EXHIBIT 10.20
GCA
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[GCA LETTERHEAD]
December _____, 2000
Xxxxxxx X. Xxxxxxxxxxx, President
Emissions Testing, Inc.
000 Xxxxxx Xxxx
Xxxxxxxx 000, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Re: Letter Agreement Regarding Transfer Restrictions on Securities to
be Issued under that certain Securities Purchase Agreement dated
as of June 1, 2000, between Emissions Testing, Inc., a Georgia
corporation (the "Company") and GCA Strategic Investment Fund
Limited, a Bermuda corporation ("GCA"), as amended (the "Purchase
Agreement") (for purposes hereof, unless otherwise indicated
herein, all capitalized terms used in this letter shall have the
same meanings ascribed to them in the Purchase Agreement)
Dear Xx. Xxxxxxxxxxx:
We refer to the above-referenced Purchase Agreement, pursuant to which,
among other things, the Company agreed to register with the Securities and
Exchange Commission (the "SEC"), for and on behalf of GCA, 2,500,000 shares
(sometimes hereafter referred to as the "Shares") of the Company's common stock,
no par value per share ("Common Stock"), issuable to GCA upon conversion of the
Convertible Debentures and upon exercise of the Warrants.
GCA understands that the Company has filed a registration statement on
Form S-1 (the "Registration Statement") with the SEC for the registration of
certain shares of the Common Stock in an offering (the "Offering") under the
Securities Act of 1933, as amended (the "Act"). Among the shares of Common Stock
to be registered in the Offering are the Shares.
Inasmuch as GCA wishes to induce the Company to continue its efforts in
connection with the Offering, GCA hereby agrees with, and represents to, the
Company that GCA will not,
Emissions Testing, Inc.
December _____, 2000
Page 2
directly or indirectly, sell, offer to sell, grant an option for the sale of,
assign, transfer, pledge, hypothecate or otherwise encumber or dispose of in any
manner, any of the Shares, including pursuant to Rule 144 or Rule 144A under the
Act, from and after the date hereof except as follows:
(a) The Company agrees that from and after the date and time that the SEC
declares the Registration Statement effective under the Act (the
"Effective Time"), GCA shall be entitled to sell, offer to sell, grant
an option for the sale of, assign, transfer, pledge, hypothecate or
otherwise encumber or dispose of in any manner, up to 15% of the
Shares issuable to GCA upon conversion of the Convertible Debentures
outstanding as of the Effective Date or issued to GCA thereafter
pursuant to the Purchase Agreement (the "Conversion Shares"), and 100%
of the Shares issuable upon exercise of the Warrants owned by GCA as
of the Effective Date or issued to GCA thereafter pursuant to the
Purchase Agreement (the "Warrant Shares");
(b) The Company further agrees that, from and after the 90th consecutive
calendar day after the Effective Date, GCA shall have the right to
sell, offer to sell, grant an option for the sale of, assign,
transfer, pledge, hypothecate or otherwise encumber or dispose of in
any manner, up to an additional 15% of the Conversion Shares;
(c) The Company further agrees that, from and after the 180th consecutive
calendar day after the Effective Date, GCA shall have the right to
sell, offer to sell, grant an option for the sale of, assign,
transfer, pledge, hypothecate or otherwise encumber or dispose of in
any manner, up to an additional 20% of the Conversion Shares;
(d) The Company further agrees that from and after October 1, 2001, the
transfer restrictions and limitations set forth herein relating to the
Shares shall expire and shall have no further force or effect
whatsoever; and
(e) The Company further agrees that notwithstanding the transfer
restrictions set forth herein, the Company remains fully obligated
pursuant to the terms and provisions of that certain Registration
Rights Agreement dated as of June 1, 2000 between the Company and GCA
(the "Registration Rights Agreement") and such Agreement remains in
full force and effect without any amendment.
GCA agrees and understands that:
(f) Any sale or other transaction involving all or any part of the Shares
are, and shall hereafter remain, subject to all applicable federal and
state securities laws and regulations.
Emissions Testing, Inc.
December 12, 2000
Page 3
(g) The Company may place a legend reflecting this letter and terms hereof
on any certificate evidencing the Shares which are subject to the
restrictions set forth above at the time of their issuance, and may
give written notice of this letter, and the terms hereof, to the
Company's transfer agent;
(h) This letter, and the terms hereof, shall be binding upon GCA and its
successors and assigns; and
(i) The Company is relying upon the agreements and representations of GCA
set forth in this letter in filing the Registration Statement and
amendments thereto and in consummating the Offering.
(j) The Company shall not amend or terminate in any manner whatsoever any
agreement relating to the restriction of the transfer of shares of the
Company's Common Stock, as described in the Registration Statement and
attached as exhibits thereto, without the prior written consent of
GCA.
In the event the Registration Statement has not been declared effective
by the SEC on or before November 1, 2001, GCA and the Company hereby agree that
this Agreement shall terminate automatically without any further action required
by GCA or the Company and GCA shall have all of the rights set forth in the
Purchase Agreement, the Registration Rights Agreement and any related
transaction agreement. If the foregoing meets with your understanding of our
agreement, please so signify by signing and returning this Letter Agreement to
us.
Very truly yours,
GCA STRATEGIC INVESTMENT FUND
LIMITED
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
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Position: Director
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Emissions Testing, Inc.
December 1, 2000
Page 4
Xxxxxx to and accepted as of the day and year first above written.
EMISSIONS TESTING, INC.
By: /s/ Xxxx Xxxxxxxxxxx
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Name: Xxxx Xxxxxxxxxxx
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Position: President/CEO
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