-410-
research were sufficiently successful to require the payment of
royalties, then Newport likely would exercise its call option
allowing it to buy the IRC stock and, (b) if the research were
not sufficiently successful to require the payment of royalties,
then IRC’s shareholders would be motivated to put their IRC
shares to Newport in return for Newport common stock; (3) after
its initial capital was expended, IRC had no further capital to
conduct or finance further research, and the existence of the put
and call agreements gave IRC’s shareholders no incentive to
contribute additional capital to IRC; and (4) some of IRC’s
shareholders apparently had always wanted to acquire Newport
stock, and structuring such an investment as a research and
development activity would allow the investors a deduction for
their investment.
Although the record in these cases includes Kanter’s
testimony, testimony which was not allowed in the Estate of Cook
case, the Court finds Kanter’s testimony unconvincing. Kanter’s
testimony was in the nature of advocacy as opposed to a
presentation of substantive evidence that would show that the
conclusions of the Court in Estate of Cook were in error, or that
essential and relevant facts had not been presented to the Court
in Estate of Cook. Essentially, Kanter misunderstood this
Court’s reasoning in Estate of Cook. Kanter argued that the
Court in Estate of Cook incorrectly assumed that IRC held no
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