Cascade Designs, Inc. - Page 28




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          technology.  Respondent's expert opined that the 1979 sales                 
          agreement established the value of the patents at $300,000, and             
          that the only difference between the 1979 sales agreement and the           
          1982 agreement was the "addition of the '776 patent and '750                
          application."  Accordingly, respondent's expert concluded that              
          "The valuation of the patent and patent application portfolio at            
          December 31, 1982 would, therefore, have differed from the                  
          $300,000 valuation under the 1979 Agreement only by the passage             
          of time", and that the value of the patents and patent                      
          applications transferred in the 1982 agreement was between                  
          $300,000 and $2 million.                                                    
               We do not find respondent's expert witness' rebuttal                   
          persuasive.  Respondent's expert relied heavily on a 1983                   
          appraisal of Cascade's stock value to determine the value of the            
          patents.  This appraisal was commissioned by Cascade and                    
          performed by Management Advisory Services.  The appraisal valued            
          Cascade's stock at $2,450,000, including a control premium.                 
          Respondent's expert, therefore, concluded the maximum value of              
          the patents and patent applications sold by Lea to Cascade is $2            
          million; the value "established for the entire company, including           
          all of its technology, patents and applications", less the                  
          control premium.  Respondent's expert did not consider that the             
          appraised value of the stock was based in part on Cascade's                 
          estimated net earnings:  its earnings minus the patent payments.            






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