[EQUITEX, INC. LETTERHEAD]

                                                     July 6, 2005



Mr. James Matkin
Chairman
Hydrogen Power, Inc.
1942 Westlake Avenue
Suite 1010
Seattle, WA  98101


Dear Jim:

This Letter sets forth our mutual understanding and agreement in principle
pursuant to which Equitex, Inc., a Delaware corporation ("Equitex"), shall
acquire from Hydrogen Power, Inc. ("HPI," and referred to together with Equitex
as the "Companies"), a license to exploit all of HPI's intellectual property in
the United States and receive three separate options to acquire additional
intellectual property license rights for the exclusive license to South America,
the exclusive license to Mexico, and the non-exclusive license to Canada, as
well as the assets and liabilities of HPI (collectively, the "Transactions").

1. TERM SHEET. The Term Sheet attached as Exhibit A hereto (the "Term Sheet"),
outlines the major terms and conditions for the Transactions and will be binding
on the Companies, subject to execution of one or more definitive agreements
pursuant to the provisions of paragraph 4, in the manner described in paragraph
10 below.

2. CLOSING CONDITIONS. The consummation of the Transactions shall be subject to
the fulfillment of customary conditions, including the following conditions
precedent:

     (a) the negotiation and execution of a definitive agreement and other
     related agreements with respect to the Transactions;

     (b) the formal approval by the Board of Directors and, to the extent
     required, the stockholders of each of the Companies of the Transactions;
     and

     (c) the receipt of any required third-party, regulatory and governmental
     approvals.

3. CLOSING. It is anticipated that the consummation of the Transactions will
begin (as described in the Term Sheet) on or before such date as the parties may
agree, or such other date as the parties may agree.

4. DEFINITIVE AGREEMENTS. The definitive agreements with respect to the
Transactions will contain mutually agreeable representations and warranties,
mutually agreeable provisions for indemnification and other appropriate and
customary terms and conditions.

5. CONFIDENTIALITY. Except to the extent that information with respect to either
Company provided by it, or discovered by the other Company, is in the public
domain without breach of any obligation of confidentiality, such information
concerning each Company is hereinafter referred to as "Confidential

<PAGE>

Information." Prior to the consummation of the Transactions, neither Company
shall disclose Confidential Information of the other, except on a confidential
basis, to its respective employees, accountants, attorneys and other
professional advisors or as otherwise expressly provided herein, without the
prior written consent of the other Company. If at any time either Company is
requested or required (by oral questions, interrogatories, requests for
information or documents, subpoenas or similar legal process) to disclose any
Confidential Information of the other Company, it (to the extent reasonably
practical) shall promptly notify the Company so that such Company may seek an
appropriate protective order and/or waive compliance with the provisions hereof.
If, in the absence of a protective order or the receipt of a waiver hereunder,
in the reasonable opinion of counsel for either Company, such Company is
compelled to disclose Confidential Information of the other Company to any
tribunal or any governmental agency, it may disclose such information to such
tribunal or agency without liability hereunder.

6. EXPENSES. Except as may be otherwise provided in the definitive agreements,
the Companies shall each pay their respective expenses (including fees and
expenses of legal counsel) in connection with the Transactions.

7. PUBLIC DISCLOSURE. Subject to any applicable requirements of law, including
the Marketplace Rules of the Nasdaq Stock Market, neither of the Companies shall
make any public disclosure concerning the subject matter hereof or the
Transactions without the prior written consent of the other. The parties agree
to prepare a mutually acceptable press release or releases with respect to the
Transactions which will be released by the Companies on or about the date of the
execution of this Letter.

8. PREPARATION. Each of the Companies agrees to provide the other Company and
its advisors full access to its books, records and premises in order to enable
them to complete the Transactions. Subject to paragraph 10 below, each of the
Companies agrees to negotiate in good faith and cooperate with the other party
in connection with the preparation of definitive agreements, to use its
commercially reasonable efforts to complete such preparation and execute and
deliver definitive agreements as agreed and to close the first stage of the
Transactions (as outlined in the Term Sheet) as quickly as possible thereafter.
The parties further agree to cooperate in connection with the preparation of any
required governmental or regulatory filings.

9. TERMINATION. The obligations of the Companies under this Letter may be
terminated only by mutual agreement of the Companies, subject to their
respective reasonable satisfaction with ongoing due diligence of each other and
their businesses.

10. NATURE OF AGREEMENT. The specific terms of the Transactions contained in
paragraphs 1, 2, 5-7, and 9-12 of this Letter, and the specific terms of the
accompanying Term Sheet, shall be binding on the parties as they work together
in good faith in the preparation of definitive agreements for the Transaction.

11. LICENSE FEE. With respect to the $1 million license fee payment being wired
upon execution of this agreement, the Companies agree to reach agreement within
10 days from the execution hereof as to treatment of the license fee payment in
the event a definitive agreement is not executed or necessary stockholder
approval is not received.

                                       2
<PAGE>

12. GOVERNING LAW. This Letter shall be governed by, and construed in accordance
with, the laws of the State of Delaware applicable to contracts made and wholly
to be performed within such state and without regard to its conflicts-of-law
provisions.

If you are in agreement with the terms and conditions of this Letter, please
sign and date the enclosed duplicate of this Letter in the space provided below
and return it to the undersigned.


                                      Very truly yours,

                                      EQUITEX, INC.



                                      By:  /S/ HENRY FONG
                                         ---------------------------------------
                                         Name: Henry Fong
                                         Title: President/CEO


Accepted and agreed as of the day of July 6th, 2005:
                                          ---

HYDROGEN POWER, INC.



By:  /S/ JAMES MATKIN
   --------------------------------
Name:  JAMES MATKIN
      -----------------------------
Title:  CHAIRMAN
       ----------------------------


                                       3
<PAGE>
                                   TERM SHEET

This Term Sheet outlines the terms and conditions of a proposed agreement
between Hydrogen Power, Inc. ("HPI") and Equitex, Inc. ("Equitex") pursuant to
which Equitex will obtain a license to exploit HPI's intellectual property.

STRUCTURE                        Equitex and HPI shall enter into agreements
                                 whereby (i) Equitex shall purchase from HPI a
                                 license to exploit all of HPI's intellectual
                                 property (the "IP") in the United States, (ii)
                                 Equitex shall receive an option to purchase
                                 additional IP license rights for the exclusive
                                 license to South America, (iii) Equitex shall
                                 receive an option to purchase additional IP
                                 license rights for the exclusive license to
                                 Mexico, and (iv) Equitex shall receive an
                                 option to purchase IP license rights for the
                                 non-exclusive license to Canada, as well as the
                                 assets and liabilities of HPI. In addition,
                                 parties will enter into an agreement whereby
                                 HPI shall provide management services to
                                 develop and exploit the IP on behalf of
                                 Equitex. Agreements will be structured in the
                                 most tax advantageous manner as agreed to by
                                 the parties.

LICENSE AGREEMENT                Pursuant to a license agreement (the "License
                                 Agreement") between the parties, HPI will grant
                                 to Equitex a perpetual, fully-paid up license
                                 to exploit the IP in the United States in
                                 exchange for the issuance to HPI of Equitex
                                 common stock, in a private placement, in an
                                 amount equal to an aggregate of 40% of the
                                 outstanding common stock of Equitex (the "Share
                                 Issuance"); provided that, at the closing of
                                 the License Agreement (the "Closing"), Equitex
                                 will only be required to issue a number of
                                 shares of common stock equal to 19.99% of the
                                 outstanding common stock of Equitex (before
                                 giving effect to the issuance), and will issue
                                 the remaining shares upon obtaining shareholder
                                 approval for the Share Issuance.

EQUITEX OPTIONS                  Additionally, at Closing, HPI shall grant
                                 Equitex:

                                 (i)  an option to purchase a similar exclusive
                                      license to exploit the IP in South America
                                      (the "First Option"),

                                 (ii) an option to purchase a similar exclusive
                                      IP license to exploit the IP in Mexico
                                      (the "Second Option"); provided that, the
                                      Second Option will not vest in Equitex
                                      unless it exercises the First Option, and

                                 (iii) an option to purchase a similar
                                      non-exclusive IP license to exploit the IP
                                      in Canada, as well as to acquire all of
                                      the assets and liabilities of HPI (the
                                      "Third Option"); provided that, the Third
                                      Option will not vest in Equitex unless it
                                      exercises the Second Option.

                                 The First Option shall vest 180 days after
                                 Closing and be exercisable for a period of 90
                                 days thereafter. If Equitex exercises the First
                                 Option, on the date the license relating to
                                 South America is transferred to Equitex, it
                                 shall be required to issue HPI a number of
                                 shares of common stock equal to 40% of the then
                                 outstanding common stock of Equitex.
<PAGE>
EQUITEX OPTIONS (CONTINUED)      If Equitex exercises the First Option, the
                                 Second Option shall vest 270 days after Closing
                                 and be exercisable for a period of 90 days
                                 thereafter. If Equitex exercises the Second
                                 Option, on the date the license relating to
                                 Mexico are transferred to Equitex, it shall be
                                 required to issue to HPI a number of shares of
                                 common stock equal to 40% of the then
                                 outstanding common stock of Equitex.

                                 If Equitex exercises the Second Option, the
                                 Third Option shall vest 360 days after Closing
                                 and be exercisable for a period of 90 days
                                 thereafter. If Equitex exercises the Third
                                 Option, on the date the license relating to
                                 Canada, as well as the HPI assets are
                                 transferred to Equitex, it shall be required to
                                 issue to HPI a number of shares of common stock
                                 equal to 40% of the then outstanding common
                                 stock of Equitex.

CASH CONSIDERATION               As part of the above stock issuances, Equitex
                                 will pay a $3,000,000 license fee of which
                                 $1,000,000 will be paid upon the execution of a
                                 binding agreement in principle and term sheet.
                                 The balance of $2,000,000 shall be paid at the
                                 closing of a definitive agreement to occur
                                 within thirty days.

REGISTRATION RIGHTS              All shares of common stock issued to HPI
                                 stockholders will be registered at the earliest
                                 possible date under terms to be included in the
                                 initial agreement.

MONETIZATION OF FASTFUNDS        Equitex shall commence to monetize its
FINANCIAL HOLDINGS AND OTHER     7,700,000 shares of common stock of
FINANCING                        FastFunds Financial Corporation in accordance
                                 with applicable law. The use of $10 million of
                                 the proceeds from such monetization shall be
                                 used for the exploitation and commercialization
                                 of the IP with $5 million to be paid within 120
                                 days of the closing following execution of a
                                 definitive agreement.

                                 Additionally, Equitex shall use the proceeds
                                 from the exercise of all publicly held Equitex
                                 warrants for the exploitation and
                                 commercialization of the IP, subject to a
                                 reasonable amount of such proceeds, not to
                                 exceed 5% of the net proceeds, utilized for
                                 general corporate overhead purposes. These
                                 amounts will be provided to HPI as warrant
                                 exercises occur.

GOVERNANCE                       Additions to the Company's Board of Directors
                                 will be mutually agreed upon by the parties.

CONFIDENTIALITY                  This Term Sheet is confidential. Each party
                                 hereto agrees not to disclose to any third
                                 party the content or the existence of this Term
                                 Sheet or the negotiations contemplated hereby,
                                 except to the extent that such other party is
                                 necessary to such negotiations.