Transport Labor Contract/Leasing, Inc. & Subsidiaries - Page 35

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          due by wire transfer or direct deposit into an account of TLC.              
          TLC did not maintain separate accounts for the funds received               
          from each trucking company client.                                          
               In order to minimize TLC’s loss in the event a trucking                
          company client did not pay to it the payroll period net lease fee           
          due, each exclusive lease agreement required each trucking                  
          company client to make a deposit with TLC equal to $650 per truck           
          ($650 deposit).  TLC intended the $650 deposit to approximate               
          TLC’s payroll obligation for one week for each driver-employee              
          whom it leased to a trucking company client.  The $650 deposit              
          that each trucking company client paid to TLC did not ensure that           
          TLC had sufficient funds to pay TLC’s payroll obligation with               
          respect to each driver-employee whom it leased to such trucking             
          company client where (1) such trucking company client selected a            
          payroll period that covered more than one week and/or (2) such              
          driver-employee was entitled to a batch report lump sum amount              
          that was greater than $650 per payroll period.                              
               For the calendar years 1993, 1994, 1995, and 1996, TLC sent            
          a form letter (per diem letter) to each trucking company client,            
          which set forth the total of all per diem amounts that TLC paid             
          to the driver-employees whom it leased to such trucking company             
          client during the preceding calendar year.  The per diem letter             
          for calendar year 1993 (sent to each trucking company client                
          early in calender year 1994) stated in pertinent part:                      






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Last modified: May 25, 2011