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independently research the current market for jojoba, its
availability or prices, or cash-flow projections. Neither did
she independently investigate the principals controlling Yuma
Mesa.
According to the private placement memorandum distributed by
the promoters of Yuma Mesa, the partnership was organized “to
engage in research and development and, thereafter, participate
in the marketing of the products of the jojoba plant.” Interests
in the partnership were offered for $12,245 each, payable by cash
of $3,571 and a 4-year promissory note of $8,674 bearing 10-
percent annual interest.
Yuma Mesa was organized as a limited partnership with two
cogeneral partners. The general partners, G. Dennis Sullivan and
William Woodburn, were lawyers; the private placement memorandum
listed no experience of either outside the legal field. Yuma
Mesa was to enter into a “Research and Development Agreement”
with Hilltop Plantations, Inc. (Hilltop), which would in turn
enter into a farming subcontract with its wholly owned
subsidiary, Mesa Plantations, Inc. (Mesa). Hilltop was then to
enter into an “Experimental Agricultural Lease” with Hilltop
Ventures, a general partnership with identical ownership as
Hilltop. This lease was to be assigned to Mesa upon completion
of the research and development. Finally, Hilltop was to enter
into a “Research and Development Management Agreement” with
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Last modified: May 25, 2011