Consolidated Manufacturing, Inc., M. P. Long Living Trust, Merl Philip Long, Trustee, Tax Matters Person - Page 15

                                        -15-                                          
          with customer cores, the ratio between sales of a particular type           
          of remanufactured automobile part and acquisitions of the                   
          corresponding type of customer core, and the amounts that core              
          suppliers were charging for certain types of core supplier cores            
          that Consolidated anticipated purchasing in order to satisfy a              
          specific or temporary demand for particular types of automobile             
          parts.                                                                      
               At the time Consolidated sold each remanufactured automobile           
          part to each of its customers, it offered to purchase from each             
          such customer, subject to the requirements established by                   
          Consolidated for its acceptance of a customer core                          
          (Consolidated's requirements for acceptance of a customer core),            
          a customer core of the same type as each such part sold.                    
          Consolidated offered to purchase each such customer core for an             
          amount (customer core purchase offer amount) that generally was             
          equal to the core amount which was separately stated on the                 
          remanufactured automobile part sales invoice as part of the                 
          remanufactured automobile part sales price for each such part.              
          The customer core purchase offer amount was, like the core                  
          amount, based on market-related factors, including supply and               
          demand.  The customer core purchase offer amount could have been            
          less than the core amount shown on the remanufactured automobile            
          part sales invoice.  That could have occurred because of the                
          condition of the customer core upon its delivery to Consolidated.           
          For example, Consolidated's customer core purchase offer amount             




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