INVESTOR RIGHTS AGREEMENT

THIS INVESTOR RIGHTS AGREEMENT (this “ Agreement ”) is made as of the [__] day of [_____________], 2005 by and among Millennium Cell Inc., a Delaware corporation (the “ Company ”), and The Dow Chemical Company, a Delaware corporation (“ Investor ”).

WHEREAS , the Company and the Investor are parties to that certain Stock Purchase Agreement dated February 27, 2005 (the “ Purchase Agreement ”), pursuant to which, among other things, at the First Closing (as defined in the Purchase Agreement) the parties hereto are to enter into this Agreement; and

WHEREAS , the First Closing has occurred and, simultaneously therewith, the parties hereto are entering into this Agreement pursuant to the Purchase Agreement;

NOW, THEREFORE , in consideration of the mutual covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:

1.    Definitions .  For purposes of this Agreement:

1.1.    “ Affiliate ” means with respect to any individual, corporation, partnership, association, trust, or any other entity (in each case, a “ Person ”), any Person which, directly or indirectly, controls, is controlled by or is under common control with such Person, including, without limitation any general partner, officer or director of such Person; provided , however , that the Investor shall not be deemed an Affiliate of the Company.

1.2.    “ Board ” means the Board of Directors of the Company.

1.3.    “ Common Stock ” means the Company’s common stock, par value $0.001 per share.

1.4.    “Current Market Capitalization” means, as of any date, the product of (x) the number of shares of Common Stock outstanding (determined on a Fully Diluted Basis) multiplied by (y) the VWAP for the thirty (30)-trading day period immediately preceding such date.

1.5.    “ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

1.6.    “ Fully Diluted Basis ” means, as of any date, on a fully diluted basis, as if (i) all shares of Preferred Stock, evidences of indebtedness, shares or other securities convertible into or exchangeable for Common Stock had been fully converted into or exchanged for shares of Common Stock and (ii) any outstanding warrants, options or other rights to acquire shares of capital stock or convertible securities (the securities described in clauses (i) and (ii) being hereinafter referred to as “ Common Stock Equivalents ”) had been fully exercised (and the resulting securities fully converted into shares of Common Stock), but excluding any Common Stock Equivalents having an exercise, strike or conversion price in excess of the VWAP for the thirty (30) trading day period immediately preceding the date of such determination.

1.7.    “ GAAP ” means generally accepted accounting principles. 

1.8.    “ Initial Series A Liquidation Value ” has the meaning set forth in the Purchase Agreement.

1.9.    “ Initial Series B Liquidation Value ” has the meaning set forth in the Purchase Agreement.

1.10.    “ Joint Development Agreement ” means that Joint Development Agreement between Millennium Cell Inc. and The Dow Chemical Company entered into as of the date hereof.

1.11.    “ Minimum Series B Investment ” means, with respect to each Closing (as defined in the Purchase Agreement), the payment by the Investor to the Company of at least $1,250,000 in exchange for Series B Preferred Stock at such Closing, subject to the terms of the Purchase Agreement.

1.12.    “ New Securities ” means equity securities of the Company, whether now authorized or not, or rights, options, or warrants to purchase said equity securities, or securities of any type whatsoever that are, or may become, convertible into or exchangeable into or exercisable for said equity securities.

1.13.    “ Preferred Stock ” means the Series A Preferred Stock and Series B Preferred Stock.

1.14.    “ Put Period ” means that period of time from and after the date that the Investor has made the first Minimum Series B Investment under the Purchase Agreement and for so long as (i) the Investor holds 5% or more of the outstanding shares of Common Stock (determined on a Fully Diluted Basis) and (ii) the Investor has not terminated the Joint Development Agreement without Cause (as defined in the Joint Development Agreement) pursuant to Section 11.3 of the Joint Development Agreement.

1.15.    “ Put Triggering Event ” means the occurrence of any of the following: (i) the discontinuance of the Company’s development activities targeting sub-50 watt power systems; (ii) the incurrence by the Company of indebtedness for borrowed money (including, without limitation, debt hybrid instruments convertible into equity and similar financing arrangements and guaranties of the obligations of others) outstanding at any one time in excess of 50% of the Current Market Capitalization; (iii) the acquisition by the Company of assets, business operations or securities of a Person not engaged in the delivery of sub-50 watt power systems whereby the consideration paid in such acquisition is in excess of 50% of the Current Market Capitalization; or (iv) the sale, license or other transfer of exclusive rights to any of the Company’s intellectual property (including, without limitation, the MCEL Contributed Intellectual Property (as defined in the Joint Development Agreement) and the JDA Intellectual Property (as defined in the Joint Development Agreement) necessary for the Company’s use of sub-50 watt power systems.

1.16.     “ Series A Preferred Stock” means the Company’s Series A Convertible Preferred Stock, with the powers, preferences and special rights set forth in the Series A Certificate of Designation.

1.17.    “ Series B Preferred Stock ” means the Company’s Series B Convertible Preferred Stock, with the powers, preferences and special rights set forth in the Series B Certificate of Designation. 

1.18.    “ Trading Market ” means any of the New York Stock Exchange, the American Stock Exchange, the Nasdaq National Market or the Nasdaq Smallcap Market.

1.19.    “ Transaction Agreements ” means this Agreement, the Purchase Agreement, the Joint Development Agreement, the Cross Licensing Agreement, the Registration Rights Agreement, the Standstill Agreement, all MFN Licenses (as defined in the Cross Licensing Agreement, if any, the Patent Assignment Agreement and the Note).

1.20.    “ VWAP ” shall mean, with respect to any date on which a determination is required, (i) if the security is listed for trading on any Trading Market, a price, rounded to the nearest cent, equal to (A) the sum of the following product determined for each trading day in the specified number of consecutive trading days: (1) the last sale price of the security during normal business hours on a specific trading day as finally reported by the Trading Market, multiplied by (2) the number of shares of the security that were traded on such trading day on the Trading Market, divided by (B) the aggregate number of shares of the security that were traded on such trading days, and (ii) if the security is not listed for trading on any Trading Market on the date of such calculation (or on any trading day during the relevant number of trading days immediately preceding the date of such determination), the fair market value of the security determined pursuant to an appraisal process mutually satisfactory to the Company and the Investor.

1.21.    “ Warrant ” means any warrants convertible into shares of Common Stock issued to Investor by the Company pursuant to the Purchase Agreement.

2.    Information and Observer Rights .

2.1.    Delivery of Financial Statements . For so long as the Investor holds 5% or more of the outstanding shares of Common Stock (determined on a Fully Diluted Basis), t he Company shall deliver to the Investor:

(a)    as soon as practicable, but in any event within ninety (90) days after the end of each fiscal year of the Company, the Company’s audited balance sheet and income statement as of the last day of such year, a statement of cash flows for such year and a schedule as to the sources and applications of funds for such year, such year-end financial reports to be in reasonable detail, prepared in accordance with GAAP and a copy of the letter to management from the Company’s independent public accountants selected by the Board, unless such information is made publicly available by filing with the Securities and Exchange Commission on EDGAR;

(b)    as soon as practicable, but in any event within forty-five (45) days after the end of each of the first three (3) quarters of each fiscal year of the Company, an unaudited income statement, a schedule as to the sources and applications of funds for such fiscal quarter, an unaudited balance sheet, a statement of stockholder’s equity as of the end of such fiscal quarter;

(c)    as soon as practicable, but in any event promptly after the Board’s approval thereof, an annual budget and business plan for the next fiscal year (collectively, the “ Budget ”) prepared by the Company; and

(d)    simultaneously with the delivery thereof to the Company’s lenders and debt holders, such other information relating to the financial condition, business, prospects, operations or corporate affairs of the Company that the Company has delivered to its lenders and debt holders.

(e)    as soon as practicable, but in any event within forty-five (45) days after the end of each quarter of each fiscal year of the Company, a statement showing the number of shares of each class and series of capital stock and securities convertible into or exercisable for shares of capital stock outstanding at the end of the period, the number of common shares issuable upon conversion or exercise of any outstanding securities convertible or exercisable for common shares and the exchange ratio or exercise price applicable thereto and number of shares of issued stock and stock options not yet issued but reserved for issuance, if any, all in sufficient detail as to permit the Investor to calculate its percentage equity ownership in the Company and certified by the Chief Financial Officer or Chief Executive Officer of the Company as being true, complete and correct.

2.2.    Confidentiality . At such time as Investor holds 5% or more of the outstanding shares of Common Stock (determined on a Fully Diluted Basis), the Company and Investor shall enter into a mutually-satisfactory confidentiality agreement, which confidentiality agreement shall be sufficient to comply with requirements of Regulation FD under the Exchange Act and preserve the attorney-client privilege and work product privilege, if any, between the Company and its counsel and shall provide that Investor will cause the Investor Observer to comply with such confidentiality agreement.

2.3.    Inspection. The Company shall The Company shall permit the Investor, at the Investor’s expense, to visit and inspect the Company’s properties, to examine its books of accounts and financial records and to discuss the Company’s affairs, finances and accounts with its officers, all at such reasonable times during normal business hours as may be reasonably requested in advance by the Investor; provided, however, that the Company shall not be obligated pursuant to this Section 2.3 to provide access to any information which would adversely affect the attorney client privilege between the Company and its counsel or to provide access to documents or other information which is covered by confidentiality agreements..

2.4.    Observer Rights . For so long as the Investor holds 5% or more of the outstanding shares of Common Stock (determined on a Fully Diluted Basis), the Investor will have the right to designate one (1) natural Person to serve as an observer at meetings of the Board and all committees thereof (the “ Investor Observer ”). The initial Investor Observer shall be the Director of Natural Resources of the Investor; provided , however , the Investor shall have the right to replace the Person serving as Investor Observer from time to time at its sole discretion. The Company shall give the Investor Observer copies of all notices, minutes, consents and other materials that it provides to its directors at the same time and in the same manner as provided to its directors; provided however that the Company shall not be obligated to give the Investor Observer any documents if to do so would cause such document to not be subject to the attorney-client privilege or work product privilege. The Investor Observer shall treat and hold all such information received pursuant to this Section 2.3 in confidence in accordance with the confidentiality agreement contemplated by Section 2.2 hereof. The Company hereby agrees to indemnify and hold harmless the Investor Observer to the same extent and in the same manner as the Company indemnifies its non-empl