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(U.S. Agri) as a party to the contract and the R&D contractor
thereunder. The license agreement identified U.S. Agri as a
party to the contract and the licensee thereunder.
E. U.S. Agri and Eugene Pace
As previously indicated, the offering memorandum identified
U.S. Agri as the R&D contractor under the R&D contract and as the
licensee under the license agreement. U.S. Agri was also the R&D
contractor and the licensee for Utah Jojoba, Blythe Jojoba I,
Blythe Jojoba II, and Desert Center Jojoba.
The president of U.S. Agri was Eugene Pace (Mr. Pace), who
was also a member of its board of directors. Mr. Kellen also
served as a member of U.S. Agri’s board until he became general
partner of Utah Jojoba, Blythe Jojoba I, Blythe Jojoba II, and
Desert Center Jojoba in late 1982.
Mr. Pace and Mr. Kellen were close personal friends and
business associates for a number of years before the formation of
San Nicholas in late 1983. In contrast, neither in 1983 nor at
any other time relevant to this case did petitioner ever meet Mr.
Pace.
F. Cautionary Language in the San Nicholas Offering Memorandum
The face of the offering memorandum warned, in block
letters, that “THIS OFFERING INVOLVES A HIGH DEGREE OF RISK”.
The offering memorandum also included the following cautionary
language in block letters:
PROSPECTIVE INVESTORS ARE CAUTIONED NOT TO CONSTRUE
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