Thomas H. Scott and Lynn D. Scott, Transferees - Page 3

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          14, 1989, James R. Carter (Mr. Carter) owned 52 percent, and each           
          of the Scotts owned 24 percent, of the stock of MSSTA, and Mr.              
          Carter and Mr. Scott were directors and officers of that company,           
          Mr. Scott having served as its president.  At all relevant times            
          prior to September 14, 1989, Mr. Carter's son, Rock Carter, also            
          was a director of MSSTA.                                                    
               At all relevant times, MSSTA was in the business of acting             
          as a securities transfer agent (securities transfer agent busi-             
          ness), principally for corporations whose stock was traded on the           
          over-the-counter market in Denver, Colorado.  MSSTA's primary               
          competitor during the mid-to-late 1980's was American Securities            
          Transfer, Inc. (AST).3  Throughout that period, AST was wholly              
          owned by Charles R. Harrison (Mr. Harrison), its president who              
          was in charge of operational and marketing matters, and Bruce E.            
          Hall (Mr. Hall), its treasurer and secretary who was in charge of           
          financial, accounting, and tax matters.  At all relevant times,             
          Mr. Hall, a certified public accountant (C.P.A.), also engaged in           
          a small individual tax practice.                                            
               Prior to 1989, MSSTA's business had been very profitable.              
          Based on his assessment of the securities transfer agent in-                
          dustry, Mr. Scott determined around early 1989 that the level of            
          profits which MSSTA had enjoyed over the prior several years                

          3  Sometime during 1996, AST's name was changed to American                 
          Securities Transfer and Trust, Inc.                                         

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