Thomas H. Scott and Lynn D. Scott, Transferees - Page 10

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          $300,000 that it received directly from AST as the amount re-               
          alized from the sale of MSSTA's assets, and (2) the Scotts would            
          not report any income because there would be no liquidating dis-            
          tributions to them by MSSTA.  Mr. Hall further advised Mr. Scott            
          that, provided that the foregoing return positions were accepted            
          by the Internal Revenue Service (Service), (1) MSSTA's tax lia-             
          bility would be approximately $10,000, and (2) the Scotts would             
          not owe any tax.  Mr. Hall cautioned Mr. Scott that the Service             
          could decide not to accept those return positions of MSSTA and              
          the Scotts because the Scotts would be paying only a nominal cash           
          amount for a 21-percent stock interest in AST and would not be              
          reporting any income attributable to liquidating distributions by           
          MSSTA to them.  Nonetheless, Mr. Scott, acting on behalf of                 
          MSSTA, Ms. Scott, Mr. Carter, and himself, and Mr. Harrison and             
          Mr. Hall, acting on behalf of AST and themselves, decided to take           
          that tax risk and agreed, inter alia, on the following form of              
          the MSSTA transaction:  AST would transfer only $300,000 directly           
          to MSSTA for its assets; Mr. Carter would receive that amount               
          from MSSTA in redemption of his MSSTA stock; and the Scotts would           
          pay AST only a nominal cash amount to acquire a 21-percent stock            
          interest in that company.                                                   
               Sometime after Mr. LaPlante prepared the preliminary drafts            
          of the various documents that would be needed to implement the              
          tentative agreements that had been reached, Mr. Scott contacted             

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