Thomas H. Scott and Lynn D. Scott, Transferees - Page 14

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          Bosworth letter indicated that the purchase price for the assets            
          of MSSTA except the S accounts (MSSTA's non-S account assets) was           
          $300,000.  That letter listed MSSTA's non-S account assets and              
          allocated that $300,000 purchase price among those assets.  The             
          Bosworth letter also stated in pertinent part:                              
                    The foregoing allocation of the [$300,000]                        
               purchase price for the assets will be utilized in                      
               reporting this transaction to any and all taxing                       
               authorities. * * *.                                                    
                    Both in house and outside C.P.A.'s for AST have                   
               assured MSSTA this allocation results in the least                     
               possible taxable event to MSSTA, and that tax liability                
               will not exceed $10,000 in connection with the                         
                    This letter is to request that you review the                     
               allocation [of the $300,000 purchase price], and                       
               contact this firm regarding whether you agree with                     
               AST's representation that the maximum tax liability                    
               faced by MSSTA is $10,000.                                             
                    The closing of this sales transaction is scheduled                
               for Wednesday morning, September 13, 1989.  I would                    
               greatly appreciate it if you could contact Arthur                      
               Bosworth, * * * with respect to your opinion concerning                
               the allocation, as well as your opinion letter relative                
               to the solvency of MSSTA subsequent to the asset sale.                 
               * * *.                                                                 
               Shortly after receiving the Bosworth letter, Mr. Hrynik                
          telephoned Mr. Bosworth and advised him that, based on the re-              
          presentations in the Bosworth letter that the purchase price for            
          MSSTA's non-S account assets was $300,000 and that, in reporting            
          the MSSTA transaction to all tax authorities, MSSTA would reflect           
          that amount as the purchase price for those assets, MSSTA's tax             
          liability would be around $10,000 or less.  Mr. Hrynik did not              

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