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                                                                    Exhibit 10.3

            [THE MAYOR'S OFFICE OF ECONOMIC DEVELOPMENT LETTERHEAD]




DECEMBER 17, 1999

President
AuGRID of Nevada, Inc.
140 Public Square
The Park Building, Suite 208
Cleveland, OH 44114



SUBJECT:    LETTER OF UNDERSTANDING
            ASCOT INDUSTRIAL PARK

Dear Sir:

I am pleased that AuGRID of Nevada, Inc. is considering a locatio within the
City of Akron's Ascot Industrial Park for its new industrial facility. Your
business would be a welcome addition to our community and industrial park.

The following proposal outlines conditions under which the City would offer a
parcel to the AuGRID Corporation for a new industrial development. If
acceptable, this letter would form the basis for a Development Agreement between
the City of Akron (City) and AuGRID of Nevada, Inc. (Company).

1.       LAND: The subject parcel consists of 5 acres (approx.) and is located
         in the Ascot Industrial Park (see attached drawing). A survey drawing,
         establishing exact site dimensions, will be prepared by the City.
         Please note that if the Company's master development plan indicates
         that additional land will be needed to accommodate future expansions,
         the City is receptive to holding an adjacent reserve parcel for sale
         under terms identical to those for the initial parcel as described
         below.


2.       LAND COST: The 5 acre development parcel and an additional 5 acre
         reserved parcel are available for sale at $18,000 per acre, subject to
         an approved plan. This price can be reduced to $9,000 per acre if the
         Company will commit to using its best efforts to achieve an employment
         level of at least 20 employees per acre at this location within 3
         years of completion.

3.       LAND CONVEYANCE: The City can convey the land either in fee simple or
         through an unsubordinated capitalized lease for up to 20 years, at an
         annual interest rate of 2% below the prime lending rate, fixed at time
         of closing. The property would be transferred to you in fee simple for
         $1.00 at the end of the term. The lease
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AuGRID of Nevada, Inc.
December 17, 1999
Page 2

         agreement would grant you the right to purchase at any time after
         completion of the Phase I improvement for the unpaid principal balance.
         Please indicate your preferred conveyance arrangement when you return
         this executed letter.

4.       COMPANY GUARANTEE: A good faith deposit of 10% of the purchase price
         must be received by the City prior to submittal of the Development
         Agreement to the Planning Commission. Alternatively, a Letter of
         Credit in that amount can be provided. Upon completion of the Phase I
         construction according to the terms of the Development Agreement and
         approved plans, the City will release the deposit or Letter of Credit.

5.       PLAN SUBMITTAL: A set of building and site plans including site layout
         of all anticipated construction phases, Phase I building elevations
         parking, landscaping, and signage are required for review by the
         Urban Design and Historic Preservation Commission. A copy of the
         commission schedule will be provided shortly.

6.       APPROVAL: The Development Agreement is subject to the approval of the
         City Planning Commission and the Akron City Council. A copy of the
         Planning Commission schedule is attached.

7.       PAYMENT IN LIEU OF TAXES: The Development Agreement will contain
         provisions for the City to collect payments in lieu of taxes (PILOT)
         in order to offset land cost and other site-related public
         improvements. The PILOT will be the equivalent of the real property
         taxes on the improvements to the property, had those improvements not
         been exempted from taxation.

8.       PERSONAL PROPERTY TAX ABATEMENT: The Company may choose to seek a
         partial abatement of personal property taxes on eligible personal
         property associated with this project, as the project is included
         within the City of Akron's State Enterprise Zone. The City will
         cooperate in assisting the Company in its application for the abatement
         program.

9.       STATE MACHINERY AND EQUIPMENT TAX CREDIT: The City will assist the
         Company in its application to the State of Ohio for a 13.5 percent tax
         credit on eligible new manufacturing machinery and equipment.

10.      STATE JOB CREATION TAX CREDIT: The City will assist the Company in its
         application to the State for a corporate franchise / income tax credit
         under the Job Creation Tax Credit Program.

11.      EVIDENCE OF FINANCING: Submission to the City of evidence of financing
         to complete the Phase I construction is needed from the Company prior
         to execution of the Development Agreement by the City.
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AuGRID of Nevada, Inc.
December 17, 1999
Page 3


12.      CONSTRUCTION REQUIREMENTS: Phase I construction by the Company shall
         consist of an industrial building of a minimum of 40,000 sq. ft.
         Construction must be initiated within two months of execution of the
         Development Agreement by the City of Akron and completed within twelve
         months. The Developer agrees to use his best effort to complete a
         Phase II expansion of at a second industrial building of at least
         40,000 square feet building on the site within 5 years.

13.      EMPLOYMENT: Upon opening of Phase I, a minimum of 35 jobs are to be
         transferred to or created at this facility. The Company commits that
         within 3 years, at least 50 employees will be based in the Phase I
         facility. The Company agrees to base at least 50 jobs in a Phase II
         facility upon opening.

14.      PRELIMINARY PLANNING ANALYSIS: The Company shall conduct preliminary
         analysis, including soil borings and testing to determine the
         suitability of the site for the proposed construction. The City will
         grant this access by license agreement prior to conveyance of the site.

15.      TEMPORARY ACCESS/UTILITIES: The City agrees to construct a temporary
         access drive from West Bath Road and to extend sanitary sewer service
         to the site at City expense. The 16-inch diameter existing water main
         in the West Bath Road right-of-way may be utilized for water service
         and storm water management can be accommodated on site. The Company
         agrees to connect to permanent access and public utilities at its
         expense, when they are provided to the property line as Ascot Parkway
         is extended by the City.

16.      MINERAL RIGHTS: The City shall reserve all mineral rights including,
         but not limited to gas and oil, as well as the right to include the
         parcel within any City drilling unit. Any facilities related to the
         extraction or transportation of minerals will be situated in a manner
         so as not to adversely impact the Company's business operations.

17.      EASEMENTS: The City will reserve a 10 foot wide perimeter easement
         for installation and maintenance of gas or oil pipelines associated
         with any future removal of undergound mineral resources. The easement
         will prohibit construction of a building or other structures within the
         easement area. Landscaping and pavement of driveways and parking areas
         are permitted.

18.      REAL ESTATE BROKER: The City acknowledges that Robert C. Meeker has
         acted a real estate broker on behalf of the City. The City hereby
         agrees to remit a commission of 10 percent of the land purchase price
         to Robert C. Meeker upon closing of this transaction.

These represent the basic conditions under which the City and AuGRID of Nevada,
Inc. would proceed with a development in Ascot Industrial Park. The City
requests a signature below to serve as a mutual understanding concerning these
conditions. Upon your return of this signed letter, the Development Agreement
will be prepared as outlined above. In
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AuGRID of Nevada, Inc.
December 17, 1999
Page 4

the event that this letter has not been executed and returned to this office
within 30 days, the above offer will be withdrawn.

The City of Akron would welcome your corporate decision to locate a new facility
in the Ascot Industrial Park. Please feel free to contact me should you have any
questions or need further information.

Sincerely.


/s/ James W. Phelps

James W. Phelps, Deputy Mayor
Economic Development


APPROVAL BY:

AuGRID of Nevada, Inc.


/s/ M. J. Shaheed                12-17-99
------------------------       -----------
        President                 Date


cc: Blakemore, Meeker & Bowler, Attn: B. Meeker
    M. Albrecht, D. Lietz