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                                                                     Exhibit 4.7

                               SECURITY AGREEMENT

     THIS SECURITY  AGREEMENT (this  "Agreement") is made and entered into as of
June 10, 2003 by and among QT-5,  Inc., a Delaware  corporation  ("Debtor"),  in
favor of Dale Affonso ("Secured  Party"),  with reference to the following facts
and circumstances.

     A. Debtor is delivering a promissory note to Secured Party in the principal
amount of $50,000 (the "Secured Amount").

     B. In order to secure its obligations to repay the Secured  Amount,  Debtor
has agreed to grant Secured Party a security interest in certain collateral,  as
described herein.

     NOW,  THEREFORE,  IN  CONSIDERATION  of the  foregoing  and other  good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged, Debtor and Secured Party hereby agree as follows:

     1. GRANT OF SECURITY  INTEREST.  As security  for Debtor's due and punctual
performance of the Obligations (as hereinafter  defined),  Debtor hereby pledges
with Secured Party the Collateral (as hereinafter defined), and grants, assigns,
transfers and conveys to Secured Party a continuing security interest in any and
all of  Debtor's  right,  title  and  interest  in and to the  Collateral.  Such
security interest shall be second in priority to (and in certain  circumstances,
pari passu with) the  security  interest  granted in favor of NDMS  Investments,
L.P. and pari passu in priority with the security  interests granted in favor of
Devenshire Management Corp. and Alliance Financial Network, Inc.

     2. OBLIGATIONS. This Agreement, and Debtor's pledge of and grant to Secured
Party of a security  interest in and to the Collateral,  is made to secure:  (i)
due and punctual  performance of Debtor's obligation to repay the Secured Amount
pursuant  to a  Secured  Note of  even  date  herewith  and  any  other  note or
instrument executed by Debtor and payable to Secured Party which recites that it
is secured hereby,  including any and all amendments,  modifications,  renewals,
extensions,   substitutions  or  replacements   hereof  or  thereof;   (ii)  due
performance  of each and every  material  obligation,  covenant and agreement of
Debtor  contained  herein or in any other note or instrument  executed by Debtor
for the  purpose of further  securing  the  Secured  Amount  (collectively,  the
"Obligations").

     3. COLLATERAL. As used herein, the term "Collateral" shall collectively and
severally mean all assets of Debtor, including but not limited to the following:

           (a) EQUIPMENT.  All equipment (as defined in the  California  Uniform
Commercial Code (the "Code")), machinery, tools, furniture,  furnishings,  plant
fixtures, business fixtures and other storage and office equipment, now owned or
held,  or  hereafter  acquired by the Debtor,  wherever  located,  and all parts
thereof and all additions and accessions  thereto and  replacements  thereof and
documents  therefor,  including any documents of title  representing  any of the
above (any and all of the foregoing being the "Equipment");


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           (b)  INVENTORY.  All inventory (as defined in the Code) in all of its
forms, now owned or held, or hereafter acquired by the Debtor, wherever located,
including, but not limited to (i) all goods (wherever located and whether in the
possession of the Company or a bailee or other person for storage,  transit,  or
otherwise) manufactured or assembled or held for sale or lease or furnished, and
raw materials and work in process,  finished and unfinished goods, and materials
used or consumed in the Debtor's business,  (ii) all goods which are returned to
or repossessed by the Debtor, and (iii) all additions and accessions thereto and
replacements and products thereof, including,  without limitation, any documents
of title  representing  any of the above (any and all of the foregoing being the
"Inventory");

           (c)  ACCOUNTS.  All accounts,  chattel  paper,  instruments  (each as
defined in the Code),  and other  obligations  of any kind, now owned or held or
hereafter  acquired  by the Debtor,  including,  without  limitation,  insurance
claims insurance settlement proceeds,  tax refund claims and tax refunds arising
out of or in  connection  with the sale or  lease of goods or the  rendering  of
services,  and all rights in and to all security  agreements,  leases, and other
contracts  securing  or  otherwise  relating  to  any  such  accounts,   general
intangibles,  chattel  paper,  instruments  or  obligations,  and all  books and
records relating to any of the foregoing (any and all of the foregoing being the
"Accounts");

           (d) INSTRUMENTS.  All notes and other  instruments (as defined in the
Code) and any instrument  which  constitutes a part of chattel paper,  and other
evidences of indebtedness in which the Debtor now or hereafter has any interest,
to the extent of that interest;

           (e)  DOCUMENTS.  All  documents (as defined in the Code) in which the
Debtor now or hereafter has any interest, to the extent of that interest;

           (f)  CHATTEL  PAPER.  All  chattel  paper (as defined in the Code) in
which the Debtor now or hereafter has any interest;

           (g) GENERAL  INTANGIBLES.  All General  Intangibles  (as  hereinafter
defined) in which the Debtor now or hereafter has any interest, to the extent of
that  interest,  including,  without  limitation,  the Debtor's  interest in the
Patent  Assignment  between Debtor and Marshall  Thompson and the subject Patent
No.  6,268,386  (the  "Patent").   "General   Intangibles"  means  any  "general
intangibles" (as such term is defined in the Code),  and shall include,  without
limitation,  (i)  all  patents,  patent  applications,   trademarks,   trademark
registrations,  trade names and trademark applications;  (ii) license agreements
with any other  Parties,  whether the Debtor is a licensor or licenses under any
such license  agreement,  and the right to prepare for sale,  sell and advertise
for sale all inventory now or hereafter  covered by such licenses;  (iii) all of
the Debtor's books, records and files, including computer software and tapes and
all other forms of electronic  information  storage;  (iv)  copyrights and other
rights in intellectual property; (v) interests in partnerships,  joints ventures
and other business associations; (vi) licenses and permits; (vii) trade secrets,
propriety or confidential  information,  customer lists,  inventions (whether or
not  patented  or  patentable),  technical  information,   procedures,  designs,
knowledge,  know-how, software, data bases, data, skill, expertise,  experience,
processes,  models, drawings, materials and records, and goodwill; (viii) claims
in or under  insurance

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policies,  including  unearned  premiums;  (ix) deposit accounts;  (x) rights to
receive tax  refunds and other  payments;  (xi) rights of  indemnification;  and
(xii) all of the Debtor's rights under any warranties or guaranties of any kind,
including equipment, machinery or services;

           (h)  CONTRACTS.  All of the  Debtor's  rights  under  all  contracts,
undertakings  or  agreements  (other than  rights  evidenced  by chattel  paper,
documents or instruments) in or under which the Debtor may now or hereafter have
any right, title or interest,  including, without limitation, with respect to an
account,  any  agreement  relating  to the  terms  of  payment  or the  terms of
performance thereof;

           (i) INVESTMENT  PROPERTY.  All investment property (as defined in the
Code), in which Debtor now or hereafter has an interest or entitlement;

           (j) OTHER PERSONAL PROPERTY. All other goods and personal property in
which the Debtor has any interest,  to the extent of that interest,  whether now
or hereafter  owned or existing,  leased,  consigned by or to or acquired by the
Debtor and wherever located; and

           (k) PROCEEDS AND PRODUCTS. All proceeds and products of the foregoing
(including,  without  limitation,  cash proceeds and non-cash proceeds resulting
from the sale or other voluntary or involuntary disposition thereof or any other
realization in respect thereof) and including,  but not limited to, all property
of any  type  that is  acquired  with  any cash  proceeds,  and all  guarantees,
insurance  and  rights  against  sureties  the  Debtor  may  have in  connection
therewith and all proceeds and products  relating thereto or therefrom,  and all
the  Debtor's  right,  title  and  interest  in  and to  additions,  accessions,
replacements  and  substitutions  to and for the  foregoing,  and all documents,
ledger sheets and files of the Debtor relating  thereto.  The term "proceeds" as
used herein shall  include,  without  limitation,  all accounts,  chattel paper,
deposit  accounts,   instruments,   equipment,   inventory,  documents,  general
intangibles  and other  proceeds  that arise from the sale,  lease,  transfer or
other use or disposition  of any kind of any of the Collateral  described in the
foregoing paragraphs (a) through (j), inclusive,  or proceeds,  and all proceeds
of any type described above acquired with cash proceeds.

     4.  POWERS  OF  SECURED  PARTY.  Debtor  appoints  Secured  Party  its true
attorney-in-fact,  effective  upon any Event of  Default,  to perform any of the
following  powers,  which are coupled with an interest,  are  irrevocable  until
termination  of this Agreement and may be exercised from time to time by Secured
Party'  officers,  employees or agents,  or any of them:  (i) to  liquidate  any
certificate of deposit  pledged to Secured Party hereunder prior to its maturity
date and to apply the  proceeds  thereof to payment of the  Obligations  or hold
such  proceeds  as part of the  Collateral,  notwithstanding  the fact that such
liquidation may give rise to penalties for early  withdrawals of funds;  (ii) to
sell,  exchange or  otherwise  dispose of any portion of the  Collateral  and to
apply the proceeds  thereof to payment of the  Obligations;  (iii) to notify any
person  obligated on any security,  instrument or other document subject to this
Agreement  of  Secured  Party'  rights  hereunder;  (iv)  to  collect  by  legal
proceedings or otherwise all dividends, interest, principal or other sums now or
hereafter  payable upon or on account of the  Collateral;  (v) to enter into any
extension,  reorganization,  deposit, merger or consolidation  agreement,

                                       3

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or any other agreement relating to or affecting the Collateral or proceeds,  and
in  connection  therewith  to deposit or  surrender  control of the  Collateral,
accept other  property in exchange for the  Collateral,  and do and perform such
acts and  things as Secured  Party may deem  proper,  and any money or  property
received in exchange  for the  Collateral  shall be applied to the  Obligations;
(vi)  to make  any  compromise  or  settlement  Secured  Party  deem  necessary,
desirable or proper in respect of the Collateral;  (vii) to insure,  process and
preserve the  Collateral;  and (viii) to perform any  obligation of Debtor under
this Agreement, in Debtor's name or otherwise.

     5.  REPRESENTATIONS  AND  WARRANTIES.  Debtor  represents  and  warrants to
Secured Party as follows:

           (a) Debtor is a corporation,  duly organized, validly existing and in
good standing under the laws of the State of Delaware.

           (b) Debtor has all requisite  capacity and power to execute,  deliver
and perform its obligations  under this Agreement,  except that Debtor discloses
and  represents  that there is an existing  dispute  between Debtor and Marshall
Thompson,  the inventor and  proprietary  owner of that  certain  United  States
Patent No. 6,268,386 dated July 31, 2001 for Nicotine  Beverage and Debtor is in
the process of demanding  arbitration to resolve the dispute. This Agreement has
been  duly  authorized  by all  necessary  corporate  action,  has been  validly
executed  and  delivered  by Debtor,  constitutes  the legal,  valid and binding
obligation of Debtor,  enforceable in accordance  with its terms,  and creates a
legal, valid and enforceable security interest in and to the Collateral.

           (c) Except as otherwise set forth on Schedule  5(c),  Debtor owns the
Collateral free and clear of all liens, claims, encumbrances, security interests
or equities, other than the security interest created hereby.

           (d) Debtor's principal place of business is at the location set forth
in Section 14, and,  except as otherwise set forth on Schedule  5(d), all of the
Collateral  is  physically  located  in the  County  of Los  Angeles,  State  of
California.

           (e)  Debtor  has not sold,  transferred,  assigned  or  conveyed  the
Collateral, or any portion thereof, to any person other than Secured Party.

     6.  COVENANTS AND  AGREEMENTS OF DEBTOR.  Debtor  covenants and agrees with
Secured  Party that from the date hereof and until payment and  satisfaction  in
full of each and all of the  Obligations,  unless Secured Party shall  otherwise
consent in writing, which consent shall be granted or withheld in Secured Party'
sole and absolute discretion, Debtor will:

           (a) Duly  observe  and  perform  each  and  every  material  term and
condition of any and all agreements,  instruments and documents  relating to the
Collateral,  and  diligently  protect  and  enforce  its  rights  under all such
agreements.

           (b) Pay promptly  when due all taxes,  assessments  and  governmental
charges or levies  imposed upon the  Collateral  or in respect of the income and
profits

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<PAGE>

therefrom,  except  where  nonpayment  does  not  involve  any  danger  of sale,
forfeiture or loss of any of the Collateral or any interest therein.

           (c)  Insure  the  Collateral  with  financially  sound and  reputable
insurers  against loss or damage by fire,  theft,  bodily  injury and such other
casualties,  as are usually insured against by companies  engaged in the same or
similar businesses as Debtor.

           (d) Keep and  maintain at its own cost and expense  satisfactory  and
complete records of the Collateral, including without limitation a record of all
payments received and all credits granted with respect to the Collateral and all
other dealings in the  Collateral.  Upon the occurrence of any Event of Default,
Debtor  will  deliver  and turn over any such books and  records to the  Secured
Party at any time on demand of the Secured Party.  Prior to the occurrence of an
Event of Default  and upon  reasonable  written  notice of no less than five (5)
business  days from Secured  Party,  Debtor shall permit any  representative  of
Secured  Party to inspect  such books and records and will  provide  photocopies
thereof to Secured Party at Secured Party's  expense.  Upon  reasonable  written
notice of no less than five (5) business days to Debtor, with the consent of the
Debtor,  as to the  time of  entry,  which  consent  shall  not be  unreasonably
withheld,  Secured  Party  shall  also have the right to enter into and upon the
premises  where any of the  Equipment or Inventory is located for the purpose of
inspecting the same,  observing its use and otherwise protecting Secured Party's
interests therein.

           (e) Give Secured Party ten (10) days prior written  notice before (i)
changing  its  principal  place of business or moving its books and records to a
location  other  than that set forth in Section 14  hereof;  (ii)  changing  the
location of any  Equipment or Inventory,  or (iii)  changing the location of any
other  Collateral  to a place outside the State of  California;  and in any such
event taking such action as is  necessary to cause the security  interest in the
Collateral to continue to be perfected.

           (f) Not change  its name,  identity  or  corporate  structure  in any
manner  which  might  make any  financing  or  continuation  statement  filed in
connection with this Agreement misleading within the meaning of Section 9-402 of
the Code,  unless  Debtor shall have taken all action  necessary  or  reasonably
requested by Secured Party to amend such financing or continuation  statement so
that it is not seriously  misleading  and shall have  notified  Secured Party of
such action.

           (g) Not sell, lease, assign, transfer,  convey, pledge,  hypothecate,
mortgage or further  encumber any of the  Collateral,  provided that Debtor,  so
long as no Event of Default  shall have occurred and be  continuing,  may in the
ordinary  course of business  (i) sell  Inventory  and goods,  (ii)  collect and
settle Accounts and (iii) dispose of obsolete or non-serviceable  Equipment.  In
addition,  Debtor may grant  security  interests  in favor of NDMS  Investments,
L.P., Devenshire Management Corp. and Alliance Financial Network, Inc.

           (h)  Promptly  pay or  otherwise  cause to be  discharged  any  lien,
charge,   security  interest  or  other  encumbrance  that  may  attach  to  the
Collateral, or any portion thereof, other than pursuant to this Agreement.

                                       5

<PAGE>


           (i) Promptly  notify  Secured Party of any  attachment or other legal
process  levied  against  any of the  Collateral  and of  any  filed  claims  or
proceedings,  that might in any way  affect or impair  Secured  Party'  security
interest in the  Collateral  or the rights and  remedies  of Secured  Party with
respect thereto as noted in paragraph 5(b) above.

           (j)  Defend  the  Collateral  against  all  claims,  liens,  security
interests,  demands and other encumbrances of third parties at any time claiming
an interest in the Collateral  that is adverse to Secured Party' interest in the
Collateral hereunder.

           (k) At the written  request of Secured  Party and at Secured  Party's
expense,  execute and permit to be filed one or more financing  statements,  and
amendments  thereto,  under  the  Code,  any other  applicable  state's  Uniform
Commercial Code naming Debtor as debtor and Secured Party as secured Parties and
indicating therein the types or describing the Collateral.

           (l) Not,  without the prior written  consent of Secured Party,  which
consent shall not be unreasonably withheld, execute, file or authorize or permit
to be filed in any jurisdiction or with any governmental authority any financing
or similar  statement  relating to the Collateral,  or any portion  thereof,  in
which  any  person  other  than  Secured  Party is named  as a  secured  Parties
thereunder.

           (m)  Reimburse  Secured  Party  upon  demand  for any costs and fees,
including  reasonable  attorneys' fees and accountants' fees and other expenses,
incurred in collecting  any sums payable by Debtor under any of the  Obligations
secured  hereby,  enforcing any term or provision of this Agreement or otherwise
in the collection of the Collateral and the  preparation  and enforcement of any
agreement relating thereto.

           (n) Take any and all  actions  reasonably  requested  in  writing  by
Secured  Party to payoff those  certain  obligations  set forth on Schedule 5(c)
hereto, if any, including, but not limited to, the filing of one or more Uniform
Commercial Code termination statements or other applicable documents.

           (o)  Execute  and  deliver  to  Secured  Party  any and  all  further
agreements,  instruments,  or documents and take any and all such further action
as Secured  Party,  in its sole  discretion,  may deem necessary or advisable in
order to  evidence,  effectuate,  perfect,  protect,  maintain,  or realize upon
Secured  Party'  security  interest in the  Collateral  or the priority  thereof
including,  without  limitation,  any  documents  required  to be filed with the
United States Patent and Trademark Office.

     7. EVENTS OF DEFAULT.  The  occurrence  of an "Event of Default"  under the
Secured Note (after  expiration of any applicable cure periods) shall constitute
an "Event of Default" hereunder.

     8. SECURED PARTY' REMEDIES. If an Event of Default occurs hereunder,  then,
Secured Party may, at its option,  but is not required to, do any one or more of
the following without demand or notice to Debtor:

           (a) Declare  all of the  Obligations  immediately  due and payable in
full, notwithstanding the terms of any other writing or evidence of debt;

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<PAGE>

           (b) Transfer the Collateral into Secured Party' s name or that of its
nominee;

           (c)  From  time to time,  proceed  with the  foreclosure  of  Secured
Party's security  interest and sale of the Collateral,  or any portion of it, in
any manner permitted by law or provided for herein;

           (d) Take  possession of and retain the Collateral in  satisfaction of
the Obligations upon compliance with the provisions of the Code; or

           (e) Exercise any and all remedies of a secured Parties under the Code
or as otherwise provided by law.

     9.  APPLICATION  OF PROCEEDS.  After the occurrence of an Event of Default,
all income and  distributions  with respect to the  Collateral  and all proceeds
from any sale of the Collateral pursuant hereto shall be applied as follows:

           (a)  First,  in  such  order  as  Secured  Party  shall  in its  sole
discretion  determine,  (i) to the payment of all costs and expenses incurred by
Secured Party in connection with any sale of the Collateral,  including, without
limitation,  all court costs and the reasonable fees and expenses of counsel for
Secured  Party in  connection  therewith;  (ii) to the repayment of all advances
made by Secured Party hereunder for the account of Debtor; and (iii) the payment
of any and all other costs and  expenses  paid or  incurred by Secured  Party in
connection  with this Agreement or otherwise in connection  with the Obligations
or the exercise of any right or remedy hereunder;

           (b) Second, to the payment of interest on the Obligations;

           (c) Third, to the payment or satisfaction of the Obligations; and

           (d) Fourth,  any amounts  remaining after the foregoing  applications
shall  be  remitted  to  Debtor  or as a court  of  competent  jurisdiction  may
otherwise direct.

     10. power of attorney.

           (a) Debtor  does  hereby  irrevocably  make,  constitute  and appoint
Secured  Party  or any  of  its  officers  or  designees  its  true  and  lawful
attorney-in-fact  with  full  power  in the  name of  Secured  Party  or  Debtor
effective upon an Event of Default to endorse any notes,  checks,  drafts, money
orders or other  evidence of payment  relating to the  Collateral  that may come
into the possession of Secured Party, and to do any and all other acts necessary
or proper to carry out the intent of this Agreement;

           (b) Debtor does  hereby  further  irrevocably  make,  constitute  and
appoint  Secured  Party or any of its officers or designees  its true and lawful
attorney-in-fact  in the name of Secured Party or Debtor effective upon an Event
of  Default,  (i) to enforce  all  Debtor's  rights  under and  pursuant  to all
agreements  with  respect  to  the  Collateral  and to  enter  into  such  other
agreements as may be necessary to protect  Secured Party' rights and interest in
and to the Collateral; (ii) to execute such other and further mortgages, pledges
and  assignments of the  Collateral as Secured Party may reasonably  require for
the
                                       7

<PAGE>

purpose of protecting, maintaining or enforcing the security interest granted to
the Secured Party herein;  and (iii) to do any and all other things necessary or
proper to carry out the intention of this Agreement; and

           (c) Each of the foregoing  appointments  shall be deemed coupled with
an interest and irrevocable.

     11. PRIVATE SALE AUTHORIZED.

           (a) Debtor  recognizes  that Secured  Party may be unable to effect a
public sale of all or part of the Collateral.  Debtor consents to a private sale
even though such sale may be at prices and upon terms less favorable than if the
Collateral were sold at public sales.

           (b)  Debtor  recognizes  that  a  sale,  public  or  private,  of the
Collateral  may not be able to be effected and Secured Party or its assignee are
hereby  expressly  authorized at their election to retain the Collateral until a
sale can be effected.  Until such sale,  Secured Party or its assignee may elect
to hold the  Collateral  and be  treated  as the  owner  thereof,  and  shall be
entitled to collect all income thereon.

           (c) The  purchaser or purchasers at any public or private sale of the
Collateral  shall take the Collateral  free of any right or equity of redemption
in Debtor, which rights and equities Debtor hereby expressly waives.

           (d) Debtor  agrees that written  notice  mailed to Debtor twenty (20)
business  days  prior to the date of public or  private  sale of the  Collateral
shall constitute reasonable notice for such sales.

     12. FINANCING STATEMENTS AND PAYMENT DIRECTIONS. To the extent permitted by
law,  Debtor  hereby  authorizes  Secured  Party  to file any  amendments  to or
continuations  of any financing  statement  filed with regard to the  Collateral
without the signature of Debtor. Debtor further authorizes Secured Party upon an
Event of Default to notify any account  debtors  that all sums payable to Debtor
relating to the Collateral shall be paid directly to Secured Party.

     13.  TERMINATION.  UPON  SATISFACTION  in  full  of  each  and  all  of the
Obligations,  and the payment of all  additional  costs and  expenses of Secured
Party  provided for herein,  this  Agreement  shall  terminate and Secured Party
shall deliver to Debtor,  at Debtor's  expense,  such of the Collateral as shall
not  have  been  sold or  otherwise  disposed  of or  applied  pursuant  to this
Agreement;  provided  that if Secured  Party is  required  to return any amounts
received  by Secured  Party on account of the  Obligations,  the first  priority
security interests provided hereunder shall reattach.

     14. NOTICES.Any notice or other  communication  required or permitted to be
given  under  this  Agreement  shall be in  writing  and sent by  United  States
Overnight  Express Mail or priority Federal Express  delivery,  postage prepaid,
and addressed as follows:
                                       8

<PAGE>
              If to Debtor:          QT-5, Inc.
              ------------
                                     5655 Lindero Canyon Road , Suite 120
                                     Westlake Village, CA 91362
                                     Attention: Timothy J. Owens

              If to Secured Party:   Dale Affonso
                                     355 South Grand Ave.
                                     Suite 2000
                                     Los Angeles, CA 90071

 or such other address as either Parties may from time to time specify in
writing to the other in the manner aforesaid. If personally delivered, such
notices or other communications shall be deemed delivered upon delivery. If sent
by United States mail or Federal Express delivery, such notices or other
communications shall be deemed delivered upon delivery or refusal to accept
delivery as indicated on the delivery receipt.

     15.   SURVIVAL   OF   REPRESENTATIONS.   All   covenants,   agreements   or
representations  and  warranties  made  herein  and in any  documents  delivered
pursuant hereto shall survive the execution hereof.

     16. ASSIGNMENTS. Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
assigns of such Parties, and all covenants, promises and agreements by or on
behalf of Debtor contained in this Agreement shall bind and inure to the benefit
of the successors and assigns of Secured Party and Debtor.

     17.  GOVERNING LAW. This Agreement  shall be governed by, and construed and
enforced in accordance with, the laws of the State of California, without regard
to conflict of laws principles.

     18. NO IMPLIED WAIVERS BY SECURED PARTY.  Neither any failure nor any delay
on the part of  Secured  Party  in  exercising  any  right,  power or  privilege
hereunder  shall  operate  as a waiver  thereof,  nor shall a single or  partial
exercise  thereof  preclude  any other or further  exercise of any other  right,
power or  privilege.  The rights,  remedies and benefits of Secured Party herein
expressly  specified  are  cumulative  and not  exclusive  of any other  rights,
remedies or benefits that Secured  Party may have at law, in equity,  by statute
or otherwise.  Without  limiting the generality of the foregoing,  Secured Party
shall have all rights and  remedies of a secured  Party under  Division 9 of the
Code, as it may be amended or superseded from time to time.

     19. MODIFICATIONS AND WAIVERS.

           (a) No  modification,  amendment  or waiver of any  provision of this
Agreement,  nor consent to any departure of Debtor herefrom,  shall in any event
be  effective  unless the same shall be in writing and signed by Secured  Party,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given.

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           (b) No notice or demand on Debtor in any case shall entitle Debtor to
any  other  or  further  notice  or  demand  in  the  same,   similar  or  other
circumstances.

           (c) Debtor hereby waives presentment,  notice of dishonor and protest
of all instruments  included in or evidencing the liability of Debtor in respect
of the  Obligations  or the Collateral and any and all other notices and demands
whatsoever, whether or not relating to such instruments.

           (d) The  Obligations  shall not be  affected  by (i) the  failure  of
Secured  Party to assert any claim or demand or to  enforce  any right or remedy
against  Debtor;  (ii) any extension or renewal  thereof;  (iii) any rescission,
waiver,  amendment or  modification  of any of the terms or  provisions  of this
Agreement or of any other agreement;  or (iv) the release of any collateral held
by Secured Party for the Obligations or any of them.

     20.  SEVERABILITY.  In case any one or more of the provisions  contained in
this Agreement should be determined by a court of law to be invalid,  illegal or
unenforceable in any respect,  the validity,  legality and enforceability of the
remaining  provisions  contained  herein  shall  not in any way be  affected  or
impaired thereby.

     21. SUBMISSION TO JURISDICTION; SERVICE OF PROCESS. Debtor hereby:

           (a) irrevocably  submits to the jurisdiction of the state and federal
courts  sitting in the City of Los Angeles,  State of California for the purpose
of any  suit,  action or other  proceedings  arising  out of or based  upon this
Agreement  or the subject  matter  hereof  brought by any party  hereto or their
respective successors or assigns; and

           (b) waives, and agrees not to assert, by way of motion, as a defense,
or otherwise,  in any such suit, action or proceeding,  any claim that it is not
subject  personally  to the  jurisdiction  of the above named  courts,  that its
property is exempt or immune from attachment or execution, that the suit, action
or proceeding is brought in an inconvenient  forum,  that the venue of the suit,
action or  proceeding is improper or that this  Agreement or the subject  matter
hereof may not be enforced in or by such court.

           (c) waives any right to jury trial and any  offsets or  counterclaims
in any such action,  suit or proceeding  (other than compulsory  counterclaims);
and

           (d) consents to service of process by registered  mail at the address
to which notices are to be given.

     22. CAPTIONS.  The captions in this Agreement are inserted only as a matter
of  convenience  and for  reference  and shall not be deemed to  define,  limit,
enlarge,  or describe  the scope of this  Agreement or the  relationship  of the
parties,  and  shall  not  affect  this  Agreement  or the  construction  of any
provisions herein.

     23. PRONOUNS. Whenever the context so requires, the masculine shall include
the feminine  and the neuter,  and the singular  shall  include the plural,  and
conversely.

     24.   COUNTERPARTS.   This  Agreement  may  be  executed  in  two  or  more
counterparts,  each of which shall be deemed an original, but all of which shall
together  constitute one and the same instrument.  The facsimile of the executed
counterpart  shall  have the same  force and  effect as if it was an  originally
executed counterpart.

                                       10

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         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

                                      QT-5, INC.,
                                      a Delaware corporation



                                      By:   /s/ Steve Reder
                                      ----------------------------------
                                            Steve Reder
                                            President, Director


                                      By:   /s/ Timothy Owens
                                      ----------------------------------
                                            Tim Owens
                                            Chief Executive Officer, Director



Acknowledged and agreed by
Secured Party:



By   /s/ Dale Affonso
    -------------------------------
         Dale Affonso

                                       11
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                                  Schedule 5(c)

                                      NONE


                                       12

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                                  Schedule 5(d)

                                      NONE




                                       13

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                                    EXHIBIT A

                                 PATENT MORTGAGE


                                       14

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