EXHIBIT 10.2
SECURED CONVERTIBLE PROMISSORY NOTE
$3,000,000
September 16, 2005
FOR VALUE RECEIVED, the undersigned, HYDROGEN POWER, INC., a
Delaware
corporation (the "Maker"), hereby promises
to pay to the order of Equitex, Inc.,
a Delaware corporation, or its assigns (the
"Payee"), at such place as the Payee
may designate in writing, from time to time
in immediately available lawful
money of the United States of America, the
principal sum of Three Million
Dollars ($3,000,000), together with
interest from the date hereof on the unpaid
principal balance outstanding from time to
time at a rate equal to the Prime
Rate per annum for U.S. banks as published
in Money Rates Column of the Money
and Investing Section of The Wall Street
Journal from time to time. All
computations of interest shall be made on
the basis of a year of 365 or 366
days, as applicable, for the actual number
of days for which such interest is
payable.
1. Payment. Unless previously converted in
accordance with the terms of Section
2 herein, all outstanding principal and
accrued interest on this Note shall be
due and payable on September 16, 2008 (the
"Maturity Date"). Notwithstanding the
foregoing, unless the Payee elects to allow
the terms in Section 2 to govern
such event, in the event of a consolidation
or merger, sale of a majority of the
capital stock or sale of all or
substantially all of the assets of Maker arising
prior to the Maturity Date, the outstanding
principal and accrued interest on
this Note shall become immediately due and
payable on the date of such event.
2. Conversion. Subject to the provisions of
this Section 2, in the event of
termination of that certain Merger
Agreement dated of even date herewith (the
"Merger Agreement") by and among Maker,
Equitex, Inc. and EI Acquisition Corp.,
a wholly owned subsidiary of Equitex, Inc.,
the outstanding principal and
accrued interest on this Note shall
automatically and without any further action
by the parties convert into shares of the
most senior class and series of
capital stock of Maker outstanding on the
date of termination ("HPI Senior
Capital Stock"), to be converted at a
conversion rate of $3.00 per share (the
"Conversion Rate"). Notwithstanding the
foregoing, if such termination is by
Equitex, Inc. pursuant to Section 7.1(b) or
7.1(c) of the Merger Agreement, the
conversion shall be at the option of
Equitex, Inc., in its sole discretion, at
any time after such termination.
For purposes of this Note, the Conversion Rate shall be
adjusted
proportionally for any subsequent stock
dividend or split, stock combination or
other similar recapitalization,
reclassification or reorganization of or
affecting the HPI Senior Capital Stock.
Subject to Payee's rights pursuant to
Section 1 hereof, in case of any
consolidation or merger to which the Maker is a
party other than a merger or consolidation
in which the Maker is the continuing
corporation, or in case of any sale or
conveyance to another corporation of the
proper
