Consolidated Manufacturing, Inc., M. P. Long Living Trust, Merl Philip Long, Trustee, Tax Matters Person - Page 17

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          the customer core purchase offer amount on which it was based,              
          the core credit amount generally was equal to the core amount and           
          was based on market-related factors, including the supply and               
          demand of customer cores, although, as discussed above, the                 
          customer core purchase offer amount and therefore the core credit           
          amount could have been in an amount less than the core amount               
          because of the condition of the customer core upon its delivery             
          to Consolidated.  The core credit amount for each customer core             
          was set at an amount that the marketplace in which Consolidated             
          acquired customer cores demanded.                                           
               Consolidated's customers did not guarantee the cores that              
          they decided to provide to it.  However, Consolidated's                     
          requirements for acceptance of a customer core had to be                    
          satisfied before Consolidated was willing to accept a customer              
          core.  Those requirements were:  (1) The customer desiring to               
          deliver the customer core had purchased a remanufactured                    
          automobile part from Consolidated; (2) the remanufactured                   
          automobile part sales price charged for that part included a core           
          amount; (3) the customer core satisfied Consolidated's customer             
          core policy (Consolidated's customer core policy) relating to,              
          inter alia, the type and condition of the core that Consolidated            
          was willing to accept (e.g., Consolidated's customer core policy            
          for Four Star label cylinder head cores stated that those cores             
          were not acceptable if they were "obviously broken, cracked, or             
          welded"); and (4) the customer followed Consolidated's procedures           




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