Laidlaw Transportation, Inc. and Subsidiaries - Page 24

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               3.   LESI                                                              
               GSX changed its name to LESI.  LESI became an indirect                 
          subsidiary of LWSI in October 1986.  LESI was the holding company           
          for the hazardous waste services operating subsidiaries of the              
          LII group.                                                                  
               On April 11, 1989, LESI and International Technologies                 
          Corp., an unrelated U.S. corporation, formed LESCAL.  LESI owned            
          70 percent of LESCAL and International Technologies Corp. owned             
          30 percent.  On March 31, 1993, LESI bought International                   
          Technologies Corp.'s stock in LESCAL.                                       
          F.   LTI's Centralized Cash Management Program (CCMP)                       
               Before 1987, LTI had a program with its subsidiaries to                
          manage cash called the CCMP.  The CCMP had the following                    
          accounts.  LTI had an account called a master concentration                 
          account or first tier account.  Transit, Tree, and LWSI, LTI's              
          subsidiaries one level below LTI, had second tier concentration             
          accounts.  Regions of Transit, Tree, and LWSI had third tier                
          concentration accounts.  Operating companies in those regions had           
          fourth tier concentration accounts.                                         
               The CCMP accounts operated as follows.  At the end of each             
          day, each operating company netted the cash it received against             
          the cash it disbursed.  The operating company netted the cash in            
          a general account.  The operating company then transferred any              
          extra cash in the general account to the appropriate third tier             
          account.  If there was a cash shortage in the operating company's           

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