|OUR CREDIT NO. | ISSUE DATE  | EXPIRY DATE | LETTER OF CREDIT AMOUNT
|-------------- | ----------- | ----------- | -----------------------
|XXX            | 11/07/ 2002 | 11/08/2003  | USD $2,400,000         

|BENEFICIARY                                                                                                  |  | APPLICANT                                                                      
|------------------------------------------------------------------------------------------------------------ |  | -------------------------------------------------------------------------------
|BALLARD POWER SYSTEMS INC.9000 GLENLYON PARKWAY
                   BURNABY, BRITISH COLUMBIA CANADA, V51 519 |  | MILLENNIUM CELL INC.1 INDUSTRIAL WAY
                   WESTEATONTOWN, NJ 07724

DEAR BENEFICIARY:



WE HEREBY ESTABLISH OUR CLEAN STANDBY LETTER OF CREDIT IN YOUR FAVOR, AS
            BENEFICIARY, WHICH IS AVAILABLE BY PAYMENT AGAINST THE FOLLOWING DOCUMENTS:

|1) | A DOCUMENT TITLED ON ITS FACE "SIGHT
                   DRAFT" IN ACCORDANCE WITH EXHIBIT A, ATTACHED HERETO AND APPROPRIATELY
                   COMPLETED.                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2) | AN ORIGINAL OF A "CERTIFICATE OF DRAW", IN
                   THE FORM OF EXHIBIT B, ATTACHED HERETO, APPROPRIATELY COMPLETED AND SIGNED BY
                   AN AUTHORIZED OFFICER OF THE BENEFICIARY.                                                                                                                                                                                                                                                                                                                                                                
|3) | THE ORIGINAL OF THIS LETTER OF CREDIT AND
                   ALL AMENDMENTS, IF ANY, FOR OUR ENDORSEMENT. (IF YOUR DEMAND REPRESENTS A
                   PARTIAL DRAWING HEREUNDER, WE WILL ENDORSE THE ORIGINAL CREDIT AND RETURN SAME
                   TO YOU FOR POSSIBLE FUTURE CLAIMS. IF, HOWEVER, YOUR DEMAND REPRESENTS A FULL
                   DRAWING OR IF SUCH DRAWING IS PRESENTED ON THE DAY OF THE RELEVANT EXPIRATION
                   DATE HEREOF, WE WILL HOLD THE ORIGINAL FOR OUR FILES AND REMOVE SAME FROM
                   CIRCULATION.)

THIS LETTER OF CREDIT SETS FORTH IN FULL THE TERMS OF OUR UNDERTAKING AND
            SUCH UNDERTAKING SHALL NOT IN ANY WAY BE MODIFIED, AMENDED OR AMPLIFIED BY
            REFERENCE TO ANY DOCUMENT OR INSTRUMENT REFERRED TO HEREIN OR IN WHICH THIS
            LETTER OF CREDIT IS REFERRED TO OR TO WHICH THIS LETTER OF CREDIT RELATES AND
            ANY SUCH REFERENCE SHALL NOT BE DEEMED TO INCORPORATE HEREIN BY REFERENCE ANY
            DOCUMENT OR INSTRUMENT.

IT IS A CONDITION OF THIS LETTER OF CREDIT THAT IT SHALL BE DEEMED
            AUTOMATICALLY EXTENDED WITHOUT AMENDMENT FOR ONE YEAR FROM THE PRESENT OR ANY
            FUTURE EXPIRY DATE UNLESS AT LEAST 60 DAYS (SIXTY DAYS) PRIOR TO SUCH
            EXPIRATION DATE, WE NOTIFY YOU IN WRITING BY CERTIFIED MAIL OR EXPRESS COURIER
            THAT WE ELECT NOT TO RENEW THIS LETTER OF CREDIT FOR ANY SUCH ADDITIONAL ONE
            YEAR PERIOD. HOWEVER, THIS STANDBY LETTER OF CREDIT SHALL NOT BE EXTENDED
            BEYOND 11/22/2005 WHICH WILL BE CONSIDERED THE FINAL EXPIRATION DATE.

WE ENGAGE WITH YOU THAT ALL DOCUMENTS PRESENTED IN COMPLIANCE WITH THE
            TERMS OF THIS LETTER OF CREDIT WILL BE DULY HONORED BY US IF DELIVERED TO
            WACHOVIA BANK, NATIONAL ASSOCIATION, ATTN: LETTER OF CREDIT DEPARTMENT, MAIL
            CODE NC 6034, 401 LINDEN STREET, WINSTON-SALEM, NORTH CAROLINA 27101, PRIOR TO
            3 P.M. ON OR BEFORE THE EXPIRATION DATE HEREOF.

> SEE CONTINUATION

ATTACHED TO AND FORMING PART OF STANDBY CREDIT NO. XXX PAGE TWO

UPON RECEIPT BY THE UNDERSIGNED OF A CERTIFICATE IN THE FORM OF EXHIBIT C
            ATTACHED HERETO SIGNED BY AN AUTHORIZED OFFICER OF BENEFICIARY, STATING THAT
            THE AGGREGATE OUTSTANDING PRINCIPAL AMOUNT OF THE DEBENTURE HAS BEEN REDUCED BY
            EITHER PAYMENT OR CONVERSION INTO CAPITAL STOCK AND SETTING FORTH THE AMOUNT OF
            SUCH REDUCTION, AND ACCOMPANIED BY THE ORIGINAL COPY OF THIS STANDBY LETTER OF
            CREDIT, WE WILL ENDORSE THIS STANDBY LETTER OF CREDIT TO REFLECT A REDUCTION OF
            THE UNDRAWN FACE AMOUNT THEREOF BY AN AMOUNT EQUAL TO THE AMOUNT OF SUCH
            REDUCTION AS SET FORTH IN SUCH CERTIFICATE, AND WILL RETURN SUCH STANDBY LETTER
            OF CREDIT TO BENEFICIARY. IT IS A CONDITION OF THIS LETTER OF CREDIT THAT
            DOCUMENTS MAY ALSO BE PRESENTED AT THE COUNTERS OF OUR NEW YORK BRANCH LOCATED
            AT 11 PENN PLAZA, NEW YORK, NY 10001 FOR FURTHER DELIVERY TO WACHOVIA BANK,
            NATIONAL ASSOCIATION, ATTN: LETTER OF CREDIT DEPARTMENT, MAIL CODE NC 6034, 401
            LINDEN STREET, WINSTON-SALEM, NORTH CAROLINA 27101.

NOTE: IN THE EVENT THAT THE BENEFICIARY ELECTS TO PRESENT DOCUMENTS AT
            THE COUNTER OF OUR NEW YORK BRANCH, THE BENEFICIARY MUST IMMEDIATELY INSTRUCT
            THE BRANCH MANAGER TO CONTACT ONE OF THE FOLLOWING PERSONS IN THE STANDBY
            LETTER OF CREDIT DEPARTMENT: 1) SHARON PEACE, (336) 735-32452) TIRA
            MCGEE (336) 735-3345

EXCEPT SO FAR AS OTHERWISE EXPRESSLY STATED HEREIN THIS LETTER OF CREDIT
            IS SUBJECT TO THE "INTERNATIONAL STANDBY PRACTICES 98 (1SP 98), PUBLICATION NO.
            590." ALL INQUIRIES REGARDING THIS CREDIT SHOULD BE DIRECTED TO US AT OUR PHONE
            NUMBER 1-800-776-3862.



VERY TRULY YOURS,WACHOVIA BANK, NATIONAL ASSOCIATION

/s/ Linda A. Hampton (AUTHORIZED SIGNATURE)

EXHIBIT A

SIGHT DRAFT

|$__________________ |  | [CITY], [STATE] [MONTH] __, 200_
|------------------- |  | --------------------------------

AT SIGHT, PAY TO THE ORDER OF BALLARD POWER
            SYSTEMS INC. THE SUM OF[AMOUNT IN WORDS] DOLLARS ($__________).

VALUE RECEIVED, AND CHARGE TO THE ACCOUNT
            OF MILLENNIUM CELL INC.      DRAWN UNDER WACHOVIA
            BANK, NATIONAL ASSOCIATION STANDBY LETTER OF CREDIT NO. XXX, DATED NOVEMBER 7,
            2002, ISSUED BY WACHOVIA BANK, NATIONAL ASSOCIATION IN FAVOR OF BALLARD POWER
            SYSTEMS INC. FOR THE ACCOUNT OF MILLENNIUM CELL INC.

| | BALLARD POWER SYSTEMS INC.          
| | ------------------------------------
| |                                     
| | BY:____________________  NAME:TITLE:

PLEASE REMIT PROCEEDS TO OUR ACCOUNT AT:

EXHIBIT B

CERTIFICATE OF DRAW

THE UNDERSIGNED HEREBY CERTIFIES TO
            WACHOVIA BANK, NATIONAL ASSOCIATION (THE "BANK") WITH REFERENCE TO THE STANDBY
            LETTER OF CREDIT NO. XXX (THE "LETTER OF CREDIT") ISSUED BY THE BANK IN FAVOR
            OF BALLARD POWER SYSTEMS INC. THAT:

|1. | I AM THE __________ OF BALLARD POWER
                   SYSTEMS INC. AND AM AUTHORIZED TO EXECUTE AND DELIVER THIS CERTIFICATE TO THE
                   BANK ON BEHALF OF BALLARD POWER SYSTEMS INC.                                                                                                                                                                                                      
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | PURSUANT TO SECTION 2(d) OF THE SECURED
                   CONVERTIBLE DEBENTURE DATED _________ ___, 2002, MADE BY MILLENNIUM CELL INC.
                   PAYABLE TO THE ORDER OF BALLARD POWER SYSTEMS INC. IN THE ORIGINAL PRINCIPAL
                   AMOUNT OF $2,400,000 (THE "DEBENTURE"), BALLARD POWER SYSTEMS INC. IS ENTITLED
                   TO $_____________ UNDER THE LETTER OF CREDIT.
|3. | THE AMOUNT OF THE LETTER OF CREDIT
                   DISBURSEMENT DEMANDED HEREBY IS $______________.                                                                                                                                                                                                                                                                                                     

IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY
            HAND THIS __ DAY OF _____ 200__.

| | BALLARD POWER SYSTEMS INC.                
| | ------------------------------------------
| |                                           
| | BY:___________________________ NAME:TITLE:

EXHIBIT C

CERTIFICATE OF REDUCTION

THE UNDERSIGNED HEREBY CERTIFIES TO
            WACHOVIA BANK, NATIONAL ASSOCIATION (THE "BANK") WITH REFERENCE TO THE STANDBY
            LETTER OF CREDIT NO. XXX (THE "LETTER OF CREDIT") ISSUED BY THE BANK IN FAVOR
            OF BALLARD POWER SYSTEMS INC., THAT:

|1. | I AM THE ____________ OF BALLARD POWER
                   SYSTEMS INC. AND AM AUTHORIZED TO EXECUTE AND DELIVER THIS CERTIFICATE TO THE
                   BANK ON BEHALF OF BALLARD POWER SYSTEMS INC.                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | THE UNDRAWN FACE AMOUNT OF THE LETTER OF
                   CREDIT AS OF THE DATE HEREOF EQUALS $__________.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|3. | THE AGGREGATE OUTSTANDING PRINCIPAL AMOUNT
                   UNDER THE SECURED CONVERTIBLE DEBENTURE DATED ______________ MADE BY MILLENNIUM
                   CELL INC. PAYABLE TO THE ORDER OF BALLARD POWER SYSTEMS INC. IN THE ORIGINAL
                   PRINCIPAL AMOUNT OF $2,400,000 (THE "DEBENTURE") HAS BEEN REDUCED BY
                   [PAYMENT IN THE AMOUNT OF $______ BY MILLENNIUM CELL INC.] [VIRTUE OF THE
                   CONVERSION OF $_________ OF SUCH PRINCIPAL AMOUNT OUTSTANDING ON THE DEBENTURE
                   INTO SHARES OF CAPITAL STOCK OF MILLENNIUM CELL INC.]ON ______, 200_.
|4. | WE CONSENT TO A REDUCTION IN THE UNDRAWN
                   FACE AMOUNT OF THE LETTER OF CREDIT TO $ _________________, REPRESENTING THE
                   PRINCIPAL AMOUNT REDUCTION SET FORTH IN PARAGRAPH 3 ABOVE, [LESS $_________,
                   THE AMOUNT OF PREMIUM OWING UNDER THE DEBENTURE], AS OF [INSERT DATE SET
                   FORTH IN PARAGRAPH 3 ABOVE].                                                                                                                                                                                                                                         
|5. | THE ORIGINAL COPY OF THE LETTER OF CREDIT
                   IS ATTACHED HERETO.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             



IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY
            HAND THIS __ DAY OF _____ 200__.

| | BALLARD POWER SYSTEMS INC.                
| | ------------------------------------------
| |                                           
| | BY:___________________________ NAME:TITLE:
| |                                           
| | [APPLICANT]                               
| |                                           
| | BY:___________________________ NAME:TITLE:
| |                                           
| |