Millennium Cell and the Dow Chemical Company Announce Joint Development Program; Collaboration to Accelerate Commercialization of Portable Fuel Cell Systems

Business Wire, Feb 28, 2005

EATONTOWN, N.J. -- Millennium Cell Inc. (NASDAQ:MCEL) and The Dow Chemical Company (NYSE:DOW) today announced that they have entered into a joint development program to collaborate on the development and commercialization of portable fuel cell systems for use in consumer electronics and military applications. These energy systems will be based upon Millennium Cell's patented Hydrogen on Demand(R) technology in conjunction with Proton Exchange Membrane (PEM) fuel cells.

The demand for light-weight, long-lasting and cost-effective portable energy systems is growing rapidly. Hydrogen-based fuel cells offer the potential for longer runtimes, greater functionality and wireless convenience in consumer electronic applications such as laptop computers and cell phones. For military applications, they provide higher energy densities at dramatically lighter weight.

"We are pleased to form this strategic relationship with Dow to develop and commercialize our proprietary hydrogen energy systems," said H. David Ramm, Millennium Cell's Acting CEO and President. "The keys to unlocking longer run times and greater functionality are breakthroughs in new materials, chemistry and engineering. Dow brings a unique combination of these strengths, along with miniaturization, analytical sciences and operational excellence. This agreement with Dow enhances Millennium Cell's path to commercialization in 2005."

Dow sees significant opportunity within the $6 billion portable energy industry. "New sources of portable power are essential to supporting the next generation of consumer electronics," says Rob Spurling, Emerging Energy Platform Director of Dow Ventures, a business unit within Dow. "Millennium Cell has promising and unique technology. They have gone from concept to prototype demonstration in two key market segments - the military and consumer electronics. We believe that through our collaboration, we can accelerate the development and commercialization of the technology. This agreement reflects Dow's overall interest in developing a diverse Emerging Energy portfolio."

Millennium Cell and Dow have signed an agreement that defines a three-year, milestone-driven program. These milestones include securing developmental funding from both the military and a lead consumer electronics customer, and the development, manufacture and delivery of a prototype for military and consumer applications. Dow will provide a combination of business and technical resources to aid in the achievement of these milestones. As milestones are achieved, Dow will increase its resource commitment, as detailed in the definitive agreements signed by both companies.

Under the terms of the agreement, at the initial closing, Dow will receive a preferred equity interest equal to 3% of Millennium Cell on a fully diluted basis. Upon achievement of each of the milestones, Dow will become entitled to certain additional equity grants from Millennium Cell and will have the right to purchase additional equity in Millennium Cell through cash investments up to a total of $5 million. As a condition of the agreement and in compliance with NASDAQ market rules, Millennium Cell will ask its shareholders to approve the potential issuance of over 19.9% of the Company's currently outstanding shares to Dow at Millennium Cell's Annual Meeting on April 21, 2005.

Millennium Cell has today filed with the Securities and Exchange Commission a Current Report on Form 8-K that sets forth the terms and conditions of the agreements comprising the strategic relationship with Dow.

About Millennium Cell

Millennium Cell Inc. is engaged in the development of hydrogen energy systems for use primarily in portable electronics devices. Energy systems based on the Company's innovative and proprietary Hydrogen on Demand(R) technology safely generate high-quality hydrogen through the use of sodium borohydride. This chemical compound is non-combustible, high in energy density, easily distributed, and convenient for consumer use. Millennium Cell is developing technology in partnership with corporate and government entities. For more information, visit www.millenniumcell.com.

About Dow Ventures

Dow Ventures is a business unit of The Dow Chemical Company engaged in growing industries such as pharmaceutical and biopharmaceutical services, electronics, health care and emerging energy.

About The Dow Chemical Company

Dow is a leader in science and technology, providing innovative chemical, plastic and agricultural products and services to many essential consumer markets. With annual sales of $40 billion, Dow serves customers in 175 countries and a wide range of markets that are vital to human progress: food, transportation, health and medicine, personal and home care, and building and construction, among others. Committed to the principles of sustainable development, Dow and its 43,000 employees seek to balance economic, environmental and social responsibilities. References to "Dow" mean The Dow Chemical Company and its consolidated subsidiaries unless otherwise expressly noted. For further information, visit Dow's web site at www.dow.com.