Document:

EXHIBIT 10.3

                               SECURITY AGREEMENT

      THIS SECURITY AGREEMENT (this "Agreement") is made as of September 16,
2005, by and between Hydrogen Power, Inc., a Delaware corporation ("Debtor"),
and Equitex, Inc., a Delaware corporation ("Secured Party").

                                    RECITALS

      A. Debtor, Secured Party and EI Acquisition Corp., a wholly owned
subsidiary of Secured Party ("EI"), entered into that certain Merger Agreement
dated of even date herewith (the "Merger Agreement") pursuant to which Secured
Party agreed to loan HPI $3,000,000 (the "Loan").

      B. Pursuant to the terms of the Merger Agreement, in consideration of the
Loan, Debtor issued to Secured Party on even date herewith a convertible
promissory note in the principal amount of $3,000,000 (the "Note"), Debtor's
payment of which is to be secured pursuant to the terms herein.

      C. Unless otherwise defined herein or unless the context otherwise
requires, terms used in this Agreement, including its preamble and recitals,
have the meanings provided in the Uniform Commercial Code in effect in the State
of Delaware (the "UCC").

      NOW, THEREFORE, in consideration of the agreements herein and in reliance
upon the representations and warranties set forth herein and therein, the
parties agree as follows:

      1. To secure the timely payment and performance in full of all of Debtor's
obligations under this Agreement and the Note (collectively the "Loan
Documents"; such payment and performance obligations shall hereinafter be
collectively referred to as the "Obligations"), Debtor hereby grants to Secured
Party, subject to no other secured rights, a security interest (the "Security
Interest") in the property of Debtor identified on Exhibit A hereto, whether now
owned or later acquired or created, and including all proceeds therefrom,
whether cash or non-cash (collectively, the "Collateral").

      2. Debtor represents, warrants and agrees that:

            (a) Debtor has (or will have at the time it acquires rights in
      Collateral hereafter arising) and will maintain so long as the Security
      Interest may remain outstanding, absolute title to each item of Collateral
      and all proceeds thereof, free and clear of all interests, liens,
      attachments, encumbrances and security interests except the Security
      Interest as provided herein. Debtor will defend the Collateral against all
      claims or demands of all persons (other than the Secured Party) claiming
      the Collateral or any interest therein, Debtor will not sell or otherwise
      dispose of the Collateral or any interest therein except for the sale of
      Inventory in the normal course of Debtor's business, without the Secured
      Party's prior written consent.

            (b) Debtor does business solely under its own name and the trade
      names (if any) set forth below (or if none are listed, Debtor warrants
      that it does not have any trade names). The sole place of business and
      chief executive office of Debtor is located at the address set forth in
      Paragraph 8 below and all of Debtor's records relating to its business or
      the Collateral are kept at that location. Debtor will not permit any
      tangible Collateral or any records pertaining to Collateral to be located
      in any state or area in which, in the event of such location, a financing
      statement covering such Collateral would be required to be, but has not in
      fact been, filed in order to perfect the Security Interest. Debtor will
      not change its name or the location of its place of business, without
      prior written notice to the Secured Party.
<PAGE>

            (c) None of the Collateral is or will become a fixture on real
      estate, unless a sufficient fixture filing is in effect with respect
      thereto.

            (d) Each right to payment and each instrument, document, chattel
      paper and other agreement constituting or evidencing Collateral is (or, in
      the case of all future Collateral, will be when arising or issued) the
      valid, genuine and legally enforceable obligation, subject to no defense,
      setoff or counterclaim, of the account debtor or other obligor named
      therein or in Debtor's records pertaining thereto as being obligated to
      pay such obligation. Debtor will not agree to modify, amend, subordinate,
      cancel or terminate the obligation of any such account debtor or other
      obligor, without the Secured Party's prior written consent.

            (e) Debtor will keep all tangible Collateral in good repair, working
      order and condition, normal depreciation excepted.

            (f) Debtor will promptly pay all taxes and other governmental
      charges levied or assessed upon or against any Collateral or upon or
      against the creation, perfection or continuance of the Security Interest.

            (g) Debtor will keep all Collateral free and clear of all security
      interests, liens and encumbrances except the Security Interest provided
      herein and except other security interests approved in writing by the
      Secured Party.

            (h) Debtor will at all reasonable times permit the Secured Party or
      its representatives to examine or inspect any Collateral, or any evidence
      of Collateral, wherever located, and Debtor will at any time and from time
      to time send requests for verification of accounts or notices of
      assignment to account debtors and other obligors.

            (i) Debtor will keep accurate and complete records pertaining to the
      Collateral and pertaining to Debtor's business and financial condition,
      prepared on the basis of generally accepted accounting principles
      consistently applied; will submit to the Secured Party such monthly and
      other periodic reports concerning the Collateral and Debtor's business and
      financial condition as the Secured Party may from time to time request;
      and will permit the Secured Party, or its employees, accountants,
      attorneys or agents, to examine and copy any or all of its records at any
      time during Debtor's business hours.

            (j) Debtor will promptly notify the Secured Party of any loss of or
      material damage to any Collateral or of any substantial adverse change,
      known to Debtor, in any Collateral or the prospect of payment thereof.

            (k) Upon request by the Secured Party, whether such request is made
      before or after the occurrence of an Event of Default (as defined in
      Paragraph 9 hereof), Debtor will promptly deliver to the Secured Party in
      pledge all instruments, documents and chattel papers constituting
      Collateral, duly endorsed or assigned by Debtor.

            (l) Debtor will at all times keep its business all tangible
      Collateral insured against risks of fire (including so-called extended
      coverage), theft, collision (for Collateral consisting of motor vehicles)
      and such other risks and in such amounts as the Secured Party may
      reasonably request, with a Secured Party's loss payee endorsement to the
      Secured Party to the extent of its interest.

                                       2
<PAGE>

            (m) Debtor will pay or reimburse the Secured Party on demand for all
      costs of collection of any of the Obligations and all other out-of-pocket
      expenses (including in each case all reasonable attorneys' fees and legal
      expenses) incurred by the Secured Party in connection with the creation,
      perfection, protection, satisfaction, foreclosure or enforcement of the
      Security Interest or the creation, continuance or enforcement of this
      Agreement or any or all of the Obligations.

            (n) Debtor will use and keep the Collateral, and will require that
      others use and keep the Collateral, only for lawful purposes, without
      violation of any federal, state or local law, statute or ordinance.

            (o) Debtor represents and warrants that each item of tangible
      Collateral is currently located in the state of Washington unless another
      location has been disclosed to the Secured Party. Debtor agrees to provide
      the Secured Party with an updated list of each item of such Collateral
      upon request by the Secured Party. Debtor agrees to notify the Secured
      Party in writing before it changes the location of its chief executive
      office or the place where it keeps its books and records. The Debtor
      agrees not to remove any such Collateral from the states where it is
      currently located for more than sixty (60) days without the Secured
      Party's prior written consent and until all necessary filings have been
      made and other actions taken to continue the perfection of the Secured
      Party's Security Interest in such new location. The Secured Party's
      Security Interest attaches to all the Collateral wherever located, and the
      failure of Debtor to inform the Secured Party of the location of any item
      or items of Collateral shall not impair the Secured Party's Security
      Interest therein.

            (p) Debtor from time to time will execute and deliver or endorse any
      and all instruments, documents, conveyances, assignments, security
      agreements, financing statements and other agreements and writings which
      the Secured Party may reasonably request in order to secure, protect,
      perfect or enforce the Security Interest or the rights of the Secured
      Party under this Agreement (but any failure to request or assure that
      Debtor executes, delivers or endorses any such item shall not affect or
      impair the validity, sufficiency or enforceability of this Agreement and
      the Security Interest, regardless of whether any such item was or was not
      executed, delivered or endorsed in a similar context or on a prior
      occasion).

            (q) At such times as the Secured Party may require, the Debtor shall
      furnish to the Secured Party any records/information Secured Party might
      require. At reasonable times, the Secured Party may examine the Collateral
      and the Debtor's records pertaining to it, wherever located, and make
      copies of such records and the Debtor will assist the Secured Party in
      doing so.

            (r) Debtor shall provide Secured Party with monthly and annual
      financial statements including balance sheet and income statements and
      such other financial and business information as the Secured Party may
      reasonably request from time to time.

      If Debtor at any time fails to perform or observe any of the foregoing
agreements, and if such failure shall continue for a period of fifteen (15)
calendar days after the Secured Party gives Debtor written notice thereof (or in
the case of the agreements contained in clauses (g) and (1) above, immediately
upon the occurrence of such failure, without notice or lapse of time), the
Secured Party may, but need not, perform or observe such agreement on behalf and
in the name, place and stead of Debtor (or, at the Secured Party's option, in
the Secured Party's name) and may, but need not, take any and all other actions
which the Secured Party may reasonably deem necessary to cure or correct such
failure (including, without limitation, the payment of taxes, the satisfaction
of security interests, liens or encumbrances, the performance of obligations
owed to account debtors or other obligors, the procurement and maintenance of
insurance, the execution of assignments, security agreements and financing
statements, and the endorsement of instruments); and Debtor shall thereupon pay
to the Secured Party on demand the amount of all monies expended and all costs
and expenses (including reasonable attorneys' fees and legal expenses) incurred
by the Secured Party in connection with or as a result of the performance or
observance of such agreements or the taking of such action by the Secured Party,
together with interest thereon from the date expended or incurred at the highest
lawful rate then applicable to any of the Obligations. To facilitate the
performance or observance by the Secured Party of such agreements to Debtor,
Debtor hereby irrevocably appoints the Secured Party, or the delegate of the
Secured Party, acting alone, as the attorney-in-fact of Debtor with the right
(but not the duty) from time to time to create, prepare, complete, execute,
deliver, endorse or file in the name and on behalf of Debtor any and all
instruments, documents, assignments, security agreements, financing statements,
applications for insurance and other agreements and writings required to be
obtained, executed, delivered or endorsed by Debtor under this Paragraph 2.

                                       3
<PAGE>

      3. With respect to any or all rights to payment constituting Collateral
the Secured Party may at any time (either before or after the occurrence of an
Event of Default) notify any account debtor or other person obligated to pay the
amount due that such right to payment has been assigned or transferred to the
Secured Party for security and shall be paid directly to the Secured Party.
Debtor will join in giving such notice, if the Secured Party so request. At any
time after Debtor or the Secured Party gives such notice to an account debtor or
other obligor, the Secured Party may, but need not, in the Secured Party's name
or in Debtor's name, (i) demand, sue for, collect or receive any money or
property at any time payable or receivable on account of, or securing, any such
right to payment, or grant any extension to, make any compromise or settlement
with or otherwise agree to waive, modify, amend or change the obligations
(including collateral obligations) of any such account debtor or other obligor;
and (ii) as agent and attorney-in-fact of Debtor notify the United States Postal
Service to change the address for delivery of Debtor's mail to any address
designated by the Secured Party and otherwise intercept, receive, open and
dispose of Debtor's mail, applying all Collateral as permitted under this
Agreement or the Loan Agreement and holding all other mail for Debtor's account
or forwarding such mail to Debtor's last known address.

      4. As additional security for the payment and performance of the
Obligations, Debtor hereby assigns to the Secured Party any and all monies
(including, without limitation, proceeds of insurance and refunds of unearned
premiums) due or to become due under, and all other rights of Debtor with
respect to, any and all policies of insurance now or at any time hereafter
covering the Collateral or any evidence thereof or any business records or
valuable papers pertaining thereto, and Debtor hereby directs the issuer of any
such policy to pay all such monies directly to the Secured Party, At any time,
whether before or after the occurrence of any Event of Default, the Secured
Party may (but need not), in the Secured Party's name or in Debtor's name,
execute and deliver proof of claim, receive all such monies, endorse checks and
other instruments representing payment of such monies, and adjust, litigate,
compromise or release any claim against the issuer of any such policy.

      5. Upon the occurrence of any Event of Default and at any time thereafter,
the Secured Party may exercise one or more of the following rights and remedies:
(i) declare all unmatured Obligations to be immediately due and payable, and the
same shall thereupon be immediately due and payable, without presentment or
other notice or demand (but the Secured Party expressly reserves the right to
demand payment of any Obligation payable on demand, at any time, whether or not
an Event of Default has occurred or is continuing); (ii) exercise and enforce
any and all rights and remedies available upon default to a Secured Party under
the Uniform Commercial Code, including, without limitation, the right to take
possession of Collateral, or any evidence thereof, proceeding without judicial
process or by judicial process (without a prior hearing or notice thereof, which
Debtor hereby expressly waives) and the right to sell, lease or otherwise
dispose of any or all of the Collateral, and in connection therewith Debtor will
on demand assemble the collateral and make it available to the Secured Party at
a place to be designated by the Secured Party which is reasonably convenient to
both parties, and the Secured Party shall have the right to take immediate
possession of the Collateral and may enter any of the premises of Debtor or
wherever the Collateral is located with or without process of law and to keep
and store the same on said premises until sold (and if said premises be the
property of Debtor, Debtor agrees not to charge the Secured Party or a purchaser
from the Secured Party for storage thereof for a period of at least 90 days). If
notice to Debtor of any intended disposition of Collateral or any other intended
action is required by law in a particular instance, such notice shall be deemed
commercially reasonable if given (in the manner specified in Paragraph 8) at
least ten (10) calendar days prior to the date of intended disposition or other
action; (iii) without notice or demand offset any indebtedness the Secured Party
or any of its participants, successors or assigns then owes to Debtor, whether
or not then due, against any Obligation then owed to the Secured Party or any of
its participants, successors or assigns by Debtor, whether or not then due; and
(iv) exercise or enforce any and all other rights or remedies available by law
or agreement against the Collateral, against Debtor, or against any other person
or property. The proceeds of all sales and collections will be applied first to
all reasonable expenses of retaking, holding, preparing for sale, selling and
the like, including attorneys' fees and legal expenses (whether or not suit is
commenced) including, without limitation, attorneys' fees and legal expenses
incurred in connection with any appeal of a lower court's order or judgment and
second to the payment (in whatever order the Secured Party elects) of all other
Obligations chargeable to Debtor in connection with the loan transactions with
Secured Party. Subject to the provisions of the Commercial Code, the Secured
Party will return any excess to the Debtor and the Debtor shall remain liable to
the Secured Party for any deficiency.

                                       4
<PAGE>

      6. This Agreement does not contemplate a sale of accounts, contract rights
or chattel paper, and, as provided by law, Debtor is entitled to any surplus and
shall remain liable for any deficiency. The Secured Party's duty of care with
respect to Collateral in its possession (as imposed by law) shall be deemed
fulfilled in the selection of the bailee or other third person, and the Secured
Party need not otherwise preserve, protect, insure or care for any Collateral.
The Secured Party shall not be obligated to preserve any rights Debtor may have
against prior parties, to realize on the Collateral at all or in any particular
manner in order or to apply any cash proceeds of the Collateral in any
particular order of application.

      7. This Agreement can be waived, modified, amended, terminated or
discharged, and the Security Interest can be released, only explicitly in a
writing signed by the Secured Party. A waiver so signed shall be effective only
in the specific instance and for the specific purpose given. Mere delay or
failure to act shall not preclude the exercise or enforcement of any rights or
remedies available to the Secured Party. All rights and remedies of the Secured
Party shall be cumulative and may be exercised singularly in any order or
sequence, or concurrently, at the Secured Party's option, and the exercise or
enforcement of any such right or remedy shall neither be a condition to nor bar
the exercise or enforcement of any other.

      8. Any communications, including notices and instructions, between the
parties hereto or notices provided herein to be given may be given to the
following addresses:

<TABLE>
<CAPTION>
        -------------------------------------------------- ---------------------------------------
        if to HPI, at:                                     with a copy to:
<S>                                                            <C>
           Hydrogen Power, Inc.                               Lang Michener LLP
           1942 Westlake Avenue, Suite 1010                   1500 Royal Centre, P.O. Box 11117
           Seattle, Washington 98101                          1055 West Georgia Street
           Facsimile:  (206) 728-2423                         Vancouver, British Columbia
           Attn:  James Matkin, Chairman                      V6E 4N7
                                                              Facsimile:  (604) 685-7084
                                                              Attn:  Michael Taylor

        -------------------------------------------------- ---------------------------------------
        if to the Secured Party, in care of:               with a copy to:

           Equitex, Inc.                                      Maslon Edelman Borman & Brand, LLP
           7315 East Peakview Avenue                          90 South Seventh Street, Suite 3300
           Englewood, Colorado  80111                         Minneapolis, Minnesota  55402
           Facsimile: (303) 796-9762                          Facsimile:  (612) 642-8358
           Attn:  Henry Fong, President                       Attn:  William M. Mower
        -------------------------------------------------- ---------------------------------------
</TABLE>

                                       5
<PAGE>

All notices or other communications required or permitted to be given hereunder
shall be in writing and shall be considered as properly given (a) on the date
received in person, (b) on the date received by overnight delivery service
(including Federal Express, UPS, ETA, Emery, DHL, AirBorne and other similar
overnight delivery services), (c) on the fourth business day following the date
mailed by first class United States mail, postage prepaid, registered or
certified with return receipt requested, (d) on the next business day after
being transmitted by telecopy or by other electronic means (including electronic
mail). Any party shall have the right to change its address for notice hereunder
to any other location within the continental United States by giving of notice
to the other parties in the manner set forth hereinabove.

      9. As used herein, the term "Event of Default" shall have the meanings
assigned to such term in the Note and any breach of this Agreement.

      10. This Agreement, and the Security Interest granted hereby, shall be
binding upon Debtor, its successors and assigns, and shall inure to the benefit
of and be enforceable by the Secured Party and each and all of its participants,
successors and assigns, and shall be effective when executed by Debtor and
delivered to the Secured Party whether or not this Agreement is executed by the
Secured Party. All rights and powers specifically conferred upon the Secured
Party may be transferred or delegated to any of the participants, successors or
assigns of the Secured Party. Except to the extent otherwise required by law,
this Agreement and the transaction evidenced hereby shall be governed by the
substantive laws of the state in which this Agreement is accepted by the Secured
Party. If any provision or application of this Agreement is held unlawful or
unenforceable in any respect, such illegality or unenforceability shall not
affect other provisions or applications which can be given effect, and this
Agreement shall be construed as if the unlawful or unenforceable provision or
application had never been contained herein or prescribed hereby. All
representations and warranties contained in this Agreement or in any other
agreement between Debtor and the Secured Party shall survive the execution,
delivery and performance of this Agreement and the creation and payment of the
Obligations. Debtor waives notice of the acceptance of this Agreement by the
Secured Party.

                             Signature Page Follows

                                       6
<PAGE>

      IN WITNESS WHEREOF, the undersigned have hereunto affixed their
signatures.

                                                     Secured Party:

HYDROGEN POWER, INC.                                 EQUITEX, INC.

By   James Matkin                                    By  Henry Fong
     ----------------------------------------           ------------------------
     Its Chairman                                        Its  President
         ------------------------------------                 ------------------

                                       7EXHIBIT 10.125

                                                           Dr. Bogdan C. Maglich
                                                                    Chairman/CEO

September 9, 2005

Mr. Vladimir Stanich
13140 Neddick Avenue
Poway, CA 92064

Dear Vladimir:

Please  accept  the  following  engagement  letter  related  to  your  providing
engineering  consulting and manufacturing  planning as an independent contractor
for a  period  of 3  months,  at  which  time  an  extended  appointment  may be
considered following a performance review.

Your engagement will be effective  August 15, 2005 under the following terms and
conditions:

      1.    a). Your tasks will focus on engineering and production planning, as
            well as contributing to the design and implementation of
            manufacturing operations; and

            b). You agree to deliver to management monthly written reports of
            your activities and performance of your duties; and

            c). You will serve as a consultant to the Management Committee of
            HiEnergy Technologies, Inc. and report directly to me.

      2.    You will be working no less than four (4) days per week.

      3.    In consideration of the services to be performed hereunder:

            a). You will be paid $3,500 per month in cash, to be paid in equal
            installments on a bi-weekly basis; and

            b). you will be paid $15,000 per month in deferred compensation
            which shall be paid in the form of marketable shares of common stock
            of the Company.

            The Company will make timely reimbursements for any pre-approved
            and/or programmed expenses that may be incurred by you.

      4.    In the event the Company files a registration statement on S-8, the
            Company will include any shares earned by you as compensation for
            services rendered hereunder and may at its option pay you with
            registered S-8 stock with value equivalent to the above stated
            compensation. In the event the Company pays you in advance for
            future services and if you were to voluntary resign or be fired for
            cause prior to providing said services, the pro-rata portion of time
            not worked would be refundable to the Company . In the event that
            the value of the stock falls between the date of receipt and the
            date you are able to liquidate such shares lawfully in the public
            market, the Company agrees to issue to you for no further
            consideration such additional number of shares as is equal to the
            dollar balance of compensation earned for which payment has not then
            been received directly or through the sale of stock (including any
            accrued interest hereunder).
<PAGE>

Mr. Vladimir Stanich
September 9, 2005
Page 2 of 2

      5.    You will preserve Company confidential information in accordance
            with established Company agreement on the proprietary policies and
            procedures, a copy of which has been provided to you and which
            represents an integral part of this Employment Letter Agreement.

The Company is herewith  obligated to meet the above terms and  conditions  upon
your  acceptance  of  the  engagement,   with  exception  to  any  equity  based
compensation,  the  issuance  of which  shall be subject to an  approval  by the
Company's Board of Directors.

This letter  shall be governed by the laws of the State of  California  (without
giving  effect to  internal  choice  of law  rules).  The  terms of this  letter
agreement  may be  modified  only by a  writing  signed  by both  parties.  Oral
modifications  are not  enforceable.  To the extent of any  inconsistency,  this
agreement shall supersede any previous agreement.

I hope you will find the creative climate of the company stimulating,  such that
your talents will manifest at their best.

Please confirm your acceptance of the offer by cosigning this letter below.

Sincerely,

HiEnergy Technologies, Inc. by

/s/ Bogdan C. Maglich

Dr. Bogdan C. Maglich
Chairman & CEO

In acceptance of the above terms:

/s/ Vladimir Stanich                        9-14-05
---------------------------                 --------------
Vladimir Stanich                            Date

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