**Exhibit99.1**

 

 

**SYSTRAN FINANCIAL SERVICES CORPORATION POST-PETITIONFACTORING AGREEMENT**

 

This Factoring Agreement dated May 1, 2003 (the “Agreement”), isbetween SYSTRAN Financial Services Corporation, a subsidiary of TextronFinancial Corporation (“SYSTRAN”) and its successor or assigns and GaselTransportation Lines, Inc. and GTL Logistics, Inc. (jointly and severally  the “Customer”), whose address is set forthon the last page hereof.

 

 

**1.****                                     ****DEFINITIONS**

(a)   “Bill(s)” means any right to paymentfor services rendered or goods sold by Customer to a Debtor evidenced by awriting which complies with the general requirements of SYSTRAN as those may beset forth in the Customer Information Manual, as described in Paragraph 2.5.

(b)   “Chargeback” the debit of a Bill ora “Special Purchase Bill(s)” to a Customer’s account.

(c)   “CommencementDate” means the date that the Customer first receives funds from SYSTRANpursuant to the terms of the Agreement.

(d)   “CommercialAccount” means any non “Transportation Account”.

(e)          “Debtor”means a person or entity obligated to pay a Bill.

(f)            “Maximum Approved Credit Line” means the amountof credit that is approved for Customer by SYSTRAN inclusive of deposit andadvances against purchases of Bills that Customer’s total account is not toexceed.

(g)         “Maximum Debtor Credit Limit” means the maximumoutstanding dollar amount and/or percentage concentration of Customer’s unpaidBills open with SYSTRAN owing by an individual Debtor and/or its affiliates atany given time under the term of the Agreement.

(h)   “Minimum Anticipated Volume” meansthe dollar amount of Bills funded by SYSTRAN that Customer presents each monthduring the term of the Factoring Agreement for purchase by SYSTRAN  that meet the Maximum Approved Credit Linecriteria and Maximum Debtor Credit Limit(s) established from time to time atthe sole discretion of Systran in connection with Customer’s account.

(i)   “Obligation” means all indebtedness,liabilities and obligations whatsoever and of whatever nature owed by Customerto SYSTRAN, or any of its affiliates, whether direct or indirect, absolute orcontingent, due or to become due, now existing or hereafter arising and however evidenced or acquired, whether joint or several or joint and several.

(j)   “Recourse” means the right toChargeback a Bill(s) or “Special Purchase Bill(s)” to Customer.

(k)   “Special Purchase Bill(s)” means thepurchase by SYSTRAN of Customer’s outstanding and unpaid Bills that have eitherbeen previously billed by Customer, financed by a lender, or sold and assignedto another company who buys Bills. Special Purchase Bills shall be subject to all provisions of thisAgreement.

(l)   “Transportation Account” means anyDebtor doing business primarily with any aspect of the transportation industrysuch as freight carriers, brokers, forwarders, consolidators, and rail agentswith the exception of steamship companies.

 

**2.             PURCHASEOF BILLS**

2.1           Customeragrees to present on a monthly basis, a Minimum Anticipated Volume of Bills forSYSTRAN to purchase which shall be equal to $1,000,000.00.  SYSTRAN, at its sole discretion, maypurchase such Bills.  Bill(s) and orSpecial Purchase Bill(s) shall herein collectively be referred to as “TheBill(s)”.  Such sales shall be absoluteand unconditional, subject only to Recourse as described herein.  Customer shall submit to SYSTRAN an originaland one (1) copy, along with any document which SYSTRAN deems necessary, ofeach Bill which shall be attached to a schedule form provided by SYSTRAN.  Should any Debtor require any additionaldocumentation as a prerequisite to payment, Customer will also provide suchdocumentation with each Bill. For a Transportation Account, Customer shall alsosubmit one (1) copy of the respective bill of lading. The bill of lading mustbe signed by the Customer, the shipper, and the consignee if the consignee’ssignature is necessary for payment.

2.2           SYSTRANwill settle with the Customer by providing to Customer by U.S. Mail, electronicmail, or via facsimile a settlement statement setting forth The Bill(s) and/orSpecial Bills purchased, the amount paid, and any deductions made for fees,charges or the “Deposit” and deposit funds as follows:**[Customer shall choose one option]**o Mail funds due Customer. oDeliver overnight funds due Customer via Federal Express next day service air. ý Wire transfer funds due Customer into bank accountspecified by Customer on wire authorization form. oDeposit funds due Customer.

2.3           Anypayment to Customer may be reduced by SYSTRAN by any amount due from Customerto SYSTRAN, including but not limited to the security deposit, Chargebacks,fees and costs.

2.4           SYSTRANmay give notice to the Debtors of the assignment of  The Bill(s) by placing a legend on The Bill(s) stating TheBill(s) have been sold and assigned to SYSTRAN and are payable to SYSTRAN at anaddress designated by SYSTRAN.  Customerwill not attempt to direct payment to any place other than to the SYSTRANdesignated address.  Customer agrees topay all costs and expenses incurred by SYSTRAN in giving such notice.  All proceeds of The Bill(s) received byCustomer shall be delivered immediately to SYSTRAN in the identical form ofpayment received by Customer.  In theevent that Customer collects directly from the Debtor, The Bill(s) which havebeen sold to SYSTRAN and Customer does not deliver immediately to SYSTRAN theidentical form of payment received by Customer, Customer shall be in defaulthereunder and will be charged an administrative fee equal to fifteen percent(15%) of the face amount of The Bill(s) collected directly.  Customer agrees that any collection directlyfrom the Debtor by Customer of The Bill(s) which have been sold to SYSTRAN willbe considered a default under the terms of this Agreement.

2.5           SYSTRANhas or will provide to Customer a Customer Information Manual, which is a guideto policy and procedures concerning daily submission of The Bill(s), collectionefforts, and other matters.  TheCustomer Information Manual (the “Manual”) is not part of this Agreement. Theprocedures set forth in the Manual are only guidelines to ensure the efficientoperation of SYSTRAN’s purchase of The Bill(s).  SYSTRAN may change any procedure in the Manual at any time, andmay choose not to follow procedures in the Manual at its discretion.

 

**3.             FEE(S)**

3.1           SERVICEFEE(S).  Customer shall pay a fee of theface amount of all of The Bill(s) purchased by SYSTRAN as reflected on ExhibitA attached hereto (the “Service Fee(s)”). The Service Fee(s) shall be payable upon the purchase of any of The Bill(s)by SYSTRAN, and SYSTRAN may collect Service Fee(s) either from payments owed toCustomer or may bill the Customer periodically.  SYSTRAN may, upon prior notice to Customer, change any fee andsuch change shall be effective upon receipt of the notice to Customer;provided, that SYSTRAN may change the amount of any fee caused by a change inSYSTRAN’s cost of funds without prior notice to Customer, but must notifyCustomer of such change on Customer’s next settlement statement.  A fee change due to a change in cost offunds will be effective upon the date of the change which will be reflected onCustomer’s settlement statement.  If, atany time during the term of this Agreement, there is an event of default by Customerincluding, but not limited to, a Federal Tax Lien filed against and attachingto the property of Customer or any of its principals, and the tax lien issatisfied to allow continued funding pursuant to this Agreement, SYSTRAN shallincrease all of Customer’s Service Fee(s) by no less than one-half of onepercent (0.5%) discount fee on the face of The Bill(s).

3.2           MINIMUMFEE. In the event that Customer fails to sell to SYSTRAN the MinimumAnticipated Volume in any month, Customer shall pay a minimum fee to SYSTRANwhich shall be equal to the amount obtained when the Minimum Anticipated Volumeis multiplied by the current

 

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Service Fees reflected on Exhibit “A” attached hereto and as referencedin section 3.1 above, or as amended by SYSTRAN from time to time as reflectedin Customer’s daily settlement statement (the “Minimum Fee”).  The Minimum Fee owing by Customer pursuantto this paragraph may be deducted from Customer’s funding.  In the event that Customer fails to sell theMinimum Anticipated Volume per month for each of any two consecutive months(the “Low Volume Period”), Customer’s Service fee will be increased at thebeginning of the month immediately following the Low Volume Period at SYSTRAN’sdiscretion. At SYSTRAN’s discretion, the Service Fee will be returned to thelast fee in effect should Customer’s monthly purchase volume exceed the MinimumAnticipated Volume per month for each of two consecutive months.

3.3           ADDITIONALSERVICES and VALUE FEES.  From time totime during the term of this Agreement, Customer may request SYSTRAN to provideadditional services and/or incur additional risk. Such additional servicesand/or additional risk shall include but not be limited to advances to theCustomer by SYSTRAN which are not in conformity with the terms of theAgreement, extension of Customer’s contractual recourse under the Agreement,purchases by SYSTRAN of bills which are outside of the formulas andcalculations defined in the Agreement (hereinafter such services shall becollectively referred to as the “Additional Services”).  Customer shall pay SYSTRAN the cost foradded value for such Additional Services (hereinafter referred to as the “ValueFee (s)”). The Values Fee(s) will be reflected on Customer’s daily settlementstatement.

 

**4.             DEPOSIT**

4.1           Inorder to secure Customer’s Obligations hereunder, Customer shall deliver toSYSTRAN a deposit as stated in the Addendum as a percentage of Customer’s Billsthat are ninety (90) days old or less computed from date of purchase(“Deposit”).

4.2           ADJUSTMENTOF DEPOSIT.  The amount of Customer’sDeposit will be reviewed and, if necessary, adjusted each day.  Increases in the amount of Customer’sDeposit will be withheld by SYSTRAN from payments to Customer. If sufficientBills are not purchased to fund the increase, Customer will pay the amount ofthe increase upon demand.  Decreaseswill be repaid to Customer from Customer’s Deposit amount.

4.3           REPAYMENTOF DEPOSIT. Upon termination of the Agreement, (a) SYSTRAN may increase theDeposit percentage to 100%, in its sole discretion, and (b) all other sums thatmay become due to Customer by SYSTRAN will be included in the Deposit. Anyshortfall in the Deposit shall bear interest at the rate of four percent (4%)per month.

 

**5.             SECURITYINTEREST**

5.1           Thepurchase of The Bill(s) of Customer by SYSTRAN is absolute, subject to theright to Chargeback.  In no event shallthe purchase of Bills hereunder be construed as a loan.  In addition to the outright ownership of TheBill(s) purchased by SYSTRAN, to secure the payment and performance ofCustomer’s Obligations to SYSTRAN, Customer grants SYSTRAN a security interestin, and lien on, any and all now owned or hereafter acquired or created assetsof Customer, including without limitation all Customer’s present and futureBill(s) and Special Purchase Bill(s), accounts, inventory, deposit accounts,chattel paper, contract rights, insurance contracts and proceeds, generalintangibles, choses in action, equipment, instruments,  real estateand fixtures, and documents, and the proceeds of the foregoing, including proceedsin the form of inventory and/or equipment, whether tangible or intangible,wherever located together with any and all cash and non-cash proceeds andproducts and accessions of the forgoing (the “Collateral”).

5.2           FINANCINGSTATEMENTS.  Customer shall not executeor file any financing statement, supplements or amendments thereto, or anyother instruments or security agreement covering the Collateral described abovein favor of anyone other than SYSTRAN. Customer shall execute and deliver to SYSTRAN any financing statements,title documents, supplements hereunder or the priority of such securityinterest. CUSTOMER AUTHORIZES SYSTRAN TO SIGN ITS NAME TO ANY SUCH FINANCINGSTATEMENT AND FILE SAME IN CUSTOMER’S NAME COVERING THE COLLATERAL.  Customer shall pay all costs of filing suchstatements or instruments with appropriate governmental authorities togetherwith the costs of all lien searches. Customer agrees that either a carbon, photocopy, or other reproductionof this Agreement is sufficient as a financing statement under this Agreement.

5.3           SYSTRANmay, in its sole discretion, elect to discharge any security interest, lien orother encumbrance upon any of The Bill(s) for services rendered or goods soldpurchased by SYSTRAN.  Any such paymentsand all expenses incurred in connection therewith shall be treated as aChargeback.  Notwithstanding theforegoing, SYSTRAN shall have no obligation to discharge any such securityinterest, lien or encumbrance.

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**6.             RECOURSE,DISPUTES AND CHARGEBACKS**

6.1           Allof The Bill(s) are purchased by SYSTRAN from Customer with Recourse.  All of The Bill(s) may be Chargedback toCustomer at any time after ninety (90) days for a Commercial Account andsteamship companies, and sixty  (60)days for Transportation Account(s) after the purchase date of The Bill(s) ifnot collected from Debtor within such period or at any time, if SYSTRANdetermines, in its sole discretion, that The Bill(s) is not collectible.  All of The Bill(s) owing by Canadian Debtorsor logistics companies are subject to Chargeback sixty (60) days from the dateof purchase by SYSTRAN. All Special Purchase Bills are subject to Chargebacksixty (60) days from the date of purchase by SYSTRAN.  SYSTRAN shall not deem a disputed Bill or Special Purchase Billuncollectable without allowing Customer a reasonable time to settle the disputenot to exceed fourteen (14) days from notice of dispute.  It is within SYSTRAN’s discretion as to whenThe Bill(s) over such time periods may be Chargedback to Customer.

6.2           SYSTRANreserves the right, however, from time to time and at its absolute discretion,to Chargeback to Customer any of The Bill(s) which do not conform to therepresentations and warranties set forth in the Agreement or are discovered notto conform with the reasonable standards which SYSTRAN may set for TheBill(s).  SYSTRAN shall have acontinuing security interest in any and all of The Bill(s) which areChargedback to the Customer. Chargeback of any of The Bill(s) does notauthorize Customer to collect any outstanding sum owing on The Bill(s) from aDebtor.

6.3           COLLECTIONOF BILLS.  SYSTRAN may, but is notrequired to, commence any action, including legal action, to collect TheBill(s).  All costs of collection,including attorney fees, court fees, and costs of investigation, will becharged to the Customer.  Prior to anyevent of default by a Debtor, SYSTRAN will commence litigation only withCustomer’s authorization.  Subsequent toan event of default, SYSTRAN may file suit as it deems necessary withoutCustomer’s authorization.  In the eventof default, Customer hereby grants authorization to SYSTRAN to settle orcompromise any freight bill dispute, including litigation, with any uncollectedamount being subject to Chargeback, together with all other amounts for whichCustomer is obligated to SYSTRAN.

6.4           CLEARANCEDAYS.  Clearance Days shall mean (i)three (3) business days for checks drawn on banks located within the UnitedStates and for all electronic funds transfers, and (ii) three (3) business daysfor all other payments.  For allpurposes and computations under this Agreement, Clearance Days will be added tothe date on which any payment is received by SYSTRAN.

 

**7.             WARRANTIESAND REPRESENTATIONS**

7.1           Customerwarrants and represents with respect to all of The Bill(s) sold to SYSTRAN that(a) The Bill(s) are genuine and in all respects what they purport to be; (b)Customer has good title to The Bill(s) and The Bill(s) are free and clear ofall encumbrances, liens and prior claims, and that the Customer has the legalright to sell The Bill(s); (c) Customer has no knowledge of any fact which mayimpair the validity of The Bill(s) or make them uncollectible in accordancewith its terms and face amount; (d) for transportation Customers, The Bill(s)were made in accordance with the laws and the regulations of the FederalHighway Administration or other federal regulatory agency, and the appropriatestate regulatory commission or made according to lawful and valid contractswhich Customer has executed; (e) for transportation Customers, The Bill(s) aresupported by lawful, effective and complete bills of lading or other contractof carriage together with bona fide, genuine, valid and signed deliveryreceipts, and Customer will not modify or delete any of the terms of theoriginal Bills or Special Purchase Bills or bill of lading with respect tosame; (f) there are no counterclaims or setoffs or defenses existing in favorof the Debtor, whether arising from the services provided or goods sold whichare the subject of The Bill(s) or otherwise and there

 

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has been no agreement as to the issuance or granting of any discount onThe Bill(s); (g) The Bill(s) are not a duplicate of and do not cover the sameservices provided or goods sold as a Bill or Special Purchase Bill previouslypurchased by SYSTRAN from the Customer or billed directly by the Customer tothe Debtor; (h) Customer does not own, control, or exercise dominion over thebusiness of any Debtor whose Bills or Special Purchase Bills are factored byCustomer to SYSTRAN,  Customer is not asubsidiary of any Debtor and no Debtors control or exercise dominion over thebusiness of Customer; (i) Customer will not under any circumstances or in anymanner whatsoever interfere with any of SYSTRAN’s rights under this Agreementin connection with SYSTRAN’s factoring of The Bill(s); (j) Customer has not andwill not pledge the credit of SYSTRAN to any person or business for any purposewhatsoever; (k) for non-transportation Customers, until the sale by Customer toDebtor of the goods described in The Bill(s), Customer had good title to thegoods sold, the goods were free of all encumbrances, liens and prior claims,and Customer had the legal right to sell the goods.

7.2           Ifthe Customer is a corporation, partnership or limited liability company, it isduly organized, existing, and in good standing under the laws of Ohio.  If Customer represents him or herself to bea sole proprietorship or a partnership, such representation shall be deemed conclusiveand binding upon Customer.  Customer isduly qualified to do business and is in good standing in every other state inwhich such qualification is required. If Customer is a corporation, partnership or limited liability company,execution, delivery and performance hereof are within its corporate or entitypowers, have been duly authorized, and are not in contradiction of law or theterms of its charter, by-laws, partnership agreement, operating agreement orother entity papers, or any indenture, agreement or undertaking to which it isa party or by which it is bound.  Inaddition, the Customer has all licenses and certificates necessary for theoperation of its business and the issuance of The Bill(s).

 

**8.             AUTHORITY**

Customer irrevocably authorizes SYSTRAN or any persondesignated by SYSTRAN to: bill, receive and collect all amounts which may bedue or become due to Customer from Debtors and to use Customer’s name forpurposes of billing and collection of amounts due; delete Customer’s address onall invoices mailed to Debtor and substitute SYSTRAN’s address; receive, openand dispose of all mail addressed to Customer or Customer’s trade name atSYSTRAN’s address; negotiate checks received in payment whether payable toCustomer or to SYSTRAN, endorse the name of Customer or Customer’s trade nameon any checks or other evidences of payment that may come into the possessionof SYSTRAN on The Bill(s) purchased by SYSTRAN and on any invoices or otherdocument relating to any of The Bill(s); in Customer’s name, or otherwise,demand, sue for, collect and get or give releases for any and all monies due orto become due on The Bill(s); compromise, prosecute, or defend any action,claim or proceeding as to The Bill(s) purchased by SYSTRAN; take all stepsnecessary to ensure payment of such amounts due and do any and all things inCustomer’s name necessary and proper to carry out the purpose intended by thisAgreement.

 

**9.             ADDITIONALDOCUMENTS**

The Customer shall execute and deliver all suchadditional and further instruments as may be reasonably requested by SYSTRAN inorder to more completely vest in and assure to SYSTRAN and make available toit, the property and rights herewith or hereafter granted or assigned andtransferred to SYSTRAN as Collateral and to evidence the sale of The Bill(s) toSYSTRAN and to carry into effect the provisions and intent of this Agreement.

 

**10.          LOCATIONOF  BOOKS AND RECORDS, PLACE OF BUSINESS**

Customer’s place of business is the one set forth inthis Agreement and all of its books, accounts, correspondence, papers andrecords pertaining to the services performed or sales of products are locatedthere, and all such books, accounts, correspondence, papers and records will beopened for SYSTRAN’s inspection at all reasonable times.

 

**11.          INDEMNIFICATIONOF SYSTRAN; SALES AND EXCISE TAXES**

Customer will indemnify and hold SYSTRAN harmlessagainst any and all liability, loss or expense, including attorney’s fees andcosts, caused by or arising out of any claims or alleged claims assertedrelating in any manner to The Bill(s) purchased by SYSTRAN hereunder or subjectto SYSTRAN’s security interest, including, but not limited to, claims assertedagainst SYSTRAN pursuant to Chapter 5, Title 11 of the *United States Code*.  In the event any sales or excise taxes areimposed by any state, federal or local authorities with respect to any of TheBill(s) sold and assigned hereunder, where such taxes are required to bewithheld or paid by SYSTRAN, Customer shall also indemnify SYSTRAN and hold itharmless with respect to all such taxes and hereby authorizes SYSTRAN to chargeto Customer’s account any such tax that is paid or withheld by SYSTRAN.  SYSTRAN may charge the Deposit or initiatelegal proceedings to collect any amount due under this paragraph.  This paragraph shall survive and remain effectivefollowing the termination of the Factoring Agreement.

 

**12.          FINANCIALINFORMATION**

So long as Customer factors or has any absolute orcontingent obligation of any kind owing to SYSTRAN, the Customer will provideinformation regarding the business, affairs and financial condition of Customerand its subsidiaries as SYSTRAN may reasonably request, including financialstatements.

 

**13.          BANKRUPTCY**

Customer agrees to notify SYSTRAN of any voluntary orinvoluntary bankruptcy petition filed by or against it or any guarantor withintwenty-four (24) hours of such filing.

 

**14.          REORGANIZATION,ACQUISITIONS, CHANGE OF NAME OR LOCATION**

Customer will not, and will not permit any subsidiaryto merge or consolidate with or into any corporation or other entity, or sell, lease,transfer, or otherwise dispose of all or any substantial part of its assets,whether now owned or hereafter acquired. Customer shall notify SYSTRAN in writing not less than thirty (30) daysprior to (a) any change of its name or use of any trade names; or (b) anychange in the address of the chief executive office and/or chief place ofbusiness of Customer or the location of any records pertaining to The Bill(s).

 

**15.          LITIGATION**

Except as disclosed in writing, Customer representsand warrants to SYSTRAN as follows: There are no suits or proceedings pendingor to the knowledge of Customer, threatened against or affecting Customer orany of its subsidiaries which, if adversely determined, would have a materialadverse effect on the financial condition or business of Customer and itssubsidiaries and there are no proceedings by or before any governmentalcommission, board, bureau, or other administrative agency pending or, to theknowledge of Customer, threatened, against Customer or any of its subsidiaries.  Further, Customer represents and warrantsthere is no claim, loss contingency, or proceeding, whether or not pending,threatened or imminent, against or otherwise affecting Customer that involvesthe possibility of any judgment or liability not fully covered by insurance orthat may result in a material adverse change in the business, properties, orcondition, financial or otherwise, of Customer.

 

**16.          TRADENAMES**

Customer represents and warrants to SYSTRAN that itutilizes no trade names or assumed business names in the conduct of itsbusiness except Gasel Transportation Lines, Inc. and GTL Logistics, Inc. and/orGasel Transportation Lines, Inc. dba Coast Midwest Transport, Inc. and/or GaselTransportation Lines, Inc. dba CMT Transportation Services, Inc.

 

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**17.          TAXES**

Customer represents and warrants to SYSTRAN that: (a)Customer has filed all federal, state, and local tax returns and other reportsit is required to file and has paid or made adequate provision for payment ofall such taxes, assessments, and other governmental charges.

 

**18.          TERMAND TERMINATION**

18.1         ThisAgreement is for a term of twelve (12) full months to begin on the CommencementDate as defined in paragraph 1(c) herein. The term of this Agreement shall renew automatically for consecutivetwelve (12) month terms unless sooner terminated in accordance with the termsof the Agreement.  Customer mayterminate this Agreement effective at the end of any term by giving thirty (30)days prior written notice to SYSTRAN at the address set forth in thisAgreement.  Customer may continue tooffer any of The Bill(s) to SYSTRAN during such thirty (30) day period.  SYSTRAN may terminate this Agreement at anytime and for any reason by notifying Customer in writing of such termination.

18.2         Allof Customer’s representations, warranties, and other provisions of thisAgreement shall survive such termination until SYSTRAN has been paid in fulland Customer has fully performed all of its obligations.  In addition, should any transfer of money orproperty to SYSTRAN hereunder be avoided in a bankruptcy proceeding involvingCustomer, any Debtor of Customer, or otherwise, then Customer’s Obligationshereunder shall be reinstated and/or supplemented to the extent of the avoidedtransfer, whether or not this Agreement has otherwise been terminated.

18.3         Notwithstandingthe foregoing, Customer has the option to terminate this Agreement prior to theend of any term by giving SYSTRAN thirty (30) days prior written notice.  Customer may continue to offer any of TheBill(s) to SYSTRAN during such thirty (30) day period.  Customer shall be deemed to have terminatedthis Agreement prior to the end of any term on the date that Customer shallhave ceased presenting The Bill(s) to SYSTRAN in the normal course for an uninterruptedperiod of thirty (30) days (“Deemed Termination”).  Upon notice of early termination, or the date of a DeemedTermination by Customer, prior to the end of any term, whether or not Customercontinues to offer The Bill(s) to SYSTRAN during the thirty (30) day noticeperiod applicable to Customer, Customer shall be obligated to pay to SYSTRAN,and Customer’s Deposit may be charged, an early termination premium (“EarlyTermination Premium”) in an amount equal to sixty-five hundredths of onepercent (.65%), or the then current Service Fee specified in Section 3.1 or anysubsequent amendment to Section 3.1, whichever fee is greater, times the dollarvolume of The Bill(s) purchased by SYSTRAN during the month in which Customer’sdollar volume of The Bill(s) purchased by SYSTRAN was the greatest multipliedby the number of months remaining in the then current term, or eleven (11)months, whichever is lower.

18.4         Anypartial month remaining in the current term shall constitute a full month forthe purpose of calculating the Early Termination Premium.  In addition, if SYSTRAN buys Bills fromCustomer as part of a Special Purchase Bill, and should Customer terminate thisAgreement within the first four (4) months of the term of this Agreement,Customer’s Deposit shall be charged an Early Termination Premium in the amountof the balance of the Deposit on the termination date.  The termination date shall be thirty (30)days after SYSTRAN’s receipt of the termination notice or on the DeemedTermination date, unless a termination notice specifies a date that is morethan thirty (30) days but less than sixty (60) days after SYSTRAN’s receipt ofthe termination notice.

18.5         IfSYSTRAN terminates this Agreement prior to the end of any term upon any defaultin the performance of Customer under this Agreement, in view of theimpracticality and extreme difficulty in ascertaining actual damages and bymutual agreement of the parties as to the reasonable calculation of SYSTRAN’slost profits as a result thereof, Customer shall be obligated to pay SYSTRANupon the effective date of such termination, and Customer’s Deposit may becharged, a premium in an amount equal to the Early Termination Premium as setforth above. If Customer terminates this Agreement pursuant to the terms thereof,Customer shall immediately remit and pay to SYSTRAN, at the time oftermination, all Obligations due and owing to SYSTRAN and/or its affiliates byCustomer, under this and any other Agreement.

 

**19.          EVENTSOF DEFAULT**

19.1         Thefollowing shall be events of default under the terms of this Agreement:  (a) default by Customer in the performanceof any Obligation to SYSTRAN or any other financial institution or bank; (b)Customer agrees to the appointment of a receiver for its assets, makes generalassignment for the benefit of creditors or declares that it is unable to payits debts as they mature; (c)Customer files a proceeding under any law for therelief of Debtors, including but not limited to, Title 11 of the *United States Code*, referred to as “*The Bankruptcy Code*”, or any similar lawwhich my exist; (d) any involuntary petition under the *Bankruptcy Code* or similar statute hasbeen filed against the Customer and not dismissed within sixty (60) days afterfiling without the entry of an order for relief; (e) the issuance of anattachment, execution, tax assessment or similar process against the Customeror its property which is not released within ten (10) days of its attachment;(f) any change in the conditions, financial or otherwise, of the Customer whichreasonably causes SYSTRAN to deem itself insecure.

19.2         Inaddition to all other remedies provided by law, upon the occurrence of an eventof default, SYSTRAN may immediately, and without notice to the Customer,increase the amount of the Deposit required under Section 4 of this Agreementto one hundred percent (100%) of the outstanding amount of Bills purchased fromthe Customer (“100% Deposit”), and the Customer shall immediately deliver toSYSTRAN funds sufficient to create this 100% Deposit.

19.3         SYSTRANmay, upon default under the Agreement or any of the agreements, collect anyObligation owing to SYSTRAN or any of its affiliates by debiting Customer’saccount, attach any funds owing to Customer by SYSTRAN or its affiliates, andexercise any other remedy available to SYSTRAN under the Agreements or at law.Any deficiency arising under this Agreement shall accrue interest at the annualrate of twelve percent (12%) or the highest amount allowed by law, whichever ishigher, from the date the deficiency is incurred.

 

**20.          EXPENSES**

20.1         Customershall reimburse SYSTRAN for all fees, costs and expenses incurred by SYSTRAN inrelation to this Agreement.  SYSTRANmay, at any time, and without regard to any remedy listed above, demand fromCustomer payment of the outstanding fees, costs and expenses.

20.2         ATTORNEYS’FEES. With respect to any default under this Agreement, Customer shallreimburse SYSTRAN for all costs and expenses incurred by attorneys, includingboth SYSTRAN’s in-house attorneys and outside attorneys’ and paralegals’whether or not a lawsuit or other court action is actually filed in connectionwith the event of default.  In the eventthat a suit, action, arbitration, or other proceeding of any nature, including,without limitation, any proceeding under *TheBankruptcy Code*, any action seeking a declaration of rights or anaction for rescission is instituted to interpret or enforce this Agreement,including, but not limited to such fees and costs associated with trial andappeals, Customer agrees to pay the reasonable attorneys’ fees incurred inconnection with any such proceeding as awarded by the court.

20.3         OTHERPROFESSIONALS AND EXPERTS.  With respectto any event of default under this Agreement, SYSTRAN in its sole discretionmay retain accountants, auditors, appraisers and other experts and the Customeragrees to pay the professional fees, expert fees and all other fees and costsreasonably and actually incurred in connection with the services provided.

20.4         NOLIEN TERMINATION WITHOUT RELEASE. In recognition of SYSTRAN’s right to have its attorneys’ fees and otherexpenses incurred in connection with this Agreement secured by the Collateral,notwithstanding payment in full of all Obligations by Customer, SYSTRAN shallnot be required to record any terminations or satisfactions of any of SYSTRAN’sliens on the Collateral unless and until Customer has executed and delivered toSYSTRAN a general release in a form reasonably satisfactory to SYSTRAN.  **Customerunderstands that this provision constitutes a waiver of its rights under §9-404of the UCC**.

 

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                **20.5        JURYTRIAL WAIVER.  IN RECOGNITION OF THEHIGHER COSTS AND DELAY WHICH MAY RESULT FROM A JURY TRIAL, THE PARTIES WAIVEANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A)ARISING HEREUNDER, OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TOTHE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT HERETO, IN EACHCASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING INCONTRACT OR TORT OR OTHERWISE; AND EACH PARTY FURTHER WAIVES ANY RIGHT TOCONSOLIDATE ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANYOTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED; AND EACHPARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSEOF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTYHERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANYCOURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OFTHEIR RIGHT TO TRIAL BY JURY.**

 

**21.****                              ****JURISDICTIONAND VENUE**

This Agreement shall be deemed to be a contract underthe laws of the State of Oregon and for all purposes shall be governed by andconstrued in accordance with the laws of that state.  Customer irrevocably agrees that any legal action or proceedingbrought by or against Customer with respect to the Agreement shall be broughtin the courts of the State of Oregon or in the U.S. District Court for theDistrict of Oregon.  Customer consentsto the jurisdiction of such courts and that the venue for any such action shallbe the County of Clackamas.  Thisprovision shall not limit the right of SYSTRAN to bring such actions orproceedings against Customer in the court of such other states or jurisdictionswhere Customer may be subject to jurisdiction. Customer expressly authorizes service of process in any such suit oraction on its behalf upon Registered Agent:        See Addendum, at (address)          See Addendum                or uponsuch other agent as SYSTRAN may approve in writing, as its agent for suchpurposes and that service may be deemed complete upon delivery via expeditednational overnight delivery service.

 

**22.          WAIVER, NOTICE**

Thewaiver by SYSTRAN of the breach of any term of this Agreement or of thecompliance therewith shall not be construed as a waiver of any other breach orcompliance.  Notices from either partyto the other shall be given in writing and mailed postage prepaid, registered orcertified mail, or placed in the hands of a national overnight deliveryservice, addressed to the addresses set forth opposite each party’s name below,or at such other address as either party may hereafter advise the other inwriting.

 

**23.          ASSIGNMENT**

Customer may not assign any of its rights orobligations hereunder.  SYSTRAN mayassign or grant a security interest in this Agreement or in any of The Bill(s)purchased by SYSTRAN.  SYSTRAN mayassign any of its rights and remedies with respect to The Bill(s) including theright to notify Debtors to make payment to SYSTRAN’s assignee.

 

**24.****                              ****SEVERABILITY**

Theprovisions of this Agreement are severable and if any of these provisions shallbe held by any court of competent jurisdiction to be unenforceable such holdingshall not affect or impair any other provisions hereof.

 

**25.****                              ****COMPLETEUNDERSTANDING**

ThisAgreement comprises the complete understanding among the parties and may onlybe varied by a writing executed by the parties hereto.  Paragraph headings are for convenience only.

 

**26.          THIRD PARTY CONSULTATION**

Customerhereby agrees and acknowledges that it has had the opportunity to seek out andconsult with legal counsel and/or independent business advisors of its ownchoosing in connection with the negotiation, execution and delivery of thisAgreement.  This Agreement shall beconstrued without regard to any presumption or rule requiring that it beconstrued against the party causing this Agreement, or any part hereof to bedrafted.

 

**27.          NO OFFER/COMMITMENT**

Thepresentation of this Agreement to Customer does not constitute either an offeror commitment to purchase The Bill(s) or to extend credit to Customer.

 

**28.****                              ****JOINTAND SEVERAL LIABILITY**

 

Ifmore than one Customer executes this Agreement, their obligations under thisAgreement are joint and several.

 

**29.****                              ****CREDITINFORMATION**

Customerauthorizes SYSTRAN or any of its affiliates to obtain credit bureau reports,and make other credit inquiries that it determines are necessary.  On Customer’s written request, SYSTRAN willinform Customer whether SYSTRAN has requested a consumer credit report and thename and address of any consumer credit reporting agency that published areport.  Customer acknowledges thatwithout further notice SYSTRAN may use or request additional credit bureaureports to update its information so long as Customer obligations to SYSTRANare outstanding.

 

**29.****                              ****GUARANTORS**

Theparties acknowledge that Michael J. Post and Gasel Driver Training Schools,Inc. have executed Continuing Guaranties or Collateralized Guaranties of theobligations of Customer arising hereunder, and that Systran would not enterinto this Factoring Agreement without said guaranties.

 

SYSTRANFINANCIAL SERVICES CORPORATION

 
| By:    | /s/  Amera Wild  |   |
|--------|------------------|--------|
| Title: | Closing  Manager |   |
| Date:  | 5-1-03           |   |

 

Address: 4949 SW Meadows Drive

Suite 500

Lake Oswego, Oregon 97035

 

----

 
| **Gasel Transportation Lines, Inc.**                                       |                            |   |                                                                       |                |
|----------------------------------------------------------------------------|---------------------------------|--------|----------------------------------------------------------------------------|---------------------|
|                                                                       |                            |   |                                                                       | **WITNESS:**        |   |   |
| By:                                                                        | /s/  M.J. Post                  |   | By:                                                                        | /s/  Gene Thompson  |
| Print  Name:                                                               | Michael  J. Post                |   | Print  Name:                                                               | Gene  Thompson      |
| Title:                                                                     | Pres                            |   | Address:            | P.O.  Box 1199      |
| Date:                                                                      | 4-10-03                         |   |                                                                       | Marietta,  OH 45750 |
|                                                                       |                            |   |                                                                       | Phone:              |   |
| Address:            | Rt.  4 Box 181A                 |   |                                                                       |                |
|                                                                       | Marietta,  OH   45750 |   |                                                                       |                |
|                                                                            |                                 |        |                                                                            |                     |  |  |  |  |  |  |

 

 
| **GTL Logistics, Inc.**                                                                            |                            |   |                                                                                               |               |
|----------------------------------------------------------------------------------------------------|---------------------------------|--------|----------------------------------------------------------------------------------------------------|--------------------|
|                                                                                               |                            |   |                                                                                               | **WITNESS:**       |   |   |
| By:                                                                                                | /s/ M.J. Post                   |   | By:                                                                                                | /s/ Gene Thompson  |
| Print Name:                                                                                        | Michael J. Post                 |   | Print Name:                                                                                        | Gene Thompson      |
| Title:                                                                                             | Pres                            |   | Address:                | P.O. Box 1199      |
| Date:                                                                                              | 4/10/03                         |   |                                                                                               | Marietta, OH 45750 |
|                                                                                               |                            |   |                                                                                               | Phone:             | 740-373-6479 |
| Address:                | Rt. 4 Box 181A                  |   |                                                                                               |               |
|                                                                                               | Marietta,   OH  45750 |   |                                                                                               |               |
|                                                                                                    |                                 |        |                                                                                                    |                    |  |  |  |  |  |  |

 

 

----

 

**EXHIBIT“A”**

**TOFACTORING AGREEMENT DATED May 1, 2003**

 

The terms used in this Exhibit A have the same definitions as thoseused in the Factoring Agreement.  Incase of conflict of definition, the definitions in this Exhibit “A” shallprevail.

 

 

Customershall pay a discount fee of thirteen tenths of one percent (.13%) of the faceamount of all Bills purchased (“Discount Fee”). In addition, Customer shall paya fee at an annual rate equal to prime plus two percent (2%) of all fundsemployed to purchase Bills (“Prime Plus Fee”). Prime is defined as the prime rate as announced by Wells Fargo Bank,N.A. Funds employed shall be calculated by SYSTRAN on a daily basis based uponbills unpaid and outstanding, less the deposit.  The above Discount Fee and Prime Plus Fee may be deducted fromCustomer’s funding for Bills purchased pursuant to the Factoring Agreement orSystran may bill Customer.  A change inthe Prime Plus Fee due to a prime rate change will be effective upon the dateof the change, which will be indicated on the settlement statement.

 

Amanaged account shall also be created for all Bills that Systran is unable topurchase and all Bills which Customer does not want to factor (the “ManagedAccount”).  Customer shall pay one-tenthof one percent (.10%) of the face amount of all Managed Account Bills (“ManagedAccount Fee”).  The deposit on theManaged Account is 100%.

 

Customer shall pay a closing fee (the “ClosingFee”) in the amount of $17,500.00, to be deducted from funds due Customer onthe first day of funding to Customer by SYSTRAN.  Customer shall also pay an annual line fee of $17,500.00 (the “AnnualLine Fee”).  The Annual Line Fee shallbe deducted from Customer’s funding on the anniversary date of the firstfunding date, annually.

 

 
| **Gasel  Transportation Lines, Inc.** |                      |
|---------------------------------------|---------------------------|
|                                  |                      |   |
| By:                                   | /s/  M J Post             |   |
| Title:                                | Pres       |   |
| Date:                                 | 4-10-03    |   |
|                                       |                           |  |  |

 

 
| **GTL  Logistics, Inc.** |                      |
|--------------------------|---------------------------|
|                     |                      |   |
| By:                      | /s/  M J Post             |   |
| Title:                   | Pres       |   |
| Date:                    | 4-10-03    |   |
|                          |                           |  |  |

 

 

 

----

**ADDENDUMTO THE FACTORING AGREEMENT**

 

This Addendum is to the Factoring Agreement (the “Agreement”), datedMay 1, 2003 between Systran Financial Services Corporation (“SYSTRAN”) andGasel Transportation Lines, Inc. and GTL Logistics, Inc. (jointly and severallythe “Customer”).

 

•                  Paragraph 2.1 is hereby amended by adding the following two sentencesto the end of the paragraph:

 

Customer shall submit to SYSTRAN all Bills for whichproof of delivery has not yet been received by the Customer, (the “UnbilledInvoices”) so long as the aggregate total amount of Unbilled Invoices purchaseddoes not exceed the lesser of; (a) two hundred fifty thousand dollars($250,000.00) or; (b) twenty percent (20%) of Customer’s regular Bills/invoicespurchased that are ninety (90) days old or less as computed from the date ofpurchase.  Customer shall have ten (10)days from date of purchase of any Unbilled Invoice to present, on an InvoiceSchedule form provided by SYSTRAN, one (1) copy of every Bill/invoice relatedto any Unbilled Invoices along with proof of delivery for each Bill presented.Customer may submit to SYSTRAN via facsimile or electronic mail copies ofUnbilled Invoices / dispatch sheets.

 

•                  Paragraph 2.4 of the Agreement is herebyamended to include the following:

 

Customer may mail all Bills directly to accountdebtors.  All Bills so directly mailedby Customer must be stamped with SYSTRAN’s notice of assignment attached asExhibit “A.”  Customer will providecopies of all Bills, together with signed copies of the respective proof ofdelivery prior to Systran considering them for purchase.  Nothing in the Addendum shall obligateSYSTRAN to purchase any Bill.

 

•                  Paragraph 4.1 is hereby amended in the following particulars only:

 

In order to secure Customer’s Obligations hereunder,Customer shall deliver to SYSTRAN a deposit equal to thirty  percent (30%) of Customer’s UnbilledInvoices (“Deposit A”) and Customer shall deliver to SYSTRAN a deposit equal toten (10%) of Customer’s regular Bills that are ninety (90) days old or lesscomputed from the date of purchase (“Deposit B”). Deposit A shall be repaid toCustomer upon receipt of the copy of the regular Bill/invoice by SYSTRAN,whether in the form of a photocopy, a facsimile copy or a scanned copy viaElectronic Data Interchange. Both Deposit A and Deposit B shall be collectivelyknown as “Deposit” for the purposes of the remaining sections of thisAgreement.

 

•                  Paragraph 18.1 is hereby amended by adding the following language:

 

Customer may request that SYSTRAN perform thenecessary due diligence in order to consider the Customer as a candidate forconversion to an Asset Based Loan (“ABL”). In the event Customer selects this option and the conversion to ABL isapproved, additional credit underwriting and new loan documentation may berequired by SYSTRAN pursuant to its lending criteria and the Early TerminationPremium will be waived.

 

•                  Paragraph 21 of the Agreement shall be amended to include theRegistered Agents listed below:

 
| Customer:                            | Registered Agent: |
|--------------------------------------|-------------------|
| **Gasel Transportation Lines, Inc**. | Michael J. Post   |

 

 

----

 
|   | PO Box 1199              |
|--------|--------------------------|
|   | Marietta, OH  45750 |

 

 
| **GTL Logistics, Inc.** | Allen M. Blue                       |
|-------------------------|-------------------------------------|
|                    | 5542 Columbus Pike Ste.  D          |
|                    | Lewis Center,  OH   43035 |

 

 

The parties agree thatthe terms of this Addendum shall be incorporated in terms of theAgreement.  All defined terms in theAddendum shall have the same meaning as the defined terms in the Agreement.

 

**SystranFinancial Services Corporation**

 
| By:    | /s/  Amera Wild  |   |
|--------|------------------|--------|
| Title: | Closing  Manager |   |
| Dated: | May  1, 2003     |   |

 

 
| **Gasel  Transportation Lines, Inc.** |             | **GTL  Logistics, Inc.** |
|---------------------------------------|------------------|--------------------------|
|                                  |             |                     |   |   |
| By:                                   | /s/  M J Post    |                     | By: | /s/  M J Post |   |
| Print  Name:                          | Michael  J. Post |                     | Print  Name: |  Michael J. Post |   |
| Title:                                | President        |                     | Title: | President |   |
| Dated:                                | 4-10-03          |                     | Dated: | 4-10-03 |   |
|                                  |             |                     |   |   |
|                                       |                  |                          |  |  |  |  |

 

 

**Exhibit “A” to the Addendum**

 

Remit Only To:

Systran Financial Services Corp.

P.O. Box 640296

Pittsburgh, PA 15264-0296

This account is sold, assigned and payable to SYSTRAN.

 

 

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