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                                                                    Exhibit 4.10

                               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 NDMS Investments, L.P., a Nevada limited partnership ("Secured Party"),
with reference to the following facts and circumstances.

         A. Debtor has delivered a Secured  Promissory  Note to Secured Party in
the principal amount of One Hundred Sixty-Five  Thousand Dollars ($165,000) (the
"Secured Amount").

         B. In order to secure  its  obligations  to repay the  Secured  Amount,
Debtor has agreed to grant Secured Party a first priority  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 FIRST PRIORITY 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  first
priority security interest in any and all of Debtor's right,  title and interest
in and to the  Collateral;  provided  that  if  the  security  interest  granted
hereunder is not at any time held by Secured Party the security  interest  shall
be pari  passu  with the  security  interests  granted  in  favor of  Devonshire
Management Corp., Alliance Financial Network Inc. and Dale Affonso.

          2.  OBLIGATIONS.  This Agreement,  and Debtor's pledge of and grant to
Secured Party of a first priority 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  policies,  including  unearned  premiums;  (ix)  deposit
accounts;  (x) rights to receive

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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, 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

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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  first priority 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 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.

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               (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 first  priority  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
Devenshire  Management Corp.,  Alliance Financial Network, Inc. and Dale Affonso
if such security  interests are junior in priority to security  interest granted
to Debtor.

               (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.

               (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'  first
priority  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.
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               (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'  first  priority  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;

               (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 first  priority  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

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               (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 purpose of protecting,  maintaining or enforcing the first priority 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.

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         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:

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

            If to Secured Party:   NDMS Investments, L.P.
            -------------------    5885 Via Manigua
                                   Las Vegas, NV  89120
                                   Attention:  Robert Moore, General Partner

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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.

               (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.

                                       9

<PAGE>

         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

<PAGE>

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

                                    QT-5, INC.,
                                    a Delaware corporation

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

                                    By:
                                         -------------------------------------
                                         Tim Owens
                                         Chief Executive Officer, Director

Acknowledged and agreed by
Secured Party:

NDMS INVESTMENTS, L.P..
a Nevada limited partnership

By
  ----------------------------------------
         Robert Moore
         General Partner

                                       11

<PAGE>

                                  Schedule 5(c)

                                      NONE

                                       12

<PAGE>

                                  Schedule 5(d)

                                      NONE

                                       13

<PAGE>

                                    EXHIBIT A

                                 PATENT MORTGAGE

                                       14

<PAGE>Exhibit 10.2

                            SCHICK TECHNOLOGIES, INC.
          1997 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS, AS AMENDED

1.    Purpose

            The purpose of the Schick Technologies, Inc. 1997 Stock Option Plan
for Non-Employee Directors (the "Plan") is to assist Schick Technologies, Inc.,
a Delaware corporation (the "Corporation") and its subsidiaries and affiliates
in attracting, retaining, and compensating highly qualified individuals who are
not employees for service as members of the Board of Directors of the
Corporation (the "Board") and to provide such individuals with an ownership
interest in the Corporation's common stock. The Plan will be beneficial to the
Corporation and its stockholders by allowing these Non-Employee Directors to
have a personal financial stake in the Corporation through an ownership interest
in the Corporation's common stock, in addition to underscoring their common
interest with stockholders in increasing the value of the Corporation's stock
over the long term.

2.    Definitions

            2.1 A "Change in Control of the Corporation" shall be deemed to
occur if any of the following circumstances shall occur:

                        (i) any "person" or "group" within the meaning of
                  Sections 13(d) and 14(d)(2) of the Securities Exchange Act of
                  1934 ("Act") becomes the "beneficial owner" as defined in Rule
                  13d-3 under the Act of more than 20% of the then outstanding
                  voting securities of the Corporation;

                        (ii) any "person" or "group" within the meaning of
                  Sections 13(d) and 14(d)(2) of the Act acquires by proxy or
                  otherwise the right to vote for the election of directors, for
                  any merger or consolidation of the Corporation or for any
                  other matter or question with respect to more than 20% of the
                  then outstanding voting securities of the Corporation;

                        (iii) if during any period of twenty-four consecutive
                  months, Present Directors and/or New Directors cease for any
                  reason to constitute a majority of the Board.

                        For these purposes, "Present Directors" shall mean
                  individuals who at the beginning of such consecutive
                  twenty-four month period were members of the Board and "New
                  Directors" shall mean any director whose election by the Board
                  or whose nomination for election by the Corporation's
                  stockholders was

<PAGE>

                  approved by a vote of at least two-thirds of the Directors
                  then still in office who were Present Directors or New
                  Directors;

                        (iv) the stockholders of the Corporation approve a plan
                  of complete liquidation or dissolution of the Corporation; or

                        (v) there shall be consummated (x) a reorganization,
                  merger or consolidation of all or substantially all of the
                  assets of the Corporation (a "Business Combination"), unless,
                  following such Business Combination, (a) all or substantially
                  all of the individuals and entities who were the beneficial
                  owners, respectively, of the outstanding common stock of the
                  Corporation and outstanding voting securities of the
                  Corporation immediately prior to such Business Combination
                  beneficially own, directly or indirectly, more than 50% of,
                  respectively, the then outstanding shares of common stock and
                  the combined voting power of the then outstanding voting
                  securities entitled to vote generally in the election of
                  directors, as the case may be, of the corporation resulting
                  from such Business Combination (including, without limitation,
                  a corporation which as a result of such transaction owns the
                  Corporation or all or substantially all of the Corporation's
                  assets either directly or through one or more subsidiaries) in
                  substantially the same proportions as their ownership,
                  immediately prior to such Business Combination of the
                  outstanding common stock of the Corporation and outstanding
                  voting securities of the Corporation, as the case may be, (b)
                  no person (excluding any corporation resulting from such
                  Business Combination or any employee benefit plan (or related
                  trust) of the Corporation or such corporation resulting from
                  such Business Combination) beneficially owns, directly or
                  indirectly, 20% or more of, respectively, the then outstanding
                  shares of common stock of the corporation resulting from such
                  Business Combination or the combined voting power of the then
                  outstanding voting securities of such corporation except to
                  the extent that such ownership existed prior to the Business
                  Combination and (c) at least a majority of the members of the
                  board of directors of the corporation resulting from such
                  Business Combination were members of the Board at the time of
                  the execution of the initial agreement, or of the action of
                  the Board, providing for such Business Combination; or (y) any
                  sale, lease, exchange or other transfer (in one transaction or
                  a series of related transactions) of all, or

<PAGE>

                  substantially all, of the assets of the Corporation, provided,
                  that the divestiture of less than substantially all of the
                  assets of the Corporation in one transaction or a series of
                  related transactions, whether effected by sale, lease,
                  exchange, spin-off, sale of the stock or merger of a
                  subsidiary or otherwise, shall not constitute a Change in
                  Control of the Corporation.

      Notwithstanding the foregoing, a Change in Control of the Corporation
shall not be deemed to occur pursuant to subparagraphs (i) and (ii) above,
solely because twenty percent (20%) or more of the combined voting power of the
Corporation's then outstanding securities is acquired by one or more employee
benefit plans maintained by the Corporation.

            2.2 "Disability" means a Participant's total physical or mental
inability to perform any work for compensation or profit in any occupation for
which the Participant is reasonably qualified by reason of training, education
or ability, and which inability is determined to be permanent, as determined by
the Committee.

            2.3 "Fair Market Value" of one share of Stock as of any
determination date means (i) if the Stock is listed on a national securities
exchange or the Nasdaq National Market, or traded on the Nasdaq Small Cap
Market, the NASD OTC Bulletin Board, the BBX Bulletin Board Exchange, or
otherwise in the over-the-counter market, the publicly reported closing sale
price of the Stock as of the close of trading on the applicable determination
date; or (ii) if the preceding clause is not applicable, the fair value of a
share of Stock as determined in good faith by the Board.

            2.4 "Non-Employee Director" means each individual who is a member of
the Board on the Effective Date, or who thereafter becomes a member of the Board
while the Plan is in effect, who is not an employee or officer of the
Corporation or its subsidiaries or affiliates.

            2.5 "Participant" means a Participant as defined in Article 4.

            2.6 "Stock" means the common stock, $.01 par value, of the
Corporation.

3.    Effective Date

            The Plan shall become effective upon the closing of an initial
public offering of the Stock.

4.    Participation

            The participants in the Plan ("Participants") shall be all
Non-Employee Directors.

5.    Administration

            The Plan shall be administered and interpreted by the Board or by a
committee or subcommittee of the Board appointed by the Board (hereinafter, the
Board, committee or subcommittee so appointed shall be referred to as the
"Committee"). Subject to the provisions of

<PAGE>

the Plan, the Committee shall: (i) determine the time when options will be
granted under the Plan, the terms of the options, the initial exercise date of
the options, and the number of shares of Stock to be subject to options; (ii)
establish administrative regulations to further the purpose of the Plan; and
(iii) take any other action desirable or necessary to interpret or construe the
provisions of the Plan. The Committee's interpretation of the Plan, and all
actions taken and determinations made by the Committee pursuant to the powers
vested in it hereunder, shall be conclusive and binding upon all parties
concerned including the Corporation, its stockholders and persons granted
options under the Plan. The Chairman of the Board and Chief Executive Officer of
the Corporation shall be authorized to implement the Plan in accordance with its
terms and to take or cause to be taken such actions of a ministerial nature as
shall be necessary to effectuate the intent and purposes thereof.

6.    Shares

            6.1 Maximum Amount Available. The total number of shares of Stock
optioned or granted under this Plan during the term of the Plan shall not exceed
600,000 shares except as increased or otherwise adjusted in accordance with
Section 6.2. Solely for the purpose of computing the total number of shares of
Stock optioned or granted under this Plan, there shall not be counted any shares
which have been forfeited if the Participant received no benefits of ownership
from the Stock and any shares covered by an option which, prior to such
computation, has terminated in accordance with its terms or has been canceled by
the Participant or the Corporation.

            6.2 Adjustment in the Event of Recapitalization, Etc. In the event
of any change in the capital structure of the Corporation by reason of any stock
split, stock dividend, recapitalization, merger, consolidation, combination or
exchange of shares or other similar corporate change or in the event of any
special distribution to the stockholders, the Committee shall make such
equitable adjustments in the number of shares and prices per share applicable to
options then outstanding and in the number of shares which are available
thereafter for Stock options, both under the Plan as a whole and with respect to
individuals, as the Committee determines are necessary and appropriate. Any such
adjustment shall be conclusive and binding for all purposes of the Plan.

7.    Awards and Terms of Options

            7.1 Form of Options. Options granted under the Plan constitute
nonqualified stock options within the meaning of Section 83 of the Internal
Revenue Code of 1986, as amended, and the regulations thereunder.

<PAGE>

            7.2 Grant of Options. The Committee may from time to time, in its
sole discretion, approve the granting of Options to Participants to purchase
shares of Stock (the "Option").

            7.3 Option Price. The Option Price of each share of Stock subject to
an Option shall be 100% of the Fair Market Value of such share at the time of
grant.

            7.4 Terms of Option.

                  (a) An Option by its terms shall be of no more than ten years'
duration.

                  (b) An Option (or any portion thereof) by its terms shall be
exercisable only after the earliest of: (i) such period of time as the Committee
shall determine and specify in the grant, but in no event less than six months
following the date of grant of such Option; (ii) the Participant's death or
Disability; or (iii) a Change in Control of the Corporation.

                  (c) The following rules shall apply with regard to Options
upon a termination of service on the Board:

                  (i) Disability, Retirement or Otherwise Ceasing to Be a
            Director (Other than for Cause). Except as otherwise provided
            herein, upon the termination of service on the Board of a
            Participant on account of Disability, retirement, voluntary
            resignation, failure to stand for reelection or failure to be
            reelected or otherwise than as set forth in (ii) below, all
            outstanding Options then exercisable and not exercised by the
            Participant prior to such termination shall remain exercisable to
            the extent exercisable at the date of such termination. An Option
            may not be exercised pursuant to this subparagraph (i) after the
            expiration date of the Option.

                  (ii) Cause. Upon removal of a Participant from the Board for
            cause (as determined by the Committee), the then outstanding Options
            of such Participant shall be exercisable only to the extent that
            they were exercisable on the date of such removal and shall expire
            six months after such removal or on their stated expiration date,
            whichever occurs first. Options that are not exercisable on the date
            of such removal shall be forfeited.

                  (iii) Death. Upon the death of a Participant, each of the then
            outstanding Options of such Participant shall become immediately
            exercisable, and shall be exercisable by such Participant's
            beneficiary at any time until the expiration date of the Option.
            Participants shall designate beneficiaries in accordance with
            procedures established by the Committee.

<PAGE>

            7.5 Exercise of Option. An Option may be exercised with respect to
part or all of the shares subject to the Option by giving written notice to the
Corporation of the Participant's election to exercise the Option. The Option
Price for the shares for which an Option is exercised shall be paid on the date
of exercise (i) in cash; (ii) in whole shares of Stock owned by the Participant
more than six months prior to exercising the Option; or (iii) in a combination
of cash and delivery of shares of Stock owned more than six months. The value of
any share of Stock to be delivered in payment of the Option Price shall be its
Fair Market Value on the date the Option is exercised.

8.    Withholding

            In order to enable the Corporation to meet any applicable federal,
state or local withholding tax requirements arising as a result of the exercise
of an Option, a Participant shall pay to the Corporation the amount of tax to be
withheld. In the alternative, the Participant may elect to satisfy such
obligation (i) by having the Corporation withhold shares that otherwise would be
delivered to the Participant pursuant to the exercise of the Option for which
the minimum statutory tax is being withheld; (ii) by delivering to the
Corporation other shares of Stock owned by the Participant more than six months
prior to exercising the Option; or (iii) by making a payment to the Corporation
consisting of a combination of cash and such shares of Stock, owned by the
participant more than six months. Such an election shall be subject to the
following: (a) the election shall be made in such manner as may be prescribed by
the Committee and the Committee shall have the right, in its discretion, to
disapprove such election and (b) the election shall be made prior to the date to
be used to determine the tax to be withheld and shall be irrevocable. The value
of any share of Stock to be withheld by the Corporation or delivered to the
Corporation pursuant to this Article 8 shall be its Fair Market Value on the
date the Option is exercised.

9.    General Provisions

            9.1 Rights as Shareholder. A Participant shall have no rights as a
shareholder of Stock with respect to Option grants hereunder, unless and until
certificates for shares of such Stock are issued to the Participant.

            9.2 Assignment or Transfer. Except as set forth below, an Option by
its terms shall not be transferable by the Participant other than by will or the
laws of descent and distribution, and, during the Participant's lifetime, will
be exercisable only by the Participant. Notwithstanding the foregoing, the terms
of the Option may permit the Participant to transfer the Option to (i) his or
her spouse, children or grandchildren (referred to herein as the Participant's
"Family Members"), (ii) a trust or trusts for the exclusive benefit of such

<PAGE>

Family Members, or (iii) a partnership in which such Family Members are the only
partners. Any transfer pursuant to this Section 9.2 shall be subject to the
following: (a) there may be no consideration for any such transfer; (b) the
option agreement pursuant to which such Options are granted must be approved by
the Committee, and must expressly provide for transferability in a manner
consistent with this Section 9.2; and (c) subsequent transfers of transferred
Options shall be prohibited except those in accordance with this Section 9.2.
Following the transfer, the transferred Options shall continue to be subject to
the same terms and conditions as were applicable immediately prior to the
transfer, provided that for purposes of Section 7.5 hereof, the term
"Participant" shall be deemed to refer to the transferee. The events of death,
Disability, retirement and termination of service described in Section 7.4
hereof shall continue to be applied with respect to the original Participant,
following which the Options shall be exercisable by the transferee only to the
extent and for the periods specified in Article 7 of the Plan.

            9.3 Agreements. All Options granted under the Plan shall be
evidenced by agreements or duly recorded Minutes of the Committee in such form
and containing such terms and conditions (not inconsistent with the Plan) as the
Committee shall adopt.

            9.4 Costs and Expenses. The costs and expenses of administering the
Plan shall be borne by the Corporation and not charged to any Option or to any
Non-Employee Director receiving an Option.

10.   Initial Public Offering

            Notwithstanding anything herein to the contrary, for a period of 180
days from the date of a final prospectus included or incorporated by reference
in a registration statement declared effective by the Securities and Exchange
Commission in connection with a firm commitment underwritten initial public
offering of common stock made by the Corporation, a Participant shall not,
directly or indirectly, offer for sale, sell or otherwise dispose of any shares
of Stock received pursuant to the exercise of an Option hereunder without the
prior written consent of the Board, whose consent may be withheld for any
reason. A legend to such effect shall be placed on certificates representing
Stock received pursuant to the exercise of an Option during such restriction
period.

11.   Amendment, Termination and Term of Plan

            11.1 Amendments. The Board may from time to time amend the Plan in
whole or in part; provided, that no such action shall adversely affect any
rights or obligations with respect to any Options theretofore granted under the
Plan.

<PAGE>

            With the consent of the Non-Employee Director affected, the
Committee may amend outstanding agreements evidencing Options under the Plan in
a manner not inconsistent with the terms of the Plan.

            11.2 Termination. The Corporation may terminate the Plan (but not
any Options theretofore granted under the Plan) at any time.

            11.3 Term of the Plan. The Plan (but not any Options theretofore
granted under the Plan) shall terminate on, and no Options shall be granted
after, the Annual Meeting of Shareholders of the Corporation in 2007.

12.   Governing Law

            The validity and construction of the Plan and any agreements entered
into thereunder shall be governed by the laws of the State of Delaware.

                            SCHICK TECHNOLOGIES, INC.

                            Name:  Zvi N. Raskin

                            Title:  Secretary

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