SECURITY AGREEMENT


          SECURITY AGREEMENT (this "Agreement"), dated as of August 12, 2004, by
and among QT 5,  Inc.,  a  Delaware  corporation  ("Company"),  and the  secured
parties signatory hereto and their respective endorsees, transferees and assigns
(collectively, the "Secured Party").

                              W I T N E S S E T H:

          WHEREAS,  pursuant to a Securities Purchase Agreement,  dated the date
hereof,  between  Company  and the  Secured  Party (the  "Purchase  Agreement"),
Company  has  agreed to issue to the  Secured  Party and the  Secured  Party has
agreed to purchase  from Company  certain of Company's  10% Secured  Convertible
Notes, due two years from the date of issue (the "Notes"), which are convertible
into shares of Company's  Common  Stock,  par value $.001 per share (the "Common
Stock"). In connection therewith,  Company shall issue the Secured Party certain
Common Stock purchase warrants (the "Warrants"); and

          WHEREAS,  in order to induce the Secured  Party to purchase the Notes,
Company has agreed to execute and  deliver to the Secured  Party this  Agreement
for the benefit of the Secured  Party and to grant to it a security  interest in
certain  property  of  Company to secure the  prompt  payment,  performance  and
discharge in full of all of Company's  obligations  under the Notes and exercise
and discharge in full of Company's obligations under the Warrants.

          NOW,  THEREFORE,  in consideration of the agreements  herein contained
and for other good and valuable  consideration,  the receipt and  sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:

          1.   Certain  Definitions.  As used in this  Agreement,  the following
terms shall have the  meanings  set forth in this  Section 1. Terms used but not
otherwise  defined in this  Agreement  that are  defined in Article 9 of the UCC
(such as  "general  intangibles"  and  "proceeds")  shall  have  the  respective
meanings given such terms in Article 9 of the UCC.

               (a)  "Collateral" means the collateral in which the Secured Party
is granted a security  interest by this  Agreement  and which shall  include the
following,  whether presently owned or existing or hereafter  acquired or coming
into existence,  and all additions and accessions  thereto and all substitutions
and  replacements  thereof,  and all  proceeds,  products and accounts  thereof,
including,  without  limitation,  all proceeds  from the sale or transfer of the
Collateral  and of  insurance  covering  the  same  and of any  tort  claims  in
connection therewith:

                    (i)  All   Goods   of  the   Company,   including,   without
                         limitations, all machinery, equipment, computers, motor
               vehicles,  trucks,  tanks, boats, ships,  appliances,  furniture,
               special and general  tools,  fixtures,  test and quality  control
               devices and other equipment of every kind and nature and wherever
               situated,  together  with all  documents  of title and  documents
               representing  the same,  all  additions and  accessions  thereto,
               replacements  therefor,  all parts therefor,  and all substitutes
               for any of the  foregoing  and all other items used and useful in
               connection  with the Company's  businesses  and all  improvements
               thereto (collectively, the "Equipment"); and



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                    (ii) All Inventory of the Company; and

                    (iii)All  of  the  Company's  contract  rights  and  general
               intangibles,   including,  without  limitation,  all  partnership
               interests, stock or other securities,  licenses, distribution and
               other agreements,  computer software development rights,  leases,
               franchises,  customer lists,  quality control procedures,  grants
               and rights,  goodwill,  trademarks,  service marks, trade styles,
               trade names, patents,  patent applications,  copyrights,  deposit
               accounts,  and income tax  refunds  (collectively,  the  "General
               Intangibles"); and

                    (iv) All Receivables of the Company  including all insurance
               proceeds,  and rights to refunds  or  indemnification  whatsoever
               owing,  together  with all  instruments,  all  documents of title
               representing   any  of  the   foregoing,   all   rights   in  any
               merchandising,  goods, equipment, motor vehicles and trucks which
               any of the same may represent, and all right, title, security and
               guaranties with respect to each  Receivable,  including any right
               of stoppage in transit; and

                    (v)  All of the Company's documents, instruments and chattel
               paper,  files,  records,  books  of  account,   business  papers,
               computer  programs  and the  products  and proceeds of all of the
               foregoing Collateral set forth in clauses (i)-(iv) above.

               (b)  "Company" shall mean,  collectively,  Company and all of the
subsidiaries  of Company,  a list of which is contained in Schedule A,  attached
hereto.

               (c)  "Obligations"  means all of the Company's  obligations under
this Agreement and the Notes, in each case,  whether now or hereafter  existing,
voluntary or involuntary, direct or indirect, absolute or contingent, liquidated
or  unliquidated,  whether or not jointly owed with  others,  and whether or not
from time to time  decreased or  extinguished  and later  decreased,  created or
incurred,  and all or any portion of such  obligations or  liabilities  that are
paid,  to the  extent all or any part of such  payment  is avoided or  recovered
directly  or  indirectly  from the  Secured  Party as a  preference,  fraudulent
transfer  or  otherwise  as  such  obligations  may  be  amended,  supplemented,
converted, extended or modified from time to time.

               (d)  "UCC" means the Uniform  Commercial  Code,  as  currently in
effect in the State of New York.

          2.   Grant of  Security  Interest.  As an  inducement  for the Secured
Party to  purchase  the Notes and to secure the  complete  and  timely  payment,
performance  and  discharge  in  full,  as  the  case  may  be,  of  all  of the
Obligations,  the Company  hereby,  unconditionally  and  irrevocably,  pledges,
grants and hypothecates to the Secured Party, a continuing security interest in,
a continuing  lien upon, an unqualified  right to possession and  disposition of
and a right of set-off against,  in each case to the fullest extent permitted by
law,  all of the  Company's  right,  title and interest of  whatsoever  kind and
nature in and to the Collateral (the "Security Interest").

          3.   Representations,  Warranties,  Covenants  and  Agreements  of the
Company.  The Company represents and warrants to, and covenants and agrees with,
the Secured Party as follows:


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               (a)  The Company has the requisite  corporate power and authority
to  enter  into  this  Agreement  and  otherwise  to carry  out its  obligations
thereunder.  The  execution,  delivery  and  performance  by the Company of this
Agreement and the filings  contemplated therein have been duly authorized by all
necessary action on the part of the Company and no further action is required by
the Company. This Agreement constitutes a legal, valid and binding obligation of
the Company  enforceable in accordance with its terms,  except as enforceability
may be limited by bankruptcy, insolvency, reorganization,  moratorium or similar
laws affecting the enforcement of creditor's rights generally.

               (b)  The Company  represents and warrants that it has no place of
business or offices where its  respective  books of account and records are kept
(other than  temporarily  at the offices of its  attorneys  or  accountants)  or
places where Collateral is stored or located,  except as set forth on Schedule A
attached hereto;

               (c)  Except as  disclosed  on Schedule A, the Company is the sole
owner of the  Collateral  (except  for  non-exclusive  licenses  granted  by the
Company  in the  ordinary  course of  business),  free and  clear of any  liens,
security interests,  encumbrances,  rights or claims, and is fully authorized to
grant the  Security  Interest in and to pledge the  Collateral.  There is not on
file in any governmental or regulatory authority,  agency or recording office an
effective financing  statement,  security agreement,  license or transfer or any
notice of any of the  foregoing  (other than those that have been filed in favor
of the Secured Party  pursuant to this  Agreement)  covering or affecting any of
the Collateral.  So long as this Agreement shall be in effect, the Company shall
not execute and shall not  knowingly  permit to be on file in any such office or
agency any such financing  statement or other document or instrument  (except to
the extent filed or recorded in favor of the Secured Party pursuant to the terms
of this Agreement).

               (d)  No  part  of the  Collateral  has  been  judged  invalid  or
unenforceable.  No written claim has been  received  that any  Collateral or the
Company's use of any  Collateral  violates the rights of any third party.  There
has been no adverse  decision to the Company's  claim of ownership  rights in or
exclusive  rights to use the Collateral in any  jurisdiction or to the Company's
right to keep and maintain such  Collateral in full force and effect,  and there
is no proceeding  involving said rights pending or, to the best knowledge of the
Company,   threatened  before  any  court,  judicial  body,   administrative  or
regulatory agency, arbitrator or other governmental authority.

               (e)  The Company shall at all times maintain its books of account
and records  relating to the  Collateral at its principal  place of business and
its Collateral at the locations set forth on Schedule A attached  hereto and may
not relocate such books of account and records or tangible  Collateral unless it
delivers  to the  Secured  Party at least 30 days prior to such  relocation  (i)
written notice of such  relocation  and the new location  thereof (which must be
within  the  United  States)  and  (ii)  evidence  that  appropriate   financing
statements and other necessary  documents have been filed and recorded and other
steps have been taken to perfect the Security Interest to create in favor of the
Secured Party valid, perfected and continuing liens in the Collateral.

               (f)  This Agreement creates in favor of the Secured Party a valid
security interest in the Collateral  securing the payment and performance of the
Obligations and, upon making the filings described in the immediately  following


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sentence,  a  perfected  security  interest in such  Collateral.  Except for the
filing of financing  statements  on Form-1 under the UCC with the  jurisdictions
indicated on Schedule B, attached  hereto,  no  authorization  or approval of or
filing  with or notice  to any  governmental  authority  or  regulatory  body is
required  either (i) for the grant by the Company of, or the  effectiveness  of,
the  Security  Interest  granted  hereby  or for  the  execution,  delivery  and
performance  of this  Agreement by the Company or (ii) for the  perfection of or
exercise by the Secured Party of its rights and remedies hereunder.

               (g)  On the date of execution of this Agreement, the Company will
deliver to the Secured Party one or more  executed UCC  financing  statements on
Form-1 with respect to the Security  Interest for filing with the  jurisdictions
indicated on Schedule B, attached hereto and in such other  jurisdictions as may
be requested by the Secured Party.

               (h)  The  execution,  delivery and  performance of this Agreement
does not  conflict  with or cause a breach or default,  or an event that with or
without the  passage of time or notice,  shall  constitute  a breach or default,
under any  agreement  to which the Company is a party or by which the Company is
bound.  No  consent  (including,  without  limitation,  from  stock  holders  or
creditors  of the Company) is required for the Company to enter into and perform
its obligations hereunder.

               (i)  The  Company  shall at all  times  maintain  the  liens  and
Security  Interest  provided  for  hereunder  as valid and  perfected  liens and
security  interests in the  Collateral  in favor of the Secured Party until this
Agreement  and the  Security  Interest  hereunder  shall  terminate  pursuant to
Section 11. The  Company  hereby  agrees to defend the same  against any and all
persons.  The Company shall safeguard and protect all Collateral for the account
of the Secured Party. At the request of the Secured Party, the Company will sign
and  deliver to the  Secured  Party at any time or from time to time one or more
financing  statements  pursuant to the UCC (or any other applicable  statute) in
form  reasonably  satisfactory  to the  Secured  Party  and will pay the cost of
filing the same in all public  offices  wherever  filing is, or is deemed by the
Secured Party to be, necessary or desirable to effect the rights and obligations
provided for herein.  Without  limiting the  generality  of the  foregoing,  the
Company shall pay all fees,  taxes and other  amounts  necessary to maintain the
Collateral and the Security Interest hereunder, and the Company shall obtain and
furnish to the  Secured  Party from time to time,  upon  demand,  such  releases
and/or  subordinations of claims and liens which may be required to maintain the
priority of the Security Interest hereunder.

               (j)  The  Company  will  not   transfer,   pledge,   hypothecate,
encumber,  license (except for non-exclusive  licenses granted by the Company in
the  ordinary  course of  business),  sell or  otherwise  dispose  of any of the
Collateral without the prior written consent of the Secured Party.

               (k)  The Company shall keep and preserve its Equipment, Inventory
and other tangible Collateral in good condition,  repair and order and shall not
operate or locate any such  Collateral  (or cause to be  operated or located) in
any area excluded from insurance coverage.

               (l)  The  Company  shall,  within  ten  (10)  days  of  obtaining
knowledge thereof,  advise the Secured Party promptly,  in sufficient detail, of
any  substantial  change in the  Collateral,  and of the occurrence of any event
which would have a material  adverse effect on the value of the Collateral or on
the Secured Party's security interest therein.


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<PAGE>


               (m)  The  Company  shall  promptly  execute  and  deliver  to the
Secured Party such further deeds, mortgages,  assignments,  security agreements,
financing   statements  or  other  instruments,   documents,   certificates  and
assurances  and take such further  action as the Secured  Party may from time to
time request and may in its sole discretion  deem necessary to perfect,  protect
or  enforce  its  security  interest  in  the  Collateral   including,   without
limitation,  the execution and delivery of a separate  security  agreement  with
respect to the Company's intellectual property  ("Intellectual Property Security
Agreement")  in which the  Secured  Party has been  granted a security  interest
hereunder,  substantially  in a form  acceptable  to the  Secured  Party,  which
Intellectual Property Security Agreement, other than as stated therein, shall be
subject to all of the terms and conditions hereof.

               (n)  The  Company   shall  permit  the  Secured   Party  and  its
representatives  and agents to inspect the  Collateral at any time,  and to make
copies of  records  pertaining  to the  Collateral  as may be  requested  by the
Secured Party from time to time.

               (o)  The  Company  will take all steps  reasonably  necessary  to
diligently pursue and seek to preserve,  enforce and collect any rights, claims,
causes of action and accounts receivable in respect of the Collateral.

               (p)  The  Company  shall  promptly  notify the  Secured  Party in
sufficient detail upon becoming aware of any attachment,  garnishment, execution
or  other  legal  process  levied  against  any  Collateral  and  of  any  other
information  received by the Company that may materially affect the value of the
Collateral,  the  Security  Interest  or the rights and  remedies of the Secured
Party hereunder.

               (q)  All information heretofore,  herein or hereafter supplied to
the Secured Party by or on behalf of the Company with respect to the  Collateral
is accurate and complete in all material respects as of the date furnished.

               (r)  Schedule  A  attached  hereto  contains a list of all of the
subsidiaries of Company.

          4.   Defaults. The following events shall be "Events of Default":

               (a)  The  occurrence  of an Event of Default  (as  defined in the
Notes) under the Notes;

               (b)  Any  representation  or  warranty  of the  Company  in  this
Agreement or in the Intellectual Property Security Agreement shall prove to have
been incorrect in any material respect when made;

               (c)  The  failure by the Company to observe or perform any of its
obligations hereunder or in the Intellectual Property Security Agreement for ten
(10) days  after  receipt  by the  Company  of notice of such  failure  from the
Secured Party; and


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               (d)  Any breach of, or default under, the Warrants.

          5.   Duty To Hold In  Trust.  Upon  the  occurrence  of any  Event  of
Default and at any time thereafter, the Company shall, upon receipt by it of any
revenue, income or other sums subject to the Security Interest,  whether payable
pursuant  to the  Notes  or  otherwise,  or of any  check,  draft,  note,  trade
acceptance  or other  instrument  evidencing  an obligation to pay any such sum,
hold the same in trust for the  Secured  Party and shall  forthwith  endorse and
transfer  any such  sums or  instruments,  or both,  to the  Secured  Party  for
application to the satisfaction of the Obligations.

          6.   Rights and Remedies Upon Default. Upon occurrence of any Event of
Default and at any time  thereafter,  the Secured  Party shall have the right to
exercise all of the remedies  conferred  hereunder and under the Notes,  and the
Secured  Party shall have all the rights and  remedies of a secured  party under
the UCC and/or any other  applicable law (including the Uniform  Commercial Code
of  any  jurisdiction  in  which  any  Collateral  is  then  located).   Without
limitation, the Secured Party shall have the following rights and powers:

               (a)  The Secured Party shall have the right to take possession of
the Collateral and, for that purpose,  enter, with the aid and assistance of any
person,  any premises where the  Collateral,  or any part thereof,  is or may be
placed and remove the same,  and the Company shall  assemble the  Collateral and
make it available to the Secured  Party at places which the Secured  Party shall
reasonably  select,  whether at the Company's  premises or  elsewhere,  and make
available to the Secured Party,  without rent,  all of the Company's  respective
premises and facilities  for the purpose of the Secured Party taking  possession
of, removing or putting the Collateral in saleable or disposable form.

               (b)  The  Secured  Party  shall  have the  right to  operate  the
business of the Company using the Collateral and shall have the right to assign,
sell,  lease  or  otherwise  dispose  of and  deliver  all or  any  part  of the
Collateral,  at public or  private  sale or  otherwise,  either  with or without
special  conditions  or  stipulations,  for  cash  or on  credit  or for  future
delivery,  in such parcel or parcels and at such time or times and at such place
or places,  and upon such terms and  conditions  as the  Secured  Party may deem
commercially reasonable,  all without (except as shall be required by applicable
statute  and cannot be  waived)  advertisement  or demand  upon or notice to the
Company  or right of  redemption  of the  Company,  which are  hereby  expressly
waived. Upon each such sale, lease,  assignment or other transfer of Collateral,
the Secured  Party may,  unless  prohibited  by  applicable  law which cannot be
waived,  purchase all or any part of the  Collateral  being sold,  free from and
discharged  of all  trusts,  claims,  right of  redemption  and  equities of the
Company, which are hereby waived and released.

          7.   Applications of Proceeds. The proceeds of any such sale, lease or
other  disposition of the Collateral  hereunder  shall be applied first,  to the
expenses of retaking,  holding,  storing,  processing  and  preparing  for sale,
selling, and the like (including,  without limitation, any taxes, fees and other
costs  incurred in connection  therewith) of the  Collateral,  to the reasonable
attorneys'  fees and expenses  incurred by the Secured  Party in  enforcing  its
rights hereunder and in connection with collecting, storing and disposing of the
Collateral,  and then to satisfaction of the Obligations,  and to the payment of
any other  amounts  required by  applicable  law,  after which the Secured Party
shall pay to the  Company any surplus  proceeds.  If, upon the sale,  license or


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other  disposition of the Collateral,  the proceeds  thereof are insufficient to
pay all amounts to which the Secured Party is legally entitled, the Company will
be liable for the deficiency, together with interest thereon, at the rate of 15%
per  annum  (the  "Default  Rate"),  and the  reasonable  fees of any  attorneys
employed  by the  Secured  Party  to  collect  such  deficiency.  To the  extent
permitted by applicable law, the Company waives all claims,  damages and demands
against the Secured Party arising out of the repossession, removal, retention or
sale of the Collateral, unless due to the gross negligence or willful misconduct
of the Secured Party.

          8.   Costs and Expenses.  The Company agrees to pay all  out-of-pocket
fees,  costs and  expenses  incurred  in  connection  with any  filing  required
hereunder, including without limitation, any financing statements,  continuation
statements,  partial releases and/or  termination  statements related thereto or
any  expenses of any  searches  reasonably  required by the Secured  Party.  The
Company  shall also pay all other  claims and  charges  which in the  reasonable
opinion of the Secured Party might  prejudice,  imperil or otherwise  affect the
Collateral or the Security Interest therein. The Company will also, upon demand,
pay to the  Secured  Party  the  amount  of any  and  all  reasonable  expenses,
including the reasonable fees and expenses of its counsel and of any experts and
agents, which the Secured Party may incur in connection with (i) the enforcement
of this  Agreement,  (ii)  the  custody  or  preservation  of,  or the  sale of,
collection from, or other realization upon, any of the Collateral,  or (iii) the
exercise  or  enforcement  of any of the rights of the  Secured  Party under the
Notes. Until so paid, any fees payable hereunder shall be added to the principal
amount of the Notes and shall bear interest at the Default Rate.

          9.   Responsibility   for   Collateral.   The   Company   assumes  all
liabilities  and  responsibility  in  connection  with all  Collateral,  and the
obligations  of the Company  hereunder or under the Notes and the Warrants shall
in no way be affected or diminished by reason of the loss,  destruction,  damage
or theft of any of the Collateral or its unavailability for any reason.

          10.  Security Interest  Absolute.  All rights of the Secured Party and
all Obligations of the Company  hereunder,  shall be absolute and unconditional,
irrespective of: (a) any lack of validity or  enforceability  of this Agreement,
the Notes,  the Warrants or any agreement  entered into in  connection  with the
foregoing,  or any portion hereof or thereof; (b) any change in the time, manner
or place of  payment or  performance  of, or in any other term of, all or any of
the  Obligations,  or any other  amendment  or waiver of or any  consent  to any
departure from the Notes,  the Warrants or any other  agreement  entered into in
connection with the foregoing; (c) any exchange, release or nonperfection of any
of the  Collateral,  or any  release  or  amendment  or waiver of or  consent to
departure from any other collateral for, or any guaranty, or any other security,
for all or any of the  Obligations;  (d) any  action  by the  Secured  Party  to
obtain, adjust, settle and cancel in its sole discretion any insurance claims or
matters  made or arising in  connection  with the  Collateral;  or (e) any other
circumstance  which might  otherwise  constitute any legal or equitable  defense
available  to the  Company,  or a discharge  of all or any part of the  Security
Interest  granted  hereby.  Until  the  Obligations  shall  have  been  paid and
performed in full,  the rights of the Secured  Party shall  continue even if the
Obligations  are barred  for any  reason,  including,  without  limitation,  the
running of the statute of  limitations  or  bankruptcy.  The  Company  expressly
waives presentment, protest, notice of protest, demand, notice of nonpayment and
demand  for  performance.  In the  event  that at any time any  transfer  of any
Collateral  or any  payment  received by the Secured  Party  hereunder  shall be
deemed  by final  order  of a court of  competent  jurisdiction  to have  been a
voidable preference or fraudulent  conveyance under the bankruptcy or insolvency


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laws of the United  States,  or shall be deemed to be otherwise due to any party
other than the Secured Party, then, in any such event, the Company's obligations
hereunder  shall  survive  cancellation  of this  Agreement,  and  shall  not be
discharged or satisfied by any prior payment thereof and/or cancellation of this
Agreement,  but  shall  remain a valid and  binding  obligation  enforceable  in
accordance with the terms and provisions hereof. The Company waives all right to
require the Secured  Party to proceed  against any other  person or to apply any
Collateral  which the Secured Party may hold at any time, or to marshal  assets,
or to pursue any other remedy.  The Company waives any defense arising by reason
of the  application  of the statute of  limitations  to any  obligation  secured
hereby.

          11.  Term of Agreement. This Agreement and the Security Interest shall
terminate  on the date on which all  payments  under the Notes have been made in
full  and all  other  Obligations  have  been  paid  or  discharged.  Upon  such
termination,  the  Secured  Party,  at the  request  and at the  expense  of the
Company,  will join in executing any  termination  statement with respect to any
financing statement executed and filed pursuant to this Agreement.

          12.  Power of Attorney; Further Assurances.

               (a)  The Company  authorizes the Secured  Party,  and does hereby
make, constitute and appoint it, and its respective officers, agents, successors
or assigns with full power of  substitution,  as the  Company's  true and lawful
attorney-in-fact, with power, in its own name or in the name of the Company, to,
after the  occurrence  and during the  continuance  of an Event of Default,  (i)
endorse any notes, checks, drafts, money orders, or other instruments of payment
(including  payments  payable under or in respect of any policy of insurance) in
respect of the  Collateral  that may come into  possession of the Secured Party;
(ii) to sign and endorse any UCC financing statement or any invoice,  freight or
express bill,  bill of lading,  storage or warehouse  receipts,  drafts  against
debtors, assignments, verifications and notices in connection with accounts, and
other  documents  relating to the Collateral;  (iii) to pay or discharge  taxes,
liens,  security interests or other encumbrances at any time levied or placed on
or threatened  against the  Collateral;  (iv) to demand,  collect,  receipt for,
compromise,  settle and sue for monies due in respect of the Collateral; and (v)
generally,  to do, at the  option of the  Secured  Party,  and at the  Company's
expense,  at any  time,  or from  time to time,  all acts and  things  which the
Secured  Party  deems  necessary  to  protect,  preserve  and  realize  upon the
Collateral  and the  Security  Interest  granted  therein in order to effect the
intent  of  this  Agreement,  the  Notes  and the  Warrants,  all as  fully  and
effectually  as the Company might or could do; and the Company  hereby  ratifies
all that said attorney  shall  lawfully do or cause to be done by virtue hereof.
This power of attorney is coupled with an interest and shall be irrevocable  for
the term of this  Agreement  and  thereafter  as long as any of the  Obligations
shall be outstanding.

               (b)  On a  continuing  basis,  the  Company  will make,  execute,
acknowledge,  deliver, file and record, as the case may be, in the proper filing
and recording places in any jurisdiction,  including,  without  limitation,  the
jurisdictions  indicated on Schedule B, attached hereto,  all such  instruments,
and take all such action as may reasonably be deemed necessary or advisable,  or
as reasonably  requested by the Secured Party, to perfect the Security  Interest
granted  hereunder  and  otherwise  to carry out the intent and purposes of this
Agreement,  or for assuring  and  confirming  to the Secured  Party the grant or
perfection of a security interest in all the Collateral.


                                       8
<PAGE>


               (c)  The Company hereby irrevocably appoints the Secured Party as
the Company's  attorney-in-fact,  with full  authority in the place and stead of
the  Company  and in the name of the  Company,  from time to time in the Secured
Party's  discretion,  to take any action and to execute any instrument which the
Secured Party may deem necessary or advisable to accomplish the purposes of this
Agreement,  including  the  filing,  in its  sole  discretion,  of  one or  more
financing or continuation statements and amendments thereto,  relative to any of
the Collateral without the signature of the Company where permitted by law.

          13.  Notices. All notices,  requests, demands and other communications
hereunder shall be in writing,  with copies to all the other parties hereto, and
shall be deemed to have been duly  given  when (i) if  delivered  by hand,  upon
receipt,  (ii) if sent by facsimile,  upon receipt of proof of sending  thereof,
(iii) if sent by  nationally  recognized  overnight  delivery  service  (receipt
requested), the next business day or (iv) if mailed by first-class registered or
certified  mail,  return receipt  requested,  postage  prepaid,  four days after
posting in the U.S. mails, in each case if delivered to the following addresses:



If to the Company:        QT 5, Inc.
                          5655 Lindero Canyon Road
                          Suite 120
                          Westlake Village, California  91362
                          Attention: Chief Executive Officer
                          Telephone:  818-338-1510
                          Facsimile:   818-338-1551

With a copy to:           Sichenzia Ross Friedman Ference LLP
                          1065 Avenue of the Americas
                          New York, New York  10018
                          Attention:  Darrin M. Ocasio, Esq.
                          Telephone:  212-930-9700
                          Facsimile:   212-930-9725

If to the Secured Party:  AJW Partners, LLC
                          AJW Offshore, Ltd.
                          AJW Qualified Partners, LLC
                          New Millennium Capital Partners II, LLC
                          1044 Northern Boulevard
                          Suite 302
                          Roslyn, New York  11576
                          Attention:  Corey Ribotsky
                          Telephone:  516-739-7110
                          Facsimile:  516-739-7115


                                       9
<PAGE>


With a copy to:           Ballard Spahr Andrews & Ingersoll, LLP
                          1735 Market Street, 51st Floor
                          Philadelphia, Pennsylvania  19103
                          Attention:  Gerald J. Guarcini, Esq.
                          Telephone:  215-864-8625
                          Facsimile:   215-864-8999

          14.  Other  Security.  To the extent that the  Obligations  are now or
hereafter  secured by property  other than the  Collateral or by the  guarantee,
endorsement or property of any other person, firm,  corporation or other entity,
then the Secured Party shall have the right, in its sole discretion,  to pursue,
relinquish,  subordinate,  modify or take any other action with respect thereto,
without in any way modifying or affecting any of the Secured  Party's rights and
remedies hereunder.

          15.  Miscellaneous.

               (a)  No course of dealing  between  the  Company  and the Secured
Party, nor any failure to exercise, nor any delay in exercising,  on the part of
the Secured Party,  any right,  power or privilege  hereunder or under the Notes
shall operate as a waiver thereof;  nor shall any single or partial  exercise of
any right,  power or  privilege  hereunder or  thereunder  preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.

               (b)  All of the rights and  remedies  of the  Secured  Party with
respect to the Collateral,  whether established hereby or by the Notes or by any
other agreements, instruments or documents or by law shall be cumulative and may
be exercised singly or concurrently.  (c) This Agreement  constitutes the entire
agreement  of the  parties  with  respect to the  subject  matter  hereof and is
intended to supersede all prior negotiations, understandings and agreements with
respect  thereto.  Except  as  specifically  set  forth  in this  Agreement,  no
provision  of this  Agreement  may be  modified  or amended  except by a written
agreement  specifically  referring to this  Agreement  and signed by the parties
hereto.

               (d)  In the event that any provision of this Agreement is held to
be invalid,  prohibited or  unenforceable  in any  jurisdiction  for any reason,
unless such  provision  is narrowed by  judicial  construction,  this  Agreement
shall, as to such jurisdiction,  be construed as if such invalid,  prohibited or
unenforceable  provision had been more  narrowly  drawn so as not to be invalid,
prohibited or unenforceable. If, notwithstanding the foregoing, any provision of
this  Agreement  is held  to be  invalid,  prohibited  or  unenforceable  in any
jurisdiction,  such provision, as to such jurisdiction,  shall be ineffective to
the  extent  of  such  invalidity,   prohibition  or  unenforceability   without
invalidating the remaining  portion of such provision or the other provisions of
this  Agreement  and without  affecting the validity or  enforceability  of such
provision or the other provisions of this Agreement in any other jurisdiction.

               (e)  No waiver of any breach or  default or any right  under this
Agreement  shall be  considered  valid unless in writing and signed by the party
giving  such  waiver,  and no such  waiver  shall  be  deemed  a  waiver  of any
subsequent breach or default or right,  whether of the same or similar nature or
otherwise.


                                       10
<PAGE>


               (f)  This  Agreement  shall  be  binding  upon  and  inure to the
benefit of each party hereto and its successors and assigns.

               (g)  Each party  shall take such  further  action and execute and
deliver such further  documents as may be necessary or  appropriate  in order to
carry out the provisions and purposes of this Agreement.

               (h)  This  Agreement  shall be construed in  accordance  with the
laws of the State of New York, except to the extent the validity,  perfection or
enforcement  of a security  interest  hereunder  in  respect  of any  particular
Collateral which are governed by a jurisdiction other than the State of New York
in which case such law shall  govern.  Each of the  parties  hereto  irrevocably
submit to the  exclusive  jurisdiction  of any New York  State or United  States
Federal court sitting in Manhattan county over any action or proceeding  arising
out of or relating to this Agreement,  and the parties hereto hereby irrevocably
agree that all claims in respect of such action or  proceeding  may be heard and
determined  in such New York State or Federal  court.  The parties  hereto agree
that a final  judgment in any such action or proceeding  shall be conclusive and
may be enforced in other  jurisdictions  by suit on the judgment or in any other
manner  provided by law. The parties hereto further waive any objection to venue
in the State of New York and any  objection  to an action or  proceeding  in the
State of New York on the basis of forum non conveniens.

               (i)  EACH  PARTY  HERETO  HEREBY  AGREES TO WAIVE ITS  RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL  ENCOMPASSING
OF ANY  DISPUTES  THAT MAY BE FILED IN ANY COURT AND THAT  RELATE TO THE SUBJECT
MATER OF THIS AGREEMENT,  INCLUDING  WITHOUT  LIMITATION  CONTRACT CLAIMS,  TORT
CLAIMS,  BREACH OF DUTY CLAIMS AND ALL OTHER  COMMON LAW AND  STATUTORY  CLAIMS.
EACH PARTY HERETO  ACKNOWLEDGES  THAT THIS WAIVER IS A MATERIAL  INDUCEMENT  FOR
EACH PARTY TO ENTER INTO A BUSINESS  RELATIONSHIP,  THAT EACH PARTY HAS  ALREADY
RELIED ON THIS WAIVER IN ENTERING  INTO THIS  AGREEMENT AND THAT EACH PARTY WILL
CONTINUE TO RELY ON THIS WAIVER IN THEIR  RELATED  FUTURE  DEALINGS.  EACH PARTY
FURTHER  WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL,  AND THAT SUCH PARTY HAS KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHTS TO
A JURY TRIAL FOLLOWING SUCH  CONSULTATION.  THIS WAIVER IS IRREVOCABLE,  MEANING
THAT,  NOTWITHSTANDING  ANYTHING HEREIN TO THE CONTRARY,  IT MAY NOT BE MODIFIED
EITHER  ORALLY OR IN  WRITING,  AND THIS WAIVER  SHALL  APPLY TO ANY  SUBSEQUENT
AMENDMENTS,  RENEWALS AND SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE
EVENT OF A LITIGATION,  THIS  AGREEMENT  MAY BE FILED AS A WRITTEN  CONSENT TO A
TRIAL BY THE COURT.

               (j)  This   Agreement   may  be   executed   in  any   number  of
counterparts,  each of which when so executed  shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement. In
the event that any  signature  is  delivered  by  facsimile  transmission,  such
signature shall create a valid binding  obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as if such facsimile signature were the original thereof.




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                                       11
<PAGE>



         IN WITNESS  WHEREOF,  the parties  hereto  have  caused  this  Security
Agreement to be duly executed on the day and year first above written.


                                        QT 5, INC.



                                        By:_____________________________________
                                           Timothy J. Owens
                                           Chief Executive Officer


                                        AJW PARTNERS, LLC
                                        By: SMS Group, LLC



                                        By:_____________________________________
                                           Corey S. Ribotsky
                                           Manager


                                        AJW OFFSHORE, LTD.
                                        By:  First Street Manager II, LLC



                                        By:_____________________________________
                                           Corey S. Ribotsky
                                           Manager


                                        AJW QUALIFIED PARTNERS, LLC
                                        By: AJW Manager, LLC


                                        By:_____________________________________
                                           Corey S. Ribotsky
                                           Manager


                                        NEW MILLENNIUM CAPITAL PARTNERS II, LLC.
                                        By:  First Street Manager II, LLC



                                        By:_____________________________________
                                           Corey S. Ribotsky
                                           Manager




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