreement that set forth a "Research Plan" regarding the 80-acre             
          plantation allocated to Utah I.  The stated objectives of the                
          amended research plan were:                                                  
               (1) to develop cultural information on how to manage                    
               Jojoba plantations in semi-arid regions of Southern                     




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