Thomas H. Scott and Lynn D. Scott, Transferees - Page 8

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          that he had retained Mr. Hrynik for assistance on tax and ac-               
          counting matters relating to the MSSTA transaction.  Mr. Bosworth           
          informed Mr. Harrison, Mr. Hall, and AST's attorney, as well as             
          Mr. Scott, but not Ms. Scott, that he was not representing MSSTA            
          and the Scotts with respect to any tax matters.                             
               Around the end of August 1989, Mr. Scott asked Mr. Hall what           
          the tax consequences would be to MSSTA and the Scotts under the             
          tentative agreements that had been reached regarding the MSSTA              
          transaction.  Mr. Hall responded that (1) MSSTA's tax liability             
          would be approximately $100,000 if it reported the $600,000 that            
          AST had tentatively agreed to transfer directly to it as the                
          amount realized from the sale of its assets; (2) there would be             
          no tax consequence to MSSTA as a result of AST's payment directly           
          to Mr. Carter of $200,000 of the total $800,000 that AST was                
          willing to pay for MSSTA's assets; and (3) based on the tax law             
          relating to capital gains, the Scotts would owe tax on the capi-            
          tal gains that they would realize when MSSTA made liquidating               
          distributions to them as 48-percent stockholders of MSSTA of                
          approximately $300,000, which tax would be equal to about one-              
          third of such gains.  Because of that capital gains tax that the            
          Scotts would owe, they would not have sufficient cash from the              
          MSSTA transaction to purchase the entire 33-percent stock inter-            
          est in AST which they wanted to acquire and to which Mr.                    
          Harrison, Mr. Hall, and AST had tentatively agreed, and they                





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