EXHIBIT 10.4


    
      
        
          

        

      

      EXHIBIT
        10.4

       

      HYDROGEN
        POWER, INC.

      1942
        Westlake Avenue, Suite 1010

      Seattle,
        WA 98101

       

       

      December
        29, 2006

    

    


    


    


    Henry
      Fong

    309
      Clematis Street, Suite 803

    West
      Palm
      Beach, FL 33401

    


    


    
      	 	
              Re:

            	
              Settlement
                of Obligations and Release by and between Hydrogen Power, Inc. (“HPI”) and
                Henry Fong, Gulfstream Financial Partners, LLC (“Gulfstream”), and Beacon
                Investments, Inc. (“Beacon”)

            


    

     

    Dear
      Henry:

     

    This
      letter reflects the understanding between you, Gulfsteam and Beacon, on one
      hand, and HPI, on the other hand, regarding the payment by HPI of its
      outstanding obligations to such parties. As of December 29, 2006, HPI
      acknowledges that it has debt obligations to you and Gulfstream and Beacon,
      two
      wholly owned affiliates of yours, in the aggregate amount of $653,500 in
      principal and interest (the “Obligations”). In full satisfaction of the
      Obligations, HPI has agreed to, on the date of your execution and delivery
      of
      this letter to HPI:

     

    1.  Issue
      and
      deliver to you 100,000 fully paid and non-assessable shares of HPI’s common
      stock (the “Shares”). HPI further agrees that it will register the resale of the
      Shares on the next registration statement (other
      than any registration on Form S-4, S-8 or any other similarly inappropriate
      form) that it files with the Securities and Exchange Commission; and 

     

    2.  Transfer
      to you, via wire transfer, $200,000.

     

    By
      execution of this letter below, upon receipt by you of the above-referenced
      payments and stock, you, Gulfstream and Beacon hereby:

     

    (i)
      agree
      that such payments and stock shall constitute payment in full of the Obligations
      as of the date of execution and delivery of the letter; 

     

    (ii)
      represent and warrant to HPI that there are no other liabilities on account
      of
      any indebtedness owed by HPI or its subsidiaries to you, Gulfstream and Beacon;
      and

     

    (iii)
      release HPI and its directors and officers from any and all claims, demands,
      actions, causes of action, suits, debts, damages, judgments, obligations,
      liabilities, costs, expenses, attorneys’ fees, and executions, whatsoever,
      whether known or unknown, asserted or unasserted, actual or potential,
      individual or joint, direct or indirect, fixed or contingent, in law or equity,
      of every kind and nature whatsoever, which you, Gulfstream or Beacon ever had,
      now has, or hereafter can, shall, or may have, or claim to have, against HPI
      or
      its officers and directors with respect to the Obligations. 

     

    Please
      acknowledge your agreement to the terms of this letter by signing below and
      returning a copy to HPI via facsimile at (206) 728-2423, with the original
      sent
      to: Hydrogen Power, Inc., 1942 Westlake Avenue, Suite 1010, Seattle, WA 98101,
      Attn: James Matkin. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Please
      contact me at (206) 448-5073 if you have any questions or comments relating
      to
      the terms of this letter.

     

    Hydrogen
      Power, Inc.

    


    


    By
/s/
      Russell Casement 

    Director

    


    Acknowledged
      and Agreed to:

     

    


     

    /s/
      Henry Fong       Date
      12/29/2006

    


    


    Gulfstream
      Financial Partners, LLC

    


    


    


    By
/s/
      Henry Fong      Date
      12/29/2006

    Its
      President

    


    


    Beacon
      Investments, LLC

    


    


    


    By
/s/
      Henry Fong      Date
      12/29/2006

    Its
      President