EXHIBIT 10.3
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October 18, 2005

Mr. Ken Inouye
Chairman
Pacific Fuel Cell Corp.
131 N. Tustin Ave.
Suite 100
Tustin, CA  92780

     Re:  Agreement for Scale-Up Development Activities of the nanoMEA

Dear Ken:

Bourns, Inc. ("Bourns") and Pacific Fuel Cell Corp. ("PFC") have had discussions
regarding the proprietary manufacturing processes for electro-catalyst and
nanostructured membrane electrode assembly ("nanoMEA") that incorporates the
aforementioned electro-catalyst. Specifically, the electro-catalyst with carbon
nanotube and carbon nanofiber support is prepared by a reduction process of
platinum salt using ethylene glycol under reflux conditions that has been shown
to have better performance than other catalysts such as E-TEK catalyst for
hydrogen as well as methanol fuel cells, and the nanoMEA is manufactured by a
filtration process that has the potential of offering better alignment for the
nanotubes and nanofibers and higher throughput for the nanoMEA production than
the current spray or brush techniques.

PFC has created a bench- top scale process and is interested in working with
Bourns to attempt to scale up the catalyst preparation process to be able to
manufacture nanoMEA products on a commercially practical basis. Bourns is
interested in working with PFC to help develop commercially practical nanoMEA
products.

After discussion, the parties have reached the following agreement (this
"Agreement").

1.     Under the technical direction and with the technical support of PFC,
       Bourns will attempt at its Riverside, California facility to scale up
       PFC's new process for making electro-catalyst and nanoMEA products from
       bench-top scale to commercial scale.

       A.     These scale-up efforts will commence promptly after execution of
              this Agreement and are expected to take approximately two months.

       B.     Bourns, at its expense, will provide equipment, supplies and
              Bourns employees for the scale-up experiments. Bourns agrees not
              to submit any of its expenses to PFC for payment or reimbursement.

       C.     PFC, at its expense, will provide a parts list, supplier contacts,
              process parameters, special equipment and PFC technical personnel
              as needed for the scale-up experiments. PFC agrees not to submit
              any of its expenses to Bourns for payment or reimbursement.

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2.     If Bourns and PFC are able to scale up PFC's new process from bench-top
       scale to commercial scale, Bourns agrees to supply reasonable quantities
       of samples of the catalysts and nanoMEA's produced from the scaled-up
       process to PFC for further testing and evaluation by PFC. PFC agrees that
       all such samples shall be provided by Bourns on an "AS-IS" basis without
       representation or warranty of any kind. PFC shall be solely responsible
       for any losses or liabilities of any nature arising out of or related to
       PFC's handling, use or disposition of such samples.

3.     All rights to inventions that are conceived and reduced to practice
       solely by PFC shall be the sole property of PFC. All rights to inventions
       that are conceived and reduced to practice solely by Bourns shall the
       sole property of Bourns. PFC and Bourns shall jointly own all rights to
       inventions that are conceived and reduced to practice by PFC and Bourns.

4.     Either Bourns or PFC may terminate its involvement in these activities at
       any time without cause or reason, upon written notice to the other party.
       In such case, Bourns shall return to PFC any unused materials or
       equipment provided by PFC in connection with the scale-up experiments.

5.     Following conclusion of the activities described in this Agreement, the
       parties may, but are not obligated to, enter into further discussions
       regarding such subjects as manufacturing of the nanoMEA product,
       licensing of the MEA production process, and test marketing of the
       nanoMEA product.

If the above accurately sets forth the understanding between Bourns and PFC,
please sign below where indicated and fax a copy back to me at (951) 781-5675.

We look forward to working together with PFC.

Sincerely,                                        Agreed to and Accepted by:

BOURNS, INC.                                     PACIFIC FUEL CELL CORP.


                                                 -------------------------------
Thanh Nguyen                                     Ken Inouye
Vice President Engineering - Trimpot Division    Chairman

                                                 Date:                , 2005
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