Office of the President
                                                May 4, 1993



                                                FC/ 110  



Members, Board of Trustees:


               COLDSTREAM RESEARCH CAMPUS GROUND LEASE

Recommendation: that the President be authorized to execute a Ground
Lease between the University of Kentucky and Kentucky Technology, Inc.
for lot 17 of the Coldstream Research Campus for the purpose of
developing the Kentucky Technology Center, a multi-building,
multi-tenant complex.

Background: The Board of Trustees authorized the University of
Kentucky Research Foundation in June of 1988 to establish Kentucky
Technology, Inc. (KTI) as a for-profit corporation. KTI is a wholly
owned subsidiary of the University of Kentucky Research Foundation
organized to transact any lawful business for which corporations may
be incorporated to include, but not limited to, investing in and
operating business and real estate, developing and marketing research
discoveries, and pursuing other economic development initiatives based
on university developed technology.

     KTI will sub-lease to developers who will construct and operate
buildings which will be available for lease to acceptable Coldstream
tenants who do not have need of a single five acre, or larger, lot and
are not interested in owning a building at the current stage of their
business development. KTI may joint venture the building construction
and operation with capable developers. The first building in the
Kentucky Technology Center will be a joint venture between KTI and a
developer and will be occupied by Process Technology, Inc. (PTI). PTI
is a coal related research and development corporation currently
located in Calumet, MI. PTI has an exclusive worldwide license for
the KEN-FLOTE column flotation technology developed at the UK Center
for Applied Energy Research. PTI intends to move to Coldstream and
lease a building of approximately 10,000 square feet in the first
quarter of 1994.

     The terms of the proposed ground lease to Kentucky Technology,
Inc. will generally be the same as those currently in place for the
Hughes Display Products building. These are summarized as follows:

                       m  TERMS OF GROUND LEASE

PARTIES                              Lessor - University of Kentucky

                                      Lessee - Kentucky Technology, Inc.



TXRX OF GROUND LEASE



75 years