CONTINUING LETTER OF CREDIT AGREEMENT  
(Ballard) 
       

       
       

       
            In consideration of the Bank (as defined below) in its discretion issuing
            from time to time letters of credit whether documentary or standby and all
            amendments thereto (hereinafter each individually, and all collectively called
            the “Credit”) substantially in accordance with an Application (as
            defined below) for a Credit tendered to the Bank, Millennium Cell Inc.
            (hereinafter, individually and collectively, the “Applicant”) agrees:

       

       
            1.   Definitions.  As used herein: (A)
            "Agreement" means each Application by the Applicant for a Credit and
            this Continuing Letter of Credit Agreement, as each may be modified; (B)
            "Application" means, if Applicant uses electronic communication
            facilities to apply for or instruct the Bank as to the contents of a Credit,
            information sufficient to enable the Bank to prepare and issue or amend a
            Credit for Applicant’s account transmitted by electronic message (which
            may, but need not, be computer generated), including facsimile, directed to the
            Bank by Applicant using such identification codes, passwords, and other
            security procedures as the Bank and Applicant may agree are commercially
            reasonable from time to time; or a written and signed application with
            sufficient information delivered to the Bank to enable it to prepare and issue
            or amend a Credit for Applicant’s account; (C) "Bank" means
            Wachovia Bank, National Association and all of its branches, whether in the
            United States or foreign and any of Bank’s affiliates that issue letters
            of credit; Applicant authorizes and directs the Bank to select the branch or
            affiliate which will issue or process any Credit; and for the purposes of
            Sections 4, 7 and 9, "Bank" includes correspondents of Bank; (D)
            “Business Day” means any day that is not a Saturday, Sunday or
            other day on which commercial banks are authorized or required to close at the
            place where Bank is obligated to honor a presentation or otherwise act under
            the Credit or this Agreement; (E) “Collateral” means 
            (i) all Applicant’s Property (as hereinafter defined) now or
            hereafter in possession or control of Bank or its agents, affiliates or
            representatives (for any purpose); and (ii) all proceeds and products of the
            foregoing, now or later existing; (F) “Debentures” means the
            $2,400,000 Secured Convertible Debentures of Applicant issued on or about the
            date hereof and purchased by Ballard Power Systems, Inc.; (G) "Draft"
            means any draft (sight or time), receipt, acceptance, cable, SWIFT or other
            written demand for payment; (H) "Event of Default" means (i) failure to
            pay or perform any of the Obligations when due or Applicant shall fail to abide
            by any of the terms and provisions of this Agreement or any agreement executed
            by Applicant in favor of Bank in connection herewith; (ii) termination of
            Applicant’s existence; (iii) institution of any proceeding under any law
            relating to bankruptcy, insolvency or reorganization by or against Applicant,
            or the appointment of a receiver or similar official for Applicant or any of
            Applicant’s property on the occurrence of any other Bankruptcy Event (as
            that term is defined in the Debentures); (iv) seizure or forfeiture of
            Applicant or any of its property; (v) attachment or restraint of or other legal
            process against property in which Applicant has an interest in the control of
            Bank or any third party on behalf of Bank; (vi) any statement to Bank made by
            Applicant or on its behalf is incorrect or misleading in any material respect;
            (vii) Applicant’s failure to provide Bank on request any books and
            records; (viii) Applicant’s failure to withhold, collect or pay any tax
            when assessed or due; (ix) any representation or warranty made by Applicant
            herein or otherwise to Bank shall be incorrect or inaccurate in any material
            respect when made or deemed made; or (x) any other act or circumstance leading
            Bank in good faith to deem itself insecure; (I) “Good Faith”
            means honesty in fact in the conduct or transaction concerned; (J) “ISP
            98” means the International Standby Practices, International Chamber
            of Commerce (“ICC”) Publication No. 590, or any subsequent revisions
            or restatement thereof which may be adopted by the ICC and in use by the Bank;
            (K) "Jurisdiction" means the state in the United States where the Bank's
            branch which maintains Applicant’s major deposits is located, or if
            Applicant does not have deposits with the Bank, the Bank's office in a state of
            the United States where Applicant’s major banking relationship with it is
            conducted; if neither of the foregoing apply, then jurisdiction shall mean New
            York City, New York; (L) "Obligations" means all obligations of any,
            some or all of parties comprising the Applicant to Bank now or hereafter
            existing under this Agreement and under any other document entered into by
            Applicant in connection with any Agreement; (M) "Prime Rate" means that
            changing rate of interest announced publicly from time to time by Bank as its
            Prime Rate; (N) "Property" means all present and future
            “Collateral” (as that term is defined in the Security Agreement dated
            on or about the date hereof from Applicant to Bank), together with all cash and
            non cash proceeds and products thereof, and all Applicant’s rights thereto
            and all documents relative thereto; and (O) "UCP" means the Uniform
            Customs and Practice for Documentary Credits, ICC Publication Number 500, or
            any subsequent revision or restatement thereof adopted by the ICC and in use by
            the Bank. Terms not defined herein will, if defined therein, have the same
            meaning as given in the Uniform Commercial Code as amended from time to time.
       

       
            2.   Applicant’s Reimbursement of
            Bank:  (A) Applicant shall pay Bank on demand in immediately
            available funds (in United States currency) (i) the amount of each Draft drawn
            or purporting to be drawn under the Credit (whether drawn before, on or after
            the expiry date stated in the Credit); provided that if the Credit provides for
            acceptance of a time draft or incurrence of a deferred payment obligation,
            reimbursement shall be due sufficiently in advance of its maturity to enable
            the Bank to arrange for its cover in same day funds to reach the place where it
            is payable no later than the date of its maturity; (ii) any amount by which
            Bank's cost of payment under the Credit exceeds the amount paid by Applicant;
            (iii) interest on all amounts not paid when due at a fluctuating rate per annum
            equal to the Prime Rate plus 2%, but in no event at an interest rate exceeding
            the highest rate permitted by applicable law. Applicant authorizes Bank to
            immediately reimburse itself for all Drafts paid by Bank under any Credit by
            debiting the amount so paid from the Collateral. Notwithstanding the foregoing,
            Applicant’s obligation to reimburse Bank for any amounts paid by Bank
            under any Credit or any other Obligation shall be absolute and unconditional
            whether or not sufficient amounts are available from the Collateral. (B)
            Foreign Currency. If the Draft is payable in other than U.S. currency,
            Applicant will pay Bank the amount in U.S. currency from Bank at Bank’s
            current selling rate of exchange for delivery to the place of payment in the
            currency and amount in which such Draft was drawn. If there is no current
            selling rate of exchange generally offered by Bank for effecting such payment,
            Applicant will pay Bank on demand an amount which Bank deems necessary to pay
            or provide for the payment of the Obligations, and Applicant shall remain
            liable for any deficiency which may result if such amount in U.S. currency
            proves to be insufficient to effect full payment or reimbursement to Bank at
            the time when such rate of exchange shall again be current. (C) Fees, Costs
            and Expenses. Applicant
       

       
            Page 4 of 11
       

       
       
            will pay Bank (i) fees in respect of the Credit equal to thirty five (35)
            basis points per annum on the face amount of the Credit for the period of time
            the Credit is outstanding, such fee to be payable upon issuance of the Credit
            and on the yearly anniversary of the issuance of the Credit; (ii) Bank’s
            standard fees then in effect (including, if applicable, application fees,
            issuance fees, maintenance fees, amendment fees, drawing fees, discrepancy
            fees, acceptance or deferred payment obligation fees, transfer fees and
            assignment of letter of credit proceeds fees); and (iii) on demand, all costs
            and expenses that Bank incurs in connection with the Credit or this Agreement,
            including (a) reasonable attorneys’ fees and disbursements and other
            dispute resolution expenses to protect or enforce Bank’s rights or
            remedies under or in connection with the Credit, this Agreement or any separate
            security agreement, guaranty or other agreement or undertaking supporting this
            Agreement or to respond to any notice of forgery, fraud, abuse or illegality in
            connection with this Agreement, the Credit, any presentation under the Credit
            or any transaction underlying the Credit (including an active defense by Bank
            in any action in which an injunction is sought or obtained against presentation
            or honor), (b) costs and expenses in connection with any requested amendment to
            or waiver under the Credit or this Agreement, (c) reasonable costs and expenses
            in complying with any governmental exchange, currency control or other laws,
            rules or regulations of any country now or hereafter applicable to the purchase
            or sale of, or dealings in, foreign currency, (d) any stamp taxes, recording
            taxes, or similar taxes or fees payable in connection with the Credit or this
            Agreement, and (e) any adviser, confirmer, or other nominated person fees and
            expenses that are chargeable to Applicant or Bank. References in this Agreement
            to attorneys’ fees and disbursements shall include any reasonably
            allocated costs of internal counsel. (D) Increased Costs and Taxes. 
            Applicant shall pay Bank on demand increased costs or Bank’s reduction in
            yield from any new or changed reserve, capital, special deposit, tax, insurance
            or other requirement or guideline affecting the Bank’s or its
            parent’s contingent or absolute rights or obligations under or in
            connection with this Agreement or any Credit provided the Bank acts reasonably
            to avoid or minimize the increased costs or reduction in the yield and computes
            the same on a reasonable basis. Applicant agrees that all payments hereunder
            shall be made without withholding, deduction or set-off and shall be made free
            and clear of taxes other than federal and state income and franchise taxes
            imposed on the Bank. (E) Automatic Debit for Payment. Applicant
            authorizes Bank to debit any of Applicant’s accounts at Bank for any
            payments due under this Agreement, Applicant further certifies that, subject to
            the security agreement of even date, it holds legitimate ownership of each of
            these accounts and preauthorizes this debit as part of its ownership rights.
       

       
            3.   Independence; Applicant
            Responsibility.  Applicant is responsible for preparing or
            approving the text of the Credit as issued by Bank and as received by any
            Beneficiary, including responsibility for any terms and conditions thereof that
            are ineffective, ambiguous, inconsistent, unduly complicated, or reasonably
            impossible to satisfy. Applicant’s ultimate responsibility for the final
            text shall not be affected by any assistance Bank may provide such as drafting
            or recommending text or by Bank’s use or refusal to use text submitted by
            Applicant. Bank does not represent or warrant that the Credit will satisfy
            Applicant’s requirements or intentions. Applicant is responsible for the
            suitability of the Credit for Applicant’s purposes. Applicant will examine
            the copy of the Credit, and any other documents sent by Bank in connection with
            the Credit, and shall notify Bank of any non-compliance with Applicant’s
            instructions, and of any discrepancy in any document under any presentment or
            other irregularity, within 3 Business Days after Applicant receives any of such
            documents (the "Required Time"); provided, however, if the end of the Required
            Time falls on a weekend or Bank holiday, the deadline shall be extended to the
            end of the next Business Day. Applicant’s failure to give timely and
            specific notice during the Required Time of objection shall automatically waive
            Applicant’s objection, authorize or ratify Bank’s action or inaction,
            and preclude Applicant from raising the objection as a defense or claim against
            Bank 
       

       
            4.   Claims Against Bank; Waivers; Exculpations; Limitations
            of Liability, Ratification; Accounting.  (A) Applicant’s
            obligations shall be irrevocable and unconditional and performed strictly in
            accordance with the terms of this Agreement, irrespective of: (i) any change or
            waiver in the time, manner or place of payment of or any other term of the
            Obligations (including any release) of any other party who, if applicable, has
            guaranteed or is jointly and severally liable for any of the Obligations or
            granted any security therefore; (ii) any exchange, change or release of any
            Collateral or other collateral (including any failure of Bank to perfect any
            security interest therein), for any of the Obligations, (iii) any presentation
            under the Credit being forged, fraudulent or any statement therein being untrue
            or inaccurate, (iv) any agreement by Bank and any Beneficiary extending or
            shortening Bank’s time after presentation to examine documents or to honor
            or give notice of discrepancies. (B) Without limiting the foregoing, it is
            expressly agreed that the Obligations of Applicant to reimburse or to pay Bank
            pursuant to this Agreement will not be excused by ordinary negligence, gross
            negligence, wrongful conduct or willful misconduct of Bank. However, the
            foregoing shall not excuse Bank from liability to Applicant in any independent
            action or proceeding brought by Applicant against Bank following such
            reimbursement or payment by Applicant to the extent of any unavoidable direct
            damages suffered by Applicant that are caused directly by Bank’s gross
            negligence or willful misconduct; provided that (i) Bank shall be deemed to
            have acted with due diligence and reasonable care if it acts in accordance with
            standard letter of credit practice of commercial banks located in the place
            that the Credit is issued; and (ii) Applicant’s aggregate remedies against
            Bank for wrongfully honoring a presentation or wrongfully retaining honored
            documents shall in no event exceed the aggregate amount paid by Applicant to
            Bank with respect to the honored presentation, plus interest. (C) Without
            limiting any other provision of the Agreement, Bank and, as applicable, its
            correspondents: (i) may rely upon any oral, telephonic, telegraphic, facsimile,
            electronic, written or other communication believed in good faith to have been
            authorized by Applicant, whether or not given or signed by an authorized
            person; (ii) shall not be responsible for any acts or omissions by, or the
            solvency of, any Beneficiary, any nominated person or any other person;
            (iii) May honor any presentation or drawing under the Credit that appears on
            its face substantially to comply with the terms and conditions of the Credit;
            (iv) may disregard any requirement of the Credit that presentation be
            made to it at a particular place or by a particular time of day (but not any
            requirement for presentation by a particular day) or that notice of dishonor be
            given in a particular manner, and Bank may amend or specify any such
            requirement in the Credits; (v) may accept as a draft any written or electronic
            demand or request for payment under the Credit, even if nonnegotiable or not in
            the form of a draft, and may disregard any requirement that such draft, demand
            or request bear any or adequate reference to the Credit; (vi) may honor, before
            or after its expiration, a previously dishonored presentation under the Credit,
            whether pursuant to court order, to settle or compromises any claim that is
            wrongfully dishonored or otherwise, and shall be entitled to reimbursement to
            the same extent (if any) as if it had initially honored plus reimbursement of
            any interest paid by it; (vii) may honor, upon receipt, any drawing that is
            payable upon presentation of a statement advising negotiation or payment (even
            if such statement indicates that a draft or other document is being separately
            delivered) and shall not be liable for any failure of any Draft or document to
            arrive or to conform with the
       

       
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            Draft or document referred to in the statement or any underlying
            transaction; (viii) may retain proceeds of the Credit based on a valid exercise
            of Bank’s set off rights or an apparently applicable attachment order or
            blocking regulation; (ix) may select any branch or affiliate of Bank or any
            other bank to act as advising, transferring, confirming and/or nominated bank
            under the law and practice of the place where it is located; (x) shall not be
            responsible for any other action or inaction taken or suffered by Bank or its
            correspondents under or in connection with the Credit, with any presentation
            thereunder or with any Collateral, if required or permitted under any
            applicable domestic or foreign law or letter of credit practice. Examples of
            laws or practice that may be applicable, depending upon the terms of the Credit
            and where and when it is issued, include the UCC, the Uniform Rules for Demand
            Guarantees (“URG”) the UCP, the ISP, published rules of practice,
            applicable standard practice of banks that regularly issue letters of credit,
            and published statements or interpretations on matters of standard bank
            practice. (D) Neither Bank nor any of its correspondents shall be liable in
            contract, tort, or otherwise, for any punitive, exemplary, consequential,
            indirect or special damages. Any claim by Applicant under or in connection with
            this Agreement or the Credit shall be reduced by an amount equal to the sum of
            (i) the amount (if any) saved by Applicant as a result of the breach or other
            wrongful conduct complained of; and (ii) the amount (if any) of the loss that
            would have been avoided had Applicant taken all reasonable steps to mitigate
            any loss, including by enforcing its rights in the transaction(s) underlying
            the Credit, and in case of a claim of wrongful dishonor, by specifically and
            timely authorizing Bank to effect a cure.
       

       
             5.   Security Agreement.  The provisions of
            this Section shall only supplement, not supersede, provisions of any other
            security agreement in favor of Bank which are inconsistent herewith. (A)
            Security Interest. As security for the payment and performance of the
            Obligations, Applicant assigns, pledges and grants to Bank a security interest
            in the Collateral. The security interest of Bank in Collateral shall continue
            until all Obligations are repaid, and shall not be invalidated by reason of the
            delivery or possession of the Property to Applicant or anyone else. (B)
            Subrogation. As additional security for the Obligations, Bank shall be
            subrogated to the Applicant’s rights in respect of any transaction in any
            way related to the Credit or any Drafts, including rights against Beneficiary
            or any collateral. (C) Actions Regarding Collateral. Applicant will
            execute and deliver to Bank any documents, and take any action, which Bank
            deems necessary or desirable to evidence or perfect any security interest in
            favor of Bank, to acquire possession of any Property, or to protect Bank's
            interests with respect to any Collateral, including, without limitation,
            transferring or registering Property in the name of Bank; in order to
            accomplish any of the foregoing, Bank may, at its option, at any time and
            without notice to Applicant, transfer to, or register in the name of, Bank or
            its nominees any Collateral; and further, Bank is irrevocably appointed as
            attorney-in-fact for Applicant and authorized, without notice to Applicant, to
            execute and deliver all such documents and to take all such actions on behalf
            of Applicant, including, without limitation, the execution, delivery and/or
            filing of collateral control agreements, financing statements and trust receipt
            statements. This appointment is coupled with an interest. (D) Care of
            Property; Modification. Bank will exercise care in the preservation of
            Collateral if such Property is in the custody of Bank; provided, however, its
            standard of care for Property in its custody is the lesser of that required by
            applicable law or that requested by Applicant in writing. Applicant shall
            remain obligated under the terms of the Agreement notwithstanding the release
            or substitution of any Collateral at any time(s), or any delay, extension of
            time, renewal, compromise or other indulgence granted by Bank related to any
            Obligations, or to any promissory note, Draft, bill of exchange or other
            instrument related to any Obligations. Applicant waives notice of any such
            delay, extension, release, substitution, renewal, compromise or other
            indulgence, and consents to be bound thereby as fully as if Applicant had
            expressly agreed thereto in advance. The proceeds of any Collateral may be
            applied, in whole or in part, by Bank to pay any matured, or to anticipate the
            payment of any unmatured, Obligations.
       

       
             6.   Representations.  Applicant represents
            that from the date of this Agreement and until final payment in full of the
            Obligations: Accurate Information. All information now and hereafter
            furnished to Bank is and will be true, correct and complete. Any such
            information relating to Applicant's financial condition will accurately reflect
            Applicant's financial condition as of the date(s) thereof, (including all
            contingent liabilities of every type), and Applicant further represents that
            its financial condition has not changed materially or adversely since the
            date(s) of such documents. Authorization; Non-Contravention. The
            execution, delivery and performance by Applicant and any guarantor, as
            applicable, of this Agreement and other documents to which it is a party are
            within its power, have been duly authorized as may be required and, if
            necessary, by making appropriate filings with any governmental agency or unit
            and are the legal, binding, valid and enforceable obligations of Applicant and
            any guarantors; and do not (i) contravene, or constitute (with or without the
            giving of notice or lapse of time or both) a violation of any provision of
            applicable law, a violation of the organizational documents of Applicant or any
            guarantor, or a default under any agreement, judgment, injunction, order,
            decree or other instrument binding upon or affecting Applicant or any
            guarantor, (ii) result in the creation or imposition of any lien (other than
            the lien(s) created by the documents executed by Applicant in connection
            herewith) on any of Applicant's or any guarantor's assets, or (iii) give cause
            for the acceleration of any obligations of Applicant or any guarantor to any
            other creditor. Asset Ownership. Applicant has good and marketable title
            to all of the properties and assets reflected on the balance sheets and
            financial statements supplied Bank by Applicant, and all such properties and
            assets are free and clear of mortgages, security deeds, pledges, liens,
            charges, and all other encumbrances, except as otherwise disclosed to Bank by
            Applicant in the reports filed with the Securities and Exchange Commission and
            in writing and approved by Bank ("Permitted Liens"). To Applicant's knowledge,
            no default has occurred under any Permitted Liens and no claims or interests
            adverse to Applicant's present rights in its properties and assets have arisen.
            Discharge of Liens and Taxes. Applicant has duly filed, paid and/or
            discharged all taxes or other claims which may become a lien on any of its
            property or assets, except to the extent that such items are being
            appropriately contested in good faith and an adequate reserve for the payment
            thereof is being maintained. Sufficiency of Capital. Applicant is not,
            and after consummation of this Agreement and after giving effect to all
            indebtedness incurred and liens created by Applicant in connection with this
            Agreement, will not be, insolvent within the meaning of 11 U.S.C. §
            101(32). Compliance with Laws. Applicant is in material compliance in
            all respects with all federal, state and local laws, rules and regulations
            applicable to its properties, operations, business, and finances, including,
            without limitation, any federal or state laws relating to liquor (including 18
            U.S.C. § 3617, et seq.) or narcotics (including 21 U.S.C. § 801, et
            seq.) and/or any commercial crimes; all applicable federal, state and local
            laws and regulations intended to protect the environment;
       

       
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            and the Employee Retirement Income Security Act of 1974, as amended
            ("ERISA"), if applicable. Organization and Authority. Applicant is duly
            created, validly existing and in good standing under the laws of the state of
            its organization, and has all powers, governmental licenses, authorizations,
            consents and approvals required to operate its business as now conducted.
            Applicant is duly qualified, licensed and in good standing in each jurisdiction
            where qualification or licensing is required by the nature of its business or
            the character and location of its property, business or customers, and in which
            the failure to so qualify or be licensed, as the case may be, in the aggregate,
            could have a material adverse effect on the business, financial position,
            results of operations, properties or prospects of Applicant. No
            Litigation. There are no pending or, to the best of its knowledge,
            threatened suits, claims or demands against Applicant or any guarantor that
            have not been disclosed to Bank by Applicant in writing, and approved by Bank.
            Regulation U. None of the proceeds of the Credit extended pursuant to
            this Agreement shall be used directly or indirectly for the purpose of
            purchasing or carrying any margin stock in violation of any of the provisions
            of Regulation U of the Board of Governors of the Federal Reserve System
            ("Regulation U"), or for the purpose of reducing or retiring any indebtedness
            which was originally incurred to purchase or carry margin stock or for any
            other purchase which might render the Credit a "Purpose Credit" within the
            meaning of Regulation U. ERISA. Each employee pension benefit plan, as
            defined in ERISA, maintained by Applicant meets, as of the date hereof, the
            minimum funding standards of ERISA and all applicable regulations thereto and
            requirements thereof, and of the Internal Revenue Code of 1986, as amended. No
            "Prohibited Transaction" or "Reportable Event" (as both terms are defined by
            ERISA) has occurred with respect to any such plan.
       

       
            7.  Affirmative Covenants.  Applicant agrees
            that from the date hereof and until final payment in full of the Obligations,
            unless Bank shall otherwise consent in writing, Applicant will: Access to
            Books and Records. Allow Bank, or its agents, during normal business hours
            and upon reasonable notice, access to the books, records and such other
            documents of Applicant as Bank shall reasonably require, and allow Bank, at
            Applicant’s expense, to inspect, audit and examine the same and to make
            extracts therefrom and to make copies thereof. Business Continuity.
            Conduct its business in substantially the same manner as such business is now
            and has previously been conducted. Estoppel Certificate. Furnish, within
            15 days after request by Bank, a written statement duly acknowledged
            identifying each outstanding Credit and whether offsets or defenses exist
            against the Obligations. Insurance. Maintain adequate insurance coverage
            with respect to its properties and business against loss or damage of the kinds
            and in the amounts customarily insured against by companies of established
            reputation engaged in the same or similar businesses including, without
            limitation, commercial general liability insurance, workers compensation
            insurance, and business interruption insurance; all acquired in such amounts
            and from such companies as Bank may reasonably require. Management
            Letter. Applicant shall deliver to Bank within 90 days after the close of
            each fiscal year, its management letter, in form and substance acceptable to
            Bank, prepared by Applicant's independent certified public accountant.
            Maintain Properties. Maintain, preserve and keep its property in good
            repair, working order and condition, making all needed replacements, additions
            and improvements thereto, to the extent allowed by this Agreement. Notice of
            Default and Other Notices. (a) Notice of Default. Furnish to Bank
            immediately upon becoming aware of the existence of any condition or event
            which constitutes an Event of Default (or similarly denominated term) or any
            event which, upon the giving of notice or lapse of time or both, is reasonably
            likely to become an Event of Default, written notice specifying the nature and
            period of existence thereof and the action which Applicant is taking or
            proposes to take with respect thereto. (b) Other Notices. Promptly
            notify Bank in writing of (i) any material adverse change in its financial
            condition or its business; (ii) any default under any material agreement,
            contract or other instrument to which it is a party or by which any of its
            properties are bound, or any acceleration of the maturity of any indebtedness
            owing by Applicant; (iii) any material adverse claim against or affecting
            Applicant or any part of its properties; (iv) the commencement of, and any
            material determination in, any litigation with any third party or any
            proceeding before any governmental agency or unit affecting Applicant; and (v)
            at least 30 days prior thereto, any change in Applicant's name or address as
            shown above, and/or any change in Applicant's structure. Other Financial
            Information. Deliver promptly such other information regarding the
            operation, business affairs, and financial condition of Applicant which Bank
            may reasonably request. Payment of Debts. Pay and discharge when due,
            and before subject to penalty or further charge, and otherwise satisfy before
            maturity or delinquency, all obligations, debts, taxes, and liabilities of
            whatever nature or amount, except those which Applicant in good faith disputes.
            Reports and Proxies. Deliver to Bank, promptly, a copy of all financial
            statements, reports, notices, and proxy statements, sent by Applicant to
            stockholders, and all regular or periodic reports required to be filed by
            Applicant with any governmental agency or authority.
       

       
            8.  Negative Covenants.  Applicant agrees that
            from the date of this Agreement and until final payment in full of the
            Obligations, unless Bank shall otherwise consent in writing, Applicant will
            not: Change in Fiscal Year. Change its fiscal year. Change of
            Control. Make or suffer a Change in Control (as that term is defined in the
            Debentures). Guarantees. Guarantee or otherwise become responsible for
            obligations of any other person or persons, other than the endorsement of
            checks and drafts for collection in the ordinary course of business. Default
            on Other Contracts or Obligations. Default on any material contract with or
            obligation when due to Bank or any other third party or default in the
            performance of any obligation to Bank or any other third party incurred for
            money borrowed in an amount in excess of $100,000.00. Government
            Intervention. Permit the assertion or making of any seizure, vesting or
            intervention by or under authority of any government by which the management of
            Applicant or any guarantor is displaced of its authority in the conduct of its
            respective business or its such business is curtailed or materially impaired.
            Judgment Entered. Permit the entry of any monetary judgment or the
            assessment against, the filing of any tax lien against, or the issuance of any
            writ of garnishment or attachment against any property of or debts due
            Applicant in an amount in excess of $100,000.00 which is not discharged or
            execution is not stayed within 45 days of entry. 
       

       
            9.  Annual Financial Statements.  Applicant
            shall deliver to Bank, within 90 days after the close of each fiscal year,
            audited financial statements reflecting its operations during such fiscal year,
            including, without limitation, a balance sheet, profit and loss statement and
            statement of cash flows, with supporting schedules; all on a consolidated and
            consolidating basis with respect to Applicant and its subsidiaries, affiliates
            and parent or holding company, as applicable, and in reasonable detail,
            prepared in conformity with generally accepted accounting principles, applied
            on a basis consistent with that of the preceding year. All such statements
            shall be examined by an independent certified public accountant acceptable to
            Bank. The opinion of such independent certified public accountant shall
       

       
            Page 7 of 11
       

       
       
            not be acceptable to Bank if qualified due to any limitations in scope
            imposed by Applicant or any other person or entity. Any other qualification of
            the opinion by the accountant shall render the acceptability of the financial
            statements subject to Bank's approval. Applicant's accountant shall provide
            Bank with a written acknowledgment of the Bank's reliance upon the statements
            in accordance with N.J.S. 2A: 53A-25.
       

       
            10.  Periodic Financial Statements.  Applicant
            shall deliver to Bank unaudited management-prepared quarterly financial
            statements including, without limitation, a balance sheet, profit and loss
            statement and statement of cash flows, with supporting schedules, as soon as
            available and in any event within 45 days after the close of each calendar
            quarter; all on a consolidated and consolidating basis with respect to
            Applicant and its subsidiaries, affiliates and parent or holding company, as
            applicable, all in reasonable detail and prepared in conformity with generally
            accepted accounting principles, applied on a basis consistent with that of the
            preceding year. Such statements shall be certified as to their correctness by a
            principal financial officer of Applicant and in each case subject to audit and
            year-end adjustments.
       

       
            11.  Conditions to Issuance of Credit.  The
            obligation of Bank to issue any Credit is subject to the following conditions
            precedent:
       

       
                 (a)     On the
            date of issuance the following statements shall be true and Bank shall have
            received a certificate signed by an authorized officer of Applicant, dated the
            date of issuance, stating that:
       

       		(i)	The representations and
                   warranties contained in this Agreement and in any document or agreement entered
                   into in connection herewith are true and correct on and as of the date of
                   issuance of the Credit as though made on and as of such date; and
			
	 	(ii)	No event has occurred and is then
                   continuing or would result from the issuance of the Credit, which constitutes
                   an Event of Default or would constitute an Event of Default but for the
                   requirement that notice be given or time elapse or both. 


       
                 (b)     There
            shall have been no introduction of or change in, or in the interpretation of,
            any law or regulation that would make it unlawful or unduly burdensome for the
            Bank to issue or maintain the Credit, no outbreak or escalation of hostilities
            or other calamity or crisis affecting Bank, no suspension of or material
            limitation on trading on the New York Stock Exchange or any other national
            securities exchange, no declaration of a general banking moratorium by United
            States or New Jersey banking authorities, and no establishment of any new
            restrictions on transactions in securities or on banks materially affecting the
            free market for securities or the extension of credit by banks.
       

       
                 (c)     Simultaneous
            with the issuance of each Credit, the amount of funds on deposit in the account
            of Applicant at Bank (account number XXXXXXXXXXXXXX) is not less than the
            outstanding amount available for drawing under the Credits (including any
            Credit to be issued).
       

       
                 (d)     Bank shall
            have received such other documents, opinions and other matters as Bank
            reasonably requests.
       

       
            12.  Communications.  (A)
            Internet.  Applicant may electronically initiate the issuance
            and amendment of any Credit and retrieve or send information about any
            outstanding Credit by accessing an internet site maintained by the Bank (the
            “Web Site”) through Applicant’s computer equipment and web
            browser software. Applicant is responsible to provide its own computer
            equipment and web browser software and shall be responsible for all
            acquisition, installation, repair and maintenance costs associated therewith.
            Applicant shall select its own internet service provider. Applicant shall
            comply promptly with all instructions on the Web Site governing its use and the
            security measures to be maintained in connection with its use. Applicant
            authorizes the Bank to receive data and act upon Applicant’s requests
            which Bank receives over the Web Site. Applicant agrees that Bank may rely on
            the authenticity and accuracy of messages and information received by Bank on
            the Web Site purporting to be from the Applicant. Applicant agrees: (i) to
            protect all assigned operator identification passwords and accepts full
            responsibility for any compromise of security; (ii) to limit access to the Web
            Site to those persons authorized by Applicant through the use of security
            procedures implemented and enforced by the Applicant; (iii) accurately to input
            any data fields necessary to initiate, release or cancel any transaction; (iv)
            to access the Web Site as often as necessary consistent with Applicant’s
            business activities it conducts on the Web Site, which may be daily, and
            retrieve and review outstanding Credit detail reports; and (v) to notify the
            Bank promptly of any error or defect in the report. Applicant acknowledges and
            understands that the instructions sent by it through the internet to the Bank
            and the information retrieved by the Applicant from the Web Site through the
            internet will be encrypted, but that such encryption is not completely secure
            and is not free from errors, poor transmissions, interception, forgery,
            viruses, tampering, destruction, deciphering or other delay or casualty. The
            Bank shall not be liable for any loss, claim or liability, cost or expense
            arising from: (a) any of the foregoing; (b) failure of any internet service
            provider to provide its services; (c) failure of communications media, legal
            restrictions; (d) act of God, fire or other catastrophe, computer failure or
            any other cause or circumstance beyond the Bank’s control; (e) any
            unauthorized person’s use of or access to the Web Site; or (f) failure of
            Applicant to report errors or defects promptly. (B) Electronic Systems.
            Applicant may desire to transmit and receive by means of facsimile, open
            internet communication, or other unguarded electronic communications
            (hereinafter collectively the “electronic systems”) Applications and
            other paper-writings to or from the Bank. To induce the Bank to accept
            communication via electronic systems, Applicant shall: i) ensure that its
            officers, agents and employees, will at all times follow and maintain the
            integrity of any security established by the Applicant and the Bank; ii)
            immediately notify the Bank in the event that Applicant should have reason to
            believe that the security established for electronic systems transmission has
            been breached or compromised in any manner; iii) ensure that only authorized
            personnel selected and controlled by the Applicant request action(s) by
            transmittal of document(s) by electronic systems; iv) ensure that any documents
            transmitted to the Bank by means of electronic systems shall be a complete and
            accurate copy and if signed be executed by personnel authorized by the
            Applicant; and v) maintain its software and equipment and any privacy control
            device within such software or equipment without any reliance on or
            responsibility
       

       
            Page 8 of 11
       

       
       
            by the Bank. The Applicant acknowledges and agrees that the Bank shall:
            i) not be responsible to the Applicant for any loss or damage arising from the
            use of unguarded electronic systems, including access or misuse of
            Applicant’s confidential information, transmission of a virus, or failed,
            incomplete or inaccurate transmission; ii) not be responsible to assure that,
            its software and equipment for receiving messages or documents from electronic
            systems will be compatible with that of Applicant or available at all times for
            Applicant’s use; iii) have absolute discretion but without liability, for
            any reason whatsoever, not to act upon documentation received by electronic
            systems; provided, however, that the Bank shall notify the undersigned promptly
            should it elect to defer action until the original documentation is physically
            presented to the Bank; iv) without any liability on its part to do so, have the
            right at its discretion to make further inquiries and demand further
            verification to determine the validity of any document prior to taking any
            action; and v) have the right to assume that any reproduction of documentation
            received by electronic systems constitutes a full, complete and accurate
            reproduction of the original documentation and that all signatures are
            authorized and genuine. (C) Indemnity. Separate and independent from any
            other indemnity set forth in this Agreement, the Applicant hereby indemnifies
            and holds the Bank harmless against any and all loss, liability, damage or
            expenses of whatever kind and nature arising from Bank’s acceptance and/or
            delivery of information and Applications over its Web Site or by electronic
            systems.
       

       
            13.  Two Parties Signing Agreement.  (A) 
            Co-Applicants. If the Agreement is signed by two or more Applicants, it
            shall be the joint and several obligation of each. Bank shall designate
            ________ in the Credit as account party and ________ as Applicant, who without
            joinder of the account party shall have the exclusive right to issue all
            instructions on any matters relating to the Credit. If the foregoing
            information is left blank or incomplete, the Bank at its discretion may accept
            an Application, or seek instruction, from any Applicant regarding a Credit,
            including, without limitation, any amendment thereto or waiver of any
            discrepancy thereunder, and until Bank at the office at which the relevant
            Credit is issued actually receives written notice of revocation, each Applicant
            shall be bound by and hereby affirms the instructions of the other. (B)
            Financial Institution as Customer. If the Agreement is signed as
            Applicant or co-Applicant by a bank, trust company or other financial
            institution for its customer, such Applicant appoints Bank as its agent to
            issue the Credit. Such Applicant and its customer agree to act in accordance
            with and be subject to the Agreement. If such Applicant is required (i) to
            reimburse Bank; (ii) to pay Bank in the Event of Default; (iii) to indemnify
            Bank; or (iv) to provide collateral, then its customer agrees to reimburse, pay
            or indemnify Applicant for the full amount of those payments and to provide the
            requisite collateral. In addition, the customer agrees to obtain such
            Applicant's consent before agreeing to waive any discrepancy in the documents
            related to the Credit or to waive or amend any terms of the Agreement or the
            Credit.
       

       
            14.  Event of Default.  On and after any Event
            of Default: (A) the amount of the Credit, as well as any other Obligations,
            shall, at Bank's option, become due and payable immediately without demand or
            notice to Applicant or if contingent, may be treated by Bank as due and payable
            for its maximum face amount; (B) Bank may set off and apply any deposits or any
            other indebtedness at any time owing by Bank to or for Applicant’s credit
            or account against any matured or unmatured Obligations, irrespective of
            whether or not Bank shall have made any demand under the Agreement and although
            such deposits, indebtedness or Obligations may be unmatured or contingent; (C)
            Bank may exercise all rights and remedies available to it in law or equity; and
            (D) in respect of any Collateral, Bank may exercise all the rights and remedies
            of a secured party under the Uniform Commercial Code or any other applicable
            law and also may, without notice except as required by law, sell such Property
            or any part thereof in one or more parcels at public or private sale, for cash,
            on credit or for future delivery, and on such other terms as Bank may deem
            commercially reasonable. Written notice mailed or delivered to Applicant at the
            address specified in the Agreement at least five business days prior to the
            date of public sale or prior to the date after which private sale is to be made
            shall be reasonable, adequate notice. Applicant will pay on demand all costs
            and expenses (including reasonable attorneys fees and legal expenses, incurred
            prior to or after a bankruptcy filing) related to the custody, preservation or
            sale of, or collection from, or realization upon, any of the Collateral and
            related to the collections of the Obligations and the enforcement of Bank's
            rights against Collateral. In the event of sale of or collection from the
            Collateral, Bank may in its discretion hold the proceeds as Collateral or apply
            the proceeds as Bank deems appropriate to the payment of costs and expenses or
            to one or more of the Obligations, whether or not then due.
       

       
            15.  Indemnification.  Applicant will
            indemnify and hold harmless Bank and its officers, directors, affiliates,
            employees, attorneys and agents (each, an “Indemnified Party”) from
            and against any and all claims, liabilities, losses, damages, costs and
            expenses (including reasonable attorneys’ fees and disbursements and other
            dispute resolution expenses (including fees and expenses in preparation for a
            defense of any investigation, litigation or proceeding) and costs of
            collection) that arise out of or in connection with: (A) the Credit or any
            pre-advice of its issuance; (B) any payment or action taken or omitted to be
            taken in connection with the Credit or this Agreement (including any action or
            proceeding to (i) restrain any presentation, (ii) compel or restrain any
            payment or the taking of any other action under the Credit, (iii) obtain
            damages for wrongful dishonor or honor of the Credit or for breach of any other
            duty arising out of or related to the Credit, (iv) compel or restrain the
            taking of any action under this Agreement or (v) obtain similar relief
            (including by way of interpleader, declaratory judgment, attachment or
            otherwise), regardless of who the prevailing party is in any such action or
            proceeding; (C) any beneficiary requested to issue its own undertaking seeking
            to be reimbursed, indemnified or compensated or (D) any third party seeking to
            enforce the rights of an applicant, beneficiary, nominated person, transferee,
            assignee of letter of credit proceeds, or holder of an instrument or document;
            (E) the enforcement of this Agreement or any rights or remedies under or in
            connection with this Agreement, the Collateral or the Credit; (F) the release
            by Applicant of any Credit to any third party prior to its issuance by the
            Bank; or (G) any act or omission, whether rightful or wrongful, of any present
            or future de jure or de facto government or governmental authority (including
            with respect to any document or property received under this Agreement or the
            Credit ) or any other cause beyond the Bank’s control, except to the
            extent such liability, loss, damage, cost or expense is found in a final,
            non-appealable judgment by a court of competent jurisdiction to have resulted
            directly from such Indemnified party’s gross negligence or willful
            misconduct. Applicant will pay on demand from time to time all amounts owing
            under this section. If and to the extent that the obligations of Applicant
            under this section are unenforceable for any reason, Applicant agrees to make
            the maximum contribution to the payment of such obligation that is permissible
            under applicable law.
       

       
            Page 9 of 11
       

       
       
            16.  Governing Law; UCP, ISP 98.  The UCP or
            ISP 98 as applicable to each Credit governs this Agreement and is incorporated
            herein. Subject to the other provisions of the Agreement, the Agreement shall
            be governed by and construed in accordance with the substantive laws of the
            Jurisdiction, without regard to conflicts of law principles, except to the
            extent that such law is inconsistent with the UCP or ISP 98, as applicable. In
            the event any provision of the UCP or ISP 98, as applicable, is or is construed
            to vary from or be in conflict with any provision of any applicable law of the
            Jurisdiction or the federal law of the United States, to the extent permitted
            by law, the UCP or the ISP 98, as applicable, shall govern or be read to
            explain the applicable law. Unless Applicant specifies otherwise in its
            application for the Credit, Applicant agrees that Bank may issue the Credit
            subject to the UCP or ISP 98 or, at Bank’s option, such later revision of
            either thereof as is in effect at the time of issuance of the Credit.
            Bank’s privileges, rights and remedies under the UCP, ISP 98 or such later
            revision shall be in addition to, and not in limitation of, its privileges,
            rights, and remedies expressly provided for herein. The UCP and ISP 98 shall
            serve, in the absence of proof to the contrary, as evidence of standard
            practice with respect to the subject matter thereof.
       

       
            17.  Savings Clause.  Whenever possible, each
            provision of the Agreement shall be interpreted in a manner as to be effective
            and valid under applicable law, but if any provision of the Agreement shall be
            prohibited by or invalid under applicable law, such provision shall be
            ineffective only to the extent of such prohibition or invalidity, without
            invalidating the remainder of such provision or the remaining provisions of the
            Agreement.
       

       
            18.  Bankruptcy and Forfeiture
            Reinstatement.  If any consideration transferred to Bank in
            payment of, or as collateral for, or in satisfaction of the Obligations, shall
            be voided in whole or in part as a result of (A) a subsequent bankruptcy or
            insolvency proceeding; (B) any forfeiture or in rem seizure action or remedy;
            (C) any fraudulent transfer or preference action or remedy; or (D) any other
            criminal or equitable proceeding or remedy, then Bank may at its option recover
            the Obligations or the consideration so voided from Applicant. In such event,
            Bank's claim to recover the voided consideration shall be a new and independent
            claim arising under the Agreement, and shall be jointly and severally due and
            payable immediately by Applicant.
       

       
            19.  Miscellaneous.  The rights and remedies
            granted to Bank in the Agreement are in addition to all other rights or
            remedies afforded to Bank under applicable law, equity or other agreements. The
            terms of the Agreement may not be waived or amended, unless the parties consent
            in writing. The Agreement shall be binding on Applicant’s heirs,
            executors, administrators, successors and permitted assigns, and shall inure to
            the benefit of Bank's successors and assigns. Bank can assign this Agreement
            and its rights to reimbursement regarding any Credit without Applicant’s
            consent. Applicant shall not assign any rights or remedies related to the
            Agreement or the Credit without written consent of the Bank. Any notice to
            Applicant, if mailed, shall be deemed given when mailed, postage paid,
            addressed to Applicant at the address on the Application or such other address
            furnished by Applicant to Bank. This Section shall not be deemed to be an
            exclusive list of each means of notice from one party to the other. The
            Agreement will continue in full force and effect until the expiration or
            cancellation of each Credit and all outstanding Obligations have been satisfied
            in a manner satisfactory to Bank, and Applicant requests termination in
            writing. Applicant will comply with all laws, regulations and customs now or
            hereafter applicable to the Agreement or to the transaction related to the
            Credit, and will furnish evidence of compliance as Bank may require. This
            Agreement contains the final, complete and exclusive understanding of, and
            supersedes all prior or contemporaneous, oral or written, agreements,
            understandings, representations and negotiations between, the parties relating
            to the subject matter of this Agreement.
       

       
            20.  Consent to Jurisdiction and Venue.  IN
            ANY PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER ARISING OUT OF OR
            RELATED TO THE AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER, APPLICANT
            IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL
            COURT LOCATED IN ANY COUNTY IN THE JURISDICTION AND AGREES NOT TO RAISE ANY
            OBJECTION TO THE JURISDICTION OR TO THE LAYING OR MAINTAINING OF THE VENUE OF
            ANY SUCH PROCEEDING IN THE JURISDICTION. APPLICANT AGREES THAT SERVICE OF
            PROCESS IN ANY SUCH PROCEEDING MAY BE DULY EFFECTED UPON IT BY MAILING A COPY
            THEREOF, BY REGISTERED MAIL, POSTAGE PREPAID, TO IT.
       

       
            21.  WAIVER OF JURY TRIAL.  TO THE EXTENT
            PERMITTED BY APPLICABLE LAW, APPLICANT AND WHEN IT ISSUES A CREDIT, BANK
            KNOWINGLY AND VOLUNTARILY WAIVE ALL RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY
            LITIGATION BASED ON, ARISING OUT OF, OR RELATING TO THE AGREEMENT OR THE
            CREDIT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (ORAL OR
            WRITTEN) OR ACTIONS OF ANY PARTY WITH RESPECT THERETO. THIS WAIVER IS A
            MATERIAL INDUCEMENT FOR BANK TO ISSUE THE CREDIT.
       

       
            Page 10 of 11
       

       
       
            22.  Effectiveness of Agreement.  Applicant
            agrees that the terms and conditions of this Continuing Letter of Credit
            Agreement shall be continuing and shall apply to any Credit currently, or in
            the future, issued by the Bank on Applicant’s behalf.
       

       
            Very truly yours,
       

       
       

       	 Millennium Cell Inc. 


 	Date:  November 8,
                   2002 
	
                   
                        By: /s/ Norman R. Harpster, Jr. 
Name: Norman R. Harpster, Jr.
                        
 Title: Vice President & Chief Financial Officer 
(Authorized
                        Signature and Title)
                   

              	


       
       

       
       

       
       

       
       

       
       

       
       

       
            Page 11 of 11