<PAGE>
                                                                   Exhibit 10.20
                            GUNNALLEN FINANCIAL, INC.
                        1715 N. WESTSHORE BLVD 7TH FLOOR
                              TAMPA, FLORIDA 33607

July 12, 2002

Mr. Kent Harle
President
Redline Performance Products
2510 Commerce Way
Vista, Ca   92083

VIA TELEFAX 760-598-0167

RE:   Letter of Intent for Private Placement and Initial Public Offering

Dear Mr. Harle:

Discussions have taken place during the past several days between
representatives of GunnAllen Financial, Inc. ("GAF") and Redline Performance
Products, Inc ("Redline" or the "Company"). regarding (i) a bridge financing in
the form of a proposed private placement (the "Private Placement") with a
minimum of $1,250,000 and a maximum of $2,000,000 consisting of units containing
a secured subordinated note (the "Notes") with warrants (the "Warrants") to
purchase common stock (the Notes and Warrants are collectively referred to as
the "Units") and (ii) an initial public offering of Redline common stock on a
firm commitment basis ("IPO") raising a minimum amount of $10,000,000 and a
maximum amount of up to $15,000,000. This letter does not contain all the
matters upon which agreement must be reached in order for the Private Placement
or the IPO to be consummated, but is intended solely as an outline of certain
material provisions.

We are pleased to submit for your approval the following terms and conditions
for the program of financing to be effected upon substantially the following
terms and conditions.
<PAGE>
Letter of Intent between
Redline Performance Products, Inc.
and GunnAllen Financial, Inc.
July 12, 2002

1.    PRIVATE PLACEMENT

      a. Upon our review and approval of Due Diligence materials requested by
      GAF, completed offering documents and subject to the other terms and
      conditions outlined below, GAF will act as the "Dealer Manager" for the
      Private Placement of the Company's Units consisting of Notes with Warrants
      on a "best efforts" basis with a minimum offering of $1,250,000 and a
      maximum offering of $2,000,000. Offers and sales of Units shall be made
      only to "accredited investors" as defined in Regulation D under the
      Securities Act of 1933, and in compliance with the Rule 506 exemption from
      federal registration thereunder.

      b. The Units shall consist of an 8% secured subordinated note with a
      minimum purchase of $25,000 and warrants to purchase 2,500 post-split
      shares of the Company's common stock. The Notes shall be due and payable
      on the earlier of an IPO in an offering of not less than $10,000,000 and
      December 31, 2003. The warrants shall have a term of 5 years with an
      exercise price of $3.75 per post-split share and shall contain a provision
      for cashless exercise and piggyback registration rights.

      c. The Company and the Company's counsel shall prepare a Private Placement
      Memorandum ("PPM") in accordance with the rules and regulations
      established by the Securities and Exchange Commission ("SEC") and all
      other regulatory agencies to be approved by GAF.

      d. GAF will advise the Company of the states in which the Private
      Placement will be conducted and the Company's counsel shall be responsible
      for preparing and making all necessary Blue Sky filings.

      e. Because of the nature of the offering of the proposed Private
      Placement, all funds must be placed in an escrow account until the minimum
      proceeds are received. Both GAF and Redline shall agree on a mutually
      acceptable escrow agent.


                                       2
<PAGE>
Letter of Intent between
Redline Performance Products, Inc.
and GunnAllen Financial, Inc.
July 12, 2002

      f. Redline agrees to pay to GAF a sales commission equal to 11% of gross
      proceeds from the Private Placement.

      g. The Company shall bear all reasonable and documented costs and expenses
      incident to the Private Placement and shall reimburse GAF all costs
      incurred in connection with the Private Placement.

      h. Additional Provisions

            1. Prior to the Private Placement, the Company shall cause a 1-for-3
            reverse stock split to become effective, excluding the warrants to
            be issued in connection with the Private Placement. The Company's
            outstanding pre-split securities (after giving effect to the founder
            retirement) are currently as follows:

<TABLE>
<S>                                 <C>
Common Outstanding                  3,194,250 (after founder retirement)
Preferred Outstanding               3,843,366
Warrants Outstanding                2,078,021
Options Outstanding                   413,000
TOTAL                               9,528,637
</TABLE>

                  After giving effect to the reverse split, a total of 3,176,212
                  fully diluted shares will be outstanding.

            2. Prior to the Private Placement, the Company's founders shall
            provide evidence that a total of 1,100,000 shares of common stock
            shall be retired.

            3. Prior to filing for an IPO, the Company shall obtain the consent
            of all existing Series A Preferred shareholders to automatically
            convert into common stock upon completion of an IPO in an amount of
            at least $10


                                       3
<PAGE>
Letter of Intent between
Redline Performance Products, Inc.
and GunnAllen Financial, Inc.
July 12, 2002

            million, excluding those investors who purchased shares of Series A
            Preferred Stock after March 2002 that decide to convert into the
            Private Placement.

            4. The Company shall provide the Placement Agent weekly accounting
            as to the use of proceeds for the Private Placement.

            5. The Company shall prepare a document reflecting that any investor
            in the Series A Preferred Stock that made investments on or after
            March 20 2002 shall have the right to convert into the Private
            Placement, but only if the minimum number of Units has been sold.

            6. The Company agrees that immediately upon completion of the
            Private Placement it will undertake its best efforts to hire a
            full-time CFO with public company experience. Such person shall be
            subject to the reasonable approval of GAF, which approval shall not
            be unreasonably withheld.

            7. Prior to closing of the Private Placement, the Company shall
            provide to GAF copies of all necessary Board of Director resolutions
            reflecting the adoption of the transactions contemplated herein.

            8. Prior to effectiveness of the IPO, the Company shall provide
            "lock up" agreements as required pursuant to section 5 B below.

            9. Other than the securities offered in the contemplated Private
            Placement or upon exercise or conversion of securities outstanding
            as of the date hereof, the Company agrees that no additional
            securities shall be sold or issued, without GAF's prior written
            consent.


                                       4
<PAGE>
Letter of Intent between
Redline Performance Products, Inc.
and GunnAllen Financial, Inc.
July 12, 2002

            10. The term of warrants issued by the Company to purchasers of
            Series A Preferred Stock who purchased such shares on or after March
            20, 2001 will be extended to July 31, 2004. - Exercise Price $3.75

INITIAL PUBLIC OFFERING

2.    SECURITIES OFFERED

a. Subject to the terms and conditions outlined in this letter, GAF will act as
the Company's underwriter ("Underwriter"), on a firm commitment basis, in
connection with the proposed public offering (the "Offering") by the Company of
common stock (the "Shares") with gross Offering proceeds of a minimum of $10
million and a maximum of up to $15 million with an estimated Company pre-money
valuation of $18 million (provided that the Offering is subject to the
successful completion of the Private Placement). The number of shares, capital
structure of the Company, and the offering price preceding the public offering
shall be reasonably acceptable to the Underwriter and Redline.

b. The Company will grant an over allotment option to the Underwriter,
exercisable within 30 days from the date the Offering is declared effective by
the Securities and Exchange Commission (the "Effective Date"), to purchase up to
an additional 15% of the Shares at the Offering price, less Underwriting
discounts and commissions. The Underwriter may exercise the option in whole or
in part solely for the purpose of covering over allotments, if any, made in
connection with the sale of the Shares. Underwriter will receive commissions and
expenses on the over allotment as described in section 6, below.

c. The Underwriter will agree, subject to the terms and conditions set forth
herein, to purchase the subject Shares from the Company on the Effective Date
and to pay for same in certified funds within three business days thereafter
(the "Closing Date"). The Underwriter will be committed to purchase and pay for
all of the Shares offered if any


                                       5
<PAGE>
Letter of Intent between
Redline Performance Products, Inc.
and GunnAllen Financial, Inc.
July 12, 2002

Shares are purchased. The Shares will be offered by the Underwriter subject to
prior sale and subject to approval of certain legal matters by its counsel.

d. The capital structure of the Company immediately preceding the Offering, the
contemplated dilution to the public investor, and the Company's business plan
shall be an amount to be agreed upon. Shares underlying options and warrants,
other than warrants held by the Underwriter, shall be deemed outstanding for
this purpose. Any new employee (including officers and/or directors) incentive
or compensation plan (including royalty plan), of whatever nature, presently
contemplated to become effective prior to the Offering, shall be fully disclosed
to the Underwriter and subject to the reasonable approval of the Underwriter.

3.    SYNDICATION

      In connection with the proposed Offering, the Underwriter shall have the
right, but not the obligation, to form a syndicate of co-underwriters and/or
selected dealers who will assist us in the Offering. Any firm with whom we
associate will be a member of the National Association of Securities Dealers,
Inc. ("NASD") or a selected foreign broker dealer acceptable to the NASD.

4.    REGISTRATION STATEMENT

a. The Company shall use its best efforts to file, within thirty (30) days of
the sale of the minimum number of Units in the Private Placement, with the
Securities and Exchange Commission ("Commission"), a Registration Statement on
Form SB-2 or S-1 (the "Registration Statement") in conformity with the
Securities Act of 1933, as amended (the "1933 Act"), covering the Offering.


                                       6
<PAGE>
Letter of Intent between
Redline Performance Products, Inc.
and GunnAllen Financial, Inc.
July 12, 2002

b. The Registration Statement shall consist of the information required by
Regulation S-B or to be included on Form S-1 and all other information and
documents which are required by law or which the Company must file as part of
the Registration Statement, including but not limited to, financial statements
audited by the Company's independent certified public accountants. The Company
shall utilize its best efforts to cause the Registration Statement to be
declared effective by the Commission so that the Offering may commence as soon
as practicable; provided, however, effectiveness shall not be allowed to occur
without our prior written consent.

5.    ISSUED AND AUTHORIZED CAPITAL

a. Prior to the Offering, there shall be no more than the number of Shares of
common stock issued and outstanding on an amount to be agreed upon.

b. All outstanding shares of Common Stock, Preferred Stock and shares underlying
all options and warrants currently outstanding (including Common Stock held by
officers, directors and 5% shareholders) is currently or shall be subject to a
lock-up agreement which prohibits sale of the Common Stock without the prior
written consent of the Underwriter until 18 months from the Effective Date of
any IPO in which the GAF is the underwriter.

c. The Company shall warrant to the Underwriter in the Underwriting Agreement
that the Company has sufficient authorized securities to cover the issuance of
the Sharers contemplated hereby as well as make such additional warranties and
representations and indemnification as are customary in a transaction of this
nature.


                                       7
<PAGE>
Letter of Intent between
Redline Performance Products, Inc.
and GunnAllen Financial, Inc.
July 12, 2002

6.    UNDERWRITING COMPENSATION

a. The Underwriting Agreement shall provide that we shall receive an
underwriting discount of 10% of the Offering price of each Share sold by us, and
shall also provide that participating dealers shall be entitled to such
underwriting commission from our discount as established by us.

b. It is understood that the Company shall reimburse the Underwriter for its
expenses on a non accountable basis in the amount equal to 3% of the gross
proceeds of the Offering, of which $30,000 shall be prepaid upon the closing of
the minimum on the Private Placement and the balance on closing of the Offering.
In the event the Offering for any reason is not closed, the Underwriter will
retain so much of the $30,000 received from the Company as is equal to its
actual accountable expenses and reimburse the Company for the remainder, if any.

c. The Company agrees to sell to the Underwriter and its designees, for an
aggregate of $100, warrants (the "Underwriter Warrants") to purchase up to 10%
of the Shares being offered at the offering price. The Underwriter Warrants will
be exercisable during a four-year period commencing one year from the Effective
Date of the Offering and shall contain a provision for "cashless exercise". The
exercise price of the Underwriter Warrants will be equal to 110% of the offering
price.

d. With respect to the Underwriter Warrants, the Underwriter will be entitled to
customary "piggy-back" registration rights and to one "demand" registration
right. Such registration rights will be further described in the Underwriting
Agreement and shall continue for a period of five years from the Effective Date
of the Offering, or until the Underwriter may sell all of the shares underlying
the Underwriter Warrant pursuant to Rule 144(d) or within any three-month period
under Rule 144. Within 10 days after any demand registration is exercised, the
Company shall have the right to redeem the Underwriter Warrants demanding
registration by payment of the difference between the


                                       8
<PAGE>
Letter of Intent between
Redline Performance Products, Inc.
and GunnAllen Financial, Inc.
July 12, 2002

exercise price of the warrants and the average bid price of the Shares over the
10 business days prior to the date of such exercise.

7.    DUE DILIGENCE; DELIVERY OF REPORTS

a. The Company shall supply and deliver for use by Underwriter counsel all
information reasonably required to enable us to make such investigations of the
Company and its business as we and our counsel shall desire. The Company shall
make available to us at our offices such persons as we shall deem reasonably
necessary and appropriate in order to verify or substantiate any such
information supplied. We shall have the right to review all materials prepared
in connection with the Offering within a reasonable time prior to filing with
the Commission.

b. For a period of two years from the Effective Date the Company shall furnish
to us (i) unaudited quarterly financial statements on a timely basis have to be
filed with Commission within 45 days after end of each quarter in addition to
any other reports which are required by the Underwriting Agreement or the
Commission, (ii) monthly shareholder lists prepared by the Company's transfer
agent and (iii) weekly reports prepared by DTC.

8.    BLUE SKY AND OTHER COSTS

      The Company shall bear all costs and expenses incident to the issuance,
offer, sale, and delivery of the Shares, including but not limited to all
expenses and filing fees incident to the registration of the Shares with the
Commission and the NASD; all transfer agent costs; the engraving of the Common
Stock and Warrant certificates; the cost of qualification of the securities
under the various state securities laws ("Blue Sky Laws") covered by the
registration Statement (which states shall be selected by mutual


                                       9
<PAGE>
Letter of Intent between
Redline Performance Products, Inc.
and GunnAllen Financial, Inc.
July 12, 2002

agreement of the Company and us); fees and disbursements of counsel for the
Company; fees and disbursements of the Company's accountant; the cost of
printing and preparing the registration Statement, related exhibits, amendments,
supplements thereto, underwriting documents and selected dealer agreements
expenses of tombstone advertisements (not to exceed $15,000) and such number of
preliminary and final prospectuses and we shall deem reasonably necessary. The
Blue Sky applications and exhibits shall be prepared by counsel selected by the
Underwriter whose legal fees for such Blue Sky work and review and due diligence
of the offering shall be paid by the Company. The Company may be required to pay
the Blue Sky counsel a retainer fee in connection with the Blue Sky
applications.

9.    EXECUTION OF THE UNDERWRITING AGREEMENT

      Upon the Effective Date, we shall enter into an Underwriting Agreement
with the Company, prepared by our counsel, which Underwriting Agreement shall by
its terms become effective as of the Effective Date of the Registration
Statement and shall contain certain terms and conditions usually and customarily
found in instruments of like nature and containing among other things, the usual
"market out" conditions, calamity causes and cross indemnity provisions against
certain liabilities, including liabilities under the 1933 Act.

10.   CONFLICT OF LAWS

      If any provision of this Letter of Intent conflicts with any rule or
regulation under the 1933 Act, or any state securities laws in which the
Offering is to be qualified, the NASD or any other state or federal authority
possessing jurisdiction over the Offering, the Company shall meet with us and
together we shall use our best efforts to revise the terms of the Offering so as
to comply with any such rules or regulations.


                                       10
<PAGE>
Letter of Intent between
Redline Performance Products, Inc.
and GunnAllen Financial, Inc.
July 12, 2002

11.   REPRESENTATIONS OF THE UNDERWRITER

      We are a member of the NASD and registered as a broker dealer with the
Commission. To the best of our knowledge, there are no past or pending material
proceedings involving the NASD, the Commission or any state regulatory authority
which would impair our ability to conduct the Offering as contemplated by this
Letter of Intent.

12.   OTHER PROVISIONS

a. Upon completion of the Offering and for a period of two years from the
Effective Date, if the Company seeks to engage an underwriter or placement agent
for any future public offering intended to raise up to $15 million ("Public
Transaction") or private offering intended to raise up to $3 million ("Private
Transaction") through sales of the Company's securities, we shall have a right
of first refusal with respect to any such Public Transaction or Private
Transaction. The obligations set forth in this paragraph shall terminate upon
the earliest to occur of the following: (i) we fail to exercise our right of
first refusal with respect to any Public Transaction or Private Transaction, or
the date two (2) years from the date hereof.

b. The Company shall apply to have its Shares or Shares included in Standard and
Poor's or Moody's securities manual (if necessary).

c. The Company shall select Common Stock certificates and utilize a stock
transfer agent satisfactory to us.


                                       11
<PAGE>
Letter of Intent between
Redline Performance Products, Inc.
and GunnAllen Financial, Inc.
July 12, 2002

d. The Company shall employ the services of certified public accountants and
legal counsel satisfactory to us in connection with the preparation of the
financial statements and forepart required to be included in the Registration
Statement. The financial statements shall be prepared in accordance with the
requirements of Form SB-2 or S-1 under the 1933 Act.

e. The Company is not now, and will not be on the Effective Date, a party to any
material legal proceedings pending or threatened against the Company or its
property.

f. Concurrent with the filing of the Registration Statement, the Company shall
arrange for its Shares to be listed on the American Stock Exchange ("AMEX") or
Nasdaq SmallCap.

g. Prior to the closing date of the Offering, our obligations hereunder shall be
subject to there being, in our reasonable opinion; (i) no material adverse
change in the conditions or obligations of the Company or its present or
proposed business and affairs; and (ii) no market conditions or any other
factors which in our sole reasonable discretion might render the offer and sale
of the Shares herein contemplated inadvisable.

h. In the event the Company (i) elects to use another underwriter for an initial
public offering or a merger, either of which occurs within six months of the
date of this Agreement, or (ii) decides not to proceed with the Offering, then
in either event the Company shall pay GAF a breakup fee equal to $125,000. No
breakup fee will be payable under this paragraph if this Letter of Intent has
terminated pursuant to Section 13 prior to the occurrence of any of the events
described in this paragraph.

i. The Offering shall be closed only upon receipt by the Underwriter of a
cold-comfort letter from the independent certified public accountant, which
letter is acceptable to the Underwriter and the basic content of which is agreed
to by the independent certified public accountant prior to its engagement by the
Company.


                                       12
<PAGE>
Letter of Intent between
Redline Performance Products, Inc.
and GunnAllen Financial, Inc.
July 12, 2002

j. Upon completion of the Offering and for a period of two years from the
Effective Date, the Underwriter shall have the option to designate one
individual as a non-voting advisor to the Company's Board of Directors. Such
person shall not be an employee of, or otherwise affiliated with, the
Underwriter, and, as a condition to such person participating in Redline
meetings or otherwise obtaining access to confidential information, such person
shall execute a nondisclosure agreement and an agreement to comply with
applicable securities laws, which agreement shall be in a form reasonably
requested by Redline. The Underwriter's right set forth in this paragraph shall
cease and be of no further effect on the date the Underwriter's right of first
refusal terminates.

k. The parties hereby terminate the Agency Agreement between them dated March 1,
2002, as amended, except that the provisions therein specifically referenced as
surviving termination shall continue to be in full force and effect.


13.   LETTER OF INTENT

      This Letter of Intent is not intended to constitute a binding agreement
either to consummate the Offering outlined herein, or to enter into the
Underwriting Agreement. It is expressly understood that this document is a
Letter of Intent only, and that, except for Sections 6.b., 12.h. and 12.k. no
obligations or agreements of any kind are intended to be created between the
parties hereto. Parties propose to proceed promptly and in good faith to
conclude arrangements with respect to the proposed Offering, but any legal
obligations between the parties, except for Sections 6.b., 12.h. and 12.k.,
shall be only as set forth in the Underwriting Agreement. This Letter of Intent
This Letter of Intent may not be assigned by either party without the prior
written consent of the other party.


                                       13
<PAGE>
Letter of Intent between
Redline Performance Products, Inc.
and GunnAllen Financial, Inc.
July 12, 2002

If the foregoing is agreeable to Redline, kindly execute a duplicate copy of
this Letter of Intent and deliver it to the undersigned at the undersigned at
the address set forth above. This Letter of Intent shall remain in effect until
the earliest of (i) August 31, 2002, if the minimum number of Units have not
been sold in the Private Placement on or before such date, (ii) execution of a
definitive Underwriting Agreement; and (iii) December 31, 2002, if the
Underwriter and Redline have not executed a definitive Underwriting Agreement on
or before such date; provided that such date shall be February 15, 2003 if such
delay was not directly caused by GAF (e.g., delay in obtaining audited financial
information, market conditions, etc.).

                  Very Truly Yours,
                  GunnAllen Financial, Inc.

                  By:  /s/ Howard A. Davis
                       Howard Davis, Executive Vice President


         Accepted and agreed this 12th day of July, 2002.


                  Redline Performance Products, Inc.

                  By:   /s/ Kent Harle
                  Kent Harle, President and CEO


                                       14
<PAGE>
                            GUNNALLEN FINANCIAL, INC.
                        1715 N. WESTSHORE BLVD 7TH FLOOR
                              TAMPA, FLORIDA 33607

DECEMBER 31, 2002
Mr. Mark Payne
President
Redline Performance Products
2510 Commerce Way
Vista, Ca   92083

RE:   Amendment to Letter of Intent

Dear Mr. Payne:

On July 12, 2002, GunnAllen Financial, Inc. ("GAF") and Redline Performance
Products, Inc ("Redline") entered into a letter of intent ("Letter of Intent")
regarding a proposed bridge financing and a proposed initial public offering of
Redline common stock. As previously discussed, we hereby amend the Letter of
Intent by deleting, in its entirety, the second sentence of the second paragraph
of Section 13 of the Letter of Intent, and replacing the deleted sentence with
the following sentence: "This Letter of Intent shall remain in effect through
and including April 30, 2003." All other provisions of the Letter of Intent
shall remain in full force and effect as provided therein.

If the foregoing is agreeable to Redline, kindly execute a duplicate copy of
this amendment to the Letter of Intent and deliver it to the undersigned at the
address set forth above.

Very Truly Yours,
GunnAllen Financial, Inc.

By:   /s/ Howard A. Davis
         Howard Davis, Executive Vice President

Accepted and agreed this 31st day of December, 2002.

Redline Performance Products, Inc.

By:   /s/ Mark A. Payne
         Mark Payne, President


822224.1