Document:

REGISTRATION RIGHTS AGREEMENT

     REGISTRATION  RIGHTS AGREEMENT (this  "AGREEMENT"),  dated as of August 12,
2004,  by and among QT 5, Inc.,  a Delaware  corporation  with its  headquarters
located at 5655 Lindero Canyon Road,  Suite 120,  Westlake  Village,  California
91362  (the  "COMPANY"),  and  each  of the  undersigned  (together  with  their
respective  affiliates and any assignee or transferee of all of their respective
rights hereunder, the "INITIAL INVESTORS").

     WHEREAS:

     A.   In connection with the Securities  Purchase Agreement by and among the
parties hereto of even date herewith (the "Securities Purchase Agreement"),  the
Company  has  agreed,  upon the terms and  subject to the  conditions  contained
therein,  to issue and sell to the Initial  Investors  (i)  secured  convertible
notes in the aggregate  principal  amount of up to Five Hundred Thousand Dollars
($500,000)  (the  "Notes")  that are  convertible  into shares of the  Company's
common stock (the "Common Stock"), upon the terms and subject to the limitations
and  conditions  set forth in such Notes and (ii) warrants (the  "Warrants")  to
acquire an  aggregate of 1,500,000  shares of Common  Stock,  upon the terms and
conditions  and  subject  to the  limitations  and  conditions  set forth in the
Warrants; and

     B.   To induce the Initial  Investors to execute and deliver the Securities
Purchase  Agreement,  the  Company  has agreed to provide  certain  registration
rights  under  the  Securities  Act of  1933,  as  amended,  and the  rules  and
regulations  thereunder,  or any similar  successor statute  (collectively,  the
"1933 ACT"), and applicable state securities laws;

     NOW,  THEREFORE,  in consideration of the premises and the mutual covenants
contained  herein and other good and  valuable  consideration,  the  receipt and
sufficiency  of which  are  hereby  acknowledged,  the  Company  and each of the
Initial Investors hereby agree as follows:

          1.   DEFINITIONS.

               a.   As used in this  Agreement,  the following  terms shall have
the following meanings:

                    (i)  "INVESTORS"   means  the  Initial   Investors  and  any
transferee  or assignee  who agrees to become  bound by the  provisions  of this
Agreement in accordance with Section 9 hereof.

                    (ii) "REGISTER," "REGISTERED," and "REGISTRATION" refer to a
registration  effected  by  preparing  and filing a  Registration  Statement  or
Statements  in  compliance  with the 1933 Act and pursuant to Rule 415 under the
1933 Act or any successor rule providing for offering securities on a continuous
basis ("RULE 415"),  and the  declaration or ordering of  effectiveness  of such
Registration  Statement by the United States Securities and Exchange  Commission
(the "SEC").

                    (iii)"REGISTRABLE  SECURITIES"  means the Conversion  Shares
issued or issuable upon conversion or otherwise pursuant to the Notes including,
without limitation,  Damages Shares (as defined in the Notes) issued or issuable

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pursuant to the Notes,  shares of Common  Stock issued or issuable in payment of
the Standard  Liquidated  Damages Amount (as defined in the Securities  Purchase
Agreement), shares issued or issuable in respect of interest or in redemption of
the Notes in accordance  with the terms  thereof) and Warrant  Shares  issuable,
upon  exercise or  otherwise  pursuant to the Warrants and any shares of capital
stock issued or issuable as a dividend on or in exchange  for or otherwise  with
respect to any of the foregoing.

                    (iv) "REGISTRATION STATEMENT" means a registration statement
of the Company under the 1933 Act.

               b.   Capitalized  terms  used  herein and not  otherwise  defined
herein shall have the respective  meanings set forth in the Securities  Purchase
Agreement or the Convertible Note.

          2.   REGISTRATION.

               a.   MANDATORY  REGISTRATION.  The Company shall prepare, and, on
or prior to  forty-five  (45) days from the date of Closing  (as  defined in the
Securities  Purchase  Agreement)  (the  "FILING  DATE"),  file  with  the  SEC a
Registration  Statement on Form S-3 (or, if Form S-3 is not then  available,  on
such  form  of  Registration   Statement  as  is  then  available  to  effect  a
registration  of the  Registrable  Securities,  subject  to the  consent  of the
Initial Investors, which consent will not be unreasonably withheld) covering the
resale of the Registrable Securities underlying the Notes and Warrants issued or
issuable  pursuant to the  Securities  Purchase  Agreement,  which  Registration
Statement,  to the  extent  allowable  under  the  1933  Act and the  rules  and
regulations  promulgated  thereunder (including Rule 416), shall state that such
Registration  Statement  also covers  such  indeterminate  number of  additional
shares of Common Stock as may become  issuable  upon  conversion of or otherwise
pursuant to the Notes and exercise of the Warrants to prevent dilution resulting
from stock splits, stock dividends or similar transactions. The number of shares
of Common Stock initially  included in such  Registration  Statement shall be no
less than an amount  equal to two (2) times the sum of the number of  Conversion
Shares  that are then  issuable  upon  conversion  of the  Notes  (based  on the
Variable  Conversion  Price as would then be in effect and assuming the Variable
Conversion  Price is the  Conversion  Price at such  time),  and the  number  of
Warrant  Shares that are then issuable  upon  exercise of the Warrants,  without
regard to any  limitation  on the  Investor's  ability to  convert  the Notes or
exercise  the  Warrants.  The  Company  acknowledges  that the  number of shares
initially  included  in the  Registration  Statement  represents  a  good  faith
estimate of the maximum number of shares  issuable upon  conversion of the Notes
and upon exercise of the Warrants.

               b.   UNDERWRITTEN   OFFERING.  If  any  offering  pursuant  to  a
Registration  Statement pursuant to Section 2(a) hereof involves an underwritten
offering,  the  Investors  who hold a majority in  interest  of the  Registrable
Securities  subject  to  such  underwritten  offering,  with  the  consent  of a
majority-in-interest  of the Initial  Investors,  shall have the right to select
one legal counsel and an investment banker or bankers and manager or managers to
administer  the  offering,  which  investment  banker or  bankers  or manager or
managers shall be reasonably satisfactory to the Company.

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               c.   PAYMENTS  BY THE  COMPANY.  The  Company  shall use its best
efforts  to  obtain  effectiveness  of the  Registration  Statement  as  soon as
practicable.  If (i) the  Registration  Statement(s)  covering  the  Registrable
Securities  required to be filed by the Company  pursuant to Section 2(a) hereof
is not filed by the Filing Date or declared  effective by the SEC on or prior to
ninety (90) days from the date of Closing (as defined in the Securities Purchase
Agreement), or (ii) after the Registration Statement has been declared effective
by the SEC, sales of all of the Registrable  Securities  cannot be made pursuant
to the  Registration  Statement,  or (iii)  the  Common  Stock is not  listed or
included for  quotation on the Nasdaq  National  Market  ("NASDAQ"),  the Nasdaq
SmallCap Market ("NASDAQ SMALLCAP"), the New York Stock Exchange (the "NYSE") or
the American  Stock  Exchange (the "AMEX") after being so listed or included for
quotation,  or (iv) the Common Stock ceases to be traded on the Over-the-Counter
Bulletin  Board (the "OTCBB") or any  equivalent  replacement  exchange prior to
being listed or included for  quotation  on one of the  aforementioned  markets,
then the Company will make payments to the Investors in such amounts and at such
times as shall be determined pursuant to this Section 2(c) as partial relief for
the  damages to the  Investors  by reason of any such delay in or  reduction  of
their  ability to sell the  Registrable  Securities  (which  remedy shall not be
exclusive  of any other  remedies  available  at law or in equity).  The Company
shall pay to each holder of the Notes or Registrable  Securities an amount equal
to the then  outstanding  principal  amount  of the Notes  (and,  in the case of
holders of Registrable Securities, the principal amount of Notes from which such
Registrable  Securities  were  converted)   ("OUTSTANDING   PRINCIPAL  AMOUNT"),
multiplied by the Applicable Percentage (as defined below) times the sum of: (i)
the number of months  (prorated for partial months) after the Filing Date or the
end of the  aforementioned  ninety  (90) day  period  and  prior to the date the
Registration Statement is declared effective by the SEC, provided, however, that
there  shall  be  excluded   from  such  period  any  delays  which  are  solely
attributable to changes required by the Investors in the Registration  Statement
with  respect to  information  relating  to the  Investors,  including,  without
limitation,  changes  to the  plan of  distribution,  or to the  failure  of the
Investors to conduct  their  review of the  Registration  Statement  pursuant to
Section  3(h) below in a  reasonably  prompt  manner;  (ii) the number of months
(prorated for partial  months) that sales of all of the  Registrable  Securities
cannot be made pursuant to the  Registration  Statement  after the  Registration
Statement has been declared effective (including, without limitation, when sales
cannot be made by reason of the  Company's  failure to  properly  supplement  or
amend the  prospectus  included  therein  in  accordance  with the terms of this
Agreement, but excluding any days during an Allowed Delay (as defined in Section
3(f));  and (iii) the number of months  (prorated  for partial  months) that the
Common  Stock is not listed or  included  for  quotation  on the OTCBB,  Nasdaq,
Nasdaq  SmallCap,  NYSE or AMEX or that  trading  thereon  is  halted  after the
Registration  Statement  has  been  declared  effective.  The  term  "APPLICABLE
PERCENTAGE"  means two  hundredths  (.02).  (For  example,  if the  Registration
Statement  becomes effective one (1) month after the end of such ninety (90) day
period, the Company would pay $5,000 for each $250,000 of Outstanding  Principal
Amount.  If  thereafter,  sales could not be made  pursuant to the  Registration
Statement  for an additional  period of one (1) month,  the Company would pay an
additional  $5,000 for each  $250,000 of  Outstanding  Principal  Amount.)  Such
amounts shall be paid in cash or, at the Company's  option,  in shares of Common
Stock priced at the  Conversion  Price (as defined in the Notes) on such payment
date.

               d.   PIGGY-BACK  REGISTRATIONS.  Subject to the last  sentence of
this Section  2(d), if at any time prior to the  expiration of the  Registration
Period (as hereinafter defined) the Company shall determine to file with the SEC

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a  Registration  Statement  relating to an  offering  for its own account or the
account of others under the 1933 Act of any of its equity securities (other than
on Form S-4 or Form S-8 or their then equivalents  relating to equity securities
to be issued solely in connection with any acquisition of any entity or business
or equity  securities  issuable in  connection  with stock  option or other bona
fide,  employee  benefit plans),  the Company shall send to each Investor who is
entitled to  registration  rights under this Section 2(d) written notice of such
determination  and, if within fifteen (15) days after the effective date of such
notice, such Investor shall so request in writing,  the Company shall include in
such Registration  Statement all or any part of the Registrable  Securities such
Investor  requests  to be  registered,  except that if, in  connection  with any
underwritten  public  offering  for the  account  of the  Company  the  managing
underwriter(s)  thereof  shall  impose a  limitation  on the number of shares of
Common Stock which may be included in the  Registration  Statement  because,  in
such  underwriter(s)'   judgment,   marketing  or  other  factors  dictate  such
limitation  is necessary to  facilitate  public  distribution,  then the Company
shall be obligated to include in such  Registration  Statement only such limited
portion of the  Registrable  Securities  with respect to which such Investor has
requested  inclusion hereunder as the underwriter shall permit. Any exclusion of
Registrable  Securities  shall be made pro rata among the  Investors  seeking to
include  Registrable  Securities  in  proportion  to the  number of  Registrable
Securities sought to be included by such Investors;  provided, however, that the
Company  shall not exclude  any  Registrable  Securities  unless the Company has
first excluded all outstanding securities, the holders of which are not entitled
to  inclusion  of such  securities  in such  Registration  Statement  or are not
entitled to pro rata inclusion with the  Registrable  Securities;  and provided,
further,  however,  that,  after  giving  effect  to the  immediately  preceding
proviso,  any exclusion of  Registrable  Securities  shall be made pro rata with
holders of other  securities  having the right to include such securities in the
Registration Statement other than holders of securities entitled to inclusion of
their securities in such Registration Statement by reason of demand registration
rights.  No right to registration of Registrable  Securities  under this Section
2(d) shall be construed to limit any  registration  required  under Section 2(a)
hereof.  If an  offering  in  connection  with which an  Investor is entitled to
registration  under this Section  2(d) is an  underwritten  offering,  then each
Investor  whose  Registrable   Securities  are  included  in  such  Registration
Statement shall,  unless  otherwise  agreed by the Company,  offer and sell such
Registrable Securities in an underwritten offering using the same underwriter or
underwriters and, subject to the provisions of this Agreement, on the same terms
and  conditions  as other shares of Common Stock  included in such  underwritten
offering.  Notwithstanding  anything  to the  contrary  set  forth  herein,  the
registration rights of the Investors pursuant to this Section 2(d) shall only be
available in the event the Company fails to timely file, obtain effectiveness or
maintain  effectiveness  of any  Registration  Statement to be filed pursuant to
Section 2(a) in accordance with the terms of this Agreement.

               e.   ELIGIBILITY  FOR FORM S-3,  SB-2 OR S-1;  CONVERSION TO FORM
S-3. The Company  represents and warrants that it meets the requirements for the
use of Form  S-3,  SB-2  or S-1  for  registration  of the  sale by the  Initial
Investors and any other  Investors of the  Registrable  Securities.  The Company
agrees to file all reports required to be filed by the Company with the SEC in a
timely manner so as to remain eligible or become  eligible,  as the case may be,
and  thereafter  to maintain  its  eligibility,  for the use of Form S-3. If the
Company  is not  currently  eligible  to use Form S-3,  not later  than five (5)
business days after the Company  first meets the  registration  eligibility  and
transaction  requirements  for the use of Form S-3 (or any  successor  form) for
registration  of the  offer  and sale by the  Initial  Investors  and any  other

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Investors  of  Registrable  Securities,  the Company  shall file a  Registration
Statement on Form S-3 (or such successor  form) with respect to the  Registrable
Securities  covered  by the  Registration  Statement  on Form  SB-2 or Form S-1,
whichever  is  applicable,  filed  pursuant to Section 2(a) (and include in such
Registration  Statement on Form S-3 the  information  required by Rule 429 under
the 1933 Act) or convert the  Registration  Statement  on Form SB-2 or Form S-1,
whichever is  applicable,  filed pursuant to Section 2(a) to a Form S-3 pursuant
to Rule 429 under the 1933 Act and cause such  Registration  Statement  (or such
amendment)  to be declared  effective no later than  forty-five  (45) days after
filing.  In the  event of a breach  by the  Company  of the  provisions  of this
Section 2(e), the Company will be required to make payments  pursuant to Section
2(c) hereof.

          3.   OBLIGATIONS OF THE COMPANY.

         In connection with the registration of the Registrable Securities,  the
Company shall have the following obligations:

               a.   The Company  shall prepare  promptly,  and file with the SEC
not later than the Filing Date,  a  Registration  Statement  with respect to the
number of  Registrable  Securities  provided in Section 2(a), and thereafter use
its best efforts to cause such  Registration  Statement  relating to Registrable
Securities to become  effective as soon as possible  after such filing but in no
event  later  than  ninety  (90)  days from the date of  Closing),  and keep the
Registration  Statement  effective  pursuant to Rule 415 at all times until such
date  as is  the  earlier  of (i)  the  date  on  which  all of the  Registrable
Securities have been sold and (ii) the date on which the Registrable  Securities
(in the opinion of counsel to the Initial  Investors) may be immediately sold to
the public without registration or restriction  (including,  without limitation,
as to  volume by each  holder  thereof)  under  the 1933 Act (the  "REGISTRATION
PERIOD"),  which Registration Statement (including any amendments or supplements
thereto  and  prospectuses  contained  therein)  shall not  contain  any  untrue
statement  of a material  fact or omit to state a material  fact  required to be
stated therein, or necessary to make the statements therein not misleading.

               b.   The  Company  shall  prepare  and  file  with  the SEC  such
amendments  (including   post-effective   amendments)  and  supplements  to  the
Registration   Statements  and  the  prospectus  used  in  connection  with  the
Registration  Statements as may be necessary to keep the Registration Statements
effective at all times during the Registration  Period, and, during such period,
comply with the  provisions of the 1933 Act with respect to the  disposition  of
all Registrable Securities of the Company covered by the Registration Statements
until such time as all of such  Registrable  Securities have been disposed of in
accordance  with the intended  methods of  disposition  by the seller or sellers
thereof as set forth in the Registration Statements.  In the event the number of
shares available under a Registration Statement filed pursuant to this Agreement
is insufficient to cover all of the  Registrable  Securities  issued or issuable
upon  conversion  of the Notes and exercise of the  Warrants,  the Company shall
amend the Registration  Statement,  or file a new Registration Statement (on the
short form available  therefor,  if applicable),  or both, so as to cover all of
the Registrable  Securities,  in each case, as soon as  practicable,  but in any
event within fifteen (15) days after the necessity therefor arises (based on the
market price of the Common Stock and other relevant factors on which the Company
reasonably elects to rely). The Company shall use its best efforts to cause such
amendment  and/or new  Registration  Statement  to become  effective  as soon as
practicable  following the filing  thereof,  but in any event within thirty (30)

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days  after  the date on which  the  Company  reasonably  first  determines  (or
reasonably should have determined) the need therefor.  The provisions of Section
2(c) above shall be applicable with respect to such obligation,  with the ninety
(90) days  running  from the day the Company  reasonably  first  determines  (or
reasonably should have determined) the need therefor.

               c.   The Company shall furnish to each Investor whose Registrable
Securities  are included in a  Registration  Statement and its legal counsel (i)
promptly  (but in no event more than two (2)  business  days)  after the same is
prepared  and  publicly  distributed,  filed with the SEC,  or  received  by the
Company, one copy of each Registration Statement and any amendment thereto, each
preliminary  prospectus and prospectus and each amendment or supplement thereto,
and, in the case of the Registration Statement referred to in Section 2(a), each
letter  written  by or on behalf of the  Company  to the SEC or the staff of the
SEC,  and each item of  correspondence  from the SEC or the staff of the SEC, in
each case relating to such Registration Statement (other than any portion of any
thereof which contains information for which the Company has sought confidential
treatment),  and (ii) promptly (but in no event more than two (2) business days)
after the Registration  Statement is declared  effective by the SEC, such number
of  copies  of  a  prospectus,  including  a  preliminary  prospectus,  and  all
amendments and supplements thereto and such other documents as such Investor may
reasonably  request in order to facilitate the  disposition  of the  Registrable
Securities  owned by such  Investor.  The Company will  immediately  notify each
Investor by facsimile of the effectiveness of each Registration Statement or any
post-effective  amendment.  The Company will promptly (but in no event more than
five (5) business  days)  respond to any and all comments  received from the SEC
(which comments shall promptly be made available to the Investors upon request),
with a view towards causing each Registration Statement or any amendment thereto
to be declared effective by the SEC as soon as practicable,  shall promptly file
an  acceleration  request as soon as practicable  (but in no event more than two
(2) business days) following the resolution or clearance of all SEC comments or,
if  applicable,  following  notification  by the SEC that any such  Registration
Statement  or any  amendment  thereto  will not be  subject  to review and shall
promptly file with the SEC a final  prospectus as soon as practicable (but in no
event more than two (2) business days) following receipt by the Company from the
SEC of an order declaring the Registration Statement effective.  In the event of
a breach by the Company of the provisions of this Section 3(c), the Company will
be required to make payments pursuant to Section 2(c) hereof.

               d.   The Company shall use reasonable efforts to (i) register and
qualify the Registrable Securities covered by the Registration  Statements under
such other  securities  or "blue sky" laws of such  jurisdictions  in the United
States as the  Investors  who hold a majority  in  interest  of the  Registrable
Securities  being  offered  reasonably  request,  (ii) prepare and file in those
jurisdictions  such  amendments   (including   post-effective   amendments)  and
supplements  to such  registrations  and  qualifications  as may be necessary to
maintain the effectiveness  thereof during the Registration  Period,  (iii) take
such other  actions as may be  necessary  to  maintain  such  registrations  and
qualifications in effect at all times during the Registration  Period,  and (iv)
take all  other  actions  reasonably  necessary  or  advisable  to  qualify  the
Registrable Securities for sale in such jurisdictions;  provided,  however, that
the  Company  shall not be required in  connection  therewith  or as a condition
thereto to (a)  qualify to do business  in any  jurisdiction  where it would not
otherwise be required to qualify but for this Section 3(d),  (b) subject  itself

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to general  taxation  in any such  jurisdiction,  (c) file a general  consent to
service of process in any such  jurisdiction,  (d) provide any undertakings that
cause the Company undue expense or burden, or (e) make any change in its charter
or bylaws,  which in each case the Board of Directors of the Company  determines
to be contrary to the best interests of the Company and its shareholders.

               e.   In the event  Investors who hold a  majority-in-interest  of
the Registrable Securities being offered in the offering (with the approval of a
majority-in-interest  of the  Initial  Investors)  select  underwriters  for the
offering,  the Company  shall enter into and  perform its  obligations  under an
underwriting  agreement,  in  usual  and  customary  form,  including,   without
limitation,  customary  indemnification and contribution  obligations,  with the
underwriters of such offering.

               f.   As  promptly as  practicable  after  becoming  aware of such
event,  the Company shall notify each Investor of the happening of any event, of
which the Company has knowledge, as a result of which the prospectus included in
any Registration Statement, as then in effect, includes an untrue statement of a
material fact or omission to state a material fact required to be stated therein
or necessary to make the  statements  therein not  misleading,  and use its best
efforts  promptly  to prepare a  supplement  or  amendment  to any  Registration
Statement to correct such untrue statement or omission,  and deliver such number
of copies of such  supplement or amendment to each Investor as such Investor may
reasonably  request;  provided  that,  for not more  than  ten (10)  consecutive
trading days (or a total of not more than twenty (20) trading days in any twelve
(12) month period),  the Company may delay the disclosure of material non-public
information  concerning  the  Company  (as well as  prospectus  or  Registration
Statement  updating)  the  disclosure  of which at the time is not,  in the good
faith opinion of the Company,  in the best interests of the Company (an "ALLOWED
DELAY");  provided,  further,  that the Company  shall  promptly  (i) notify the
Investors  in writing of the  existence  of (but in no event,  without the prior
written consent of an Investor,  shall the Company disclose to such investor any
of the facts or circumstances  regarding) material non-public information giving
rise to an Allowed  Delay and (ii) advise the  Investors in writing to cease all
sales under such Registration Statement until the end of the Allowed Delay. Upon
expiration of the Allowed  Delay,  the Company shall again be bound by the first
sentence  of this  Section  3(f) with  respect to the  information  giving  rise
thereto.

               g.   The  Company  shall  use its best  efforts  to  prevent  the
issuance  of  any  stop  order  or  other  suspension  of  effectiveness  of any
Registration  Statement,  and,  if  such an  order  is  issued,  to  obtain  the
withdrawal  of such order at the  earliest  possible  moment and to notify  each
Investor  who holds  Registrable  Securities  being sold (or, in the event of an
underwritten  offering, the managing underwriters) of the issuance of such order
and the resolution thereof.

               h.   The Company shall permit a single firm of counsel designated
by  the  Initial  Investors  to  review  such  Registration  Statement  and  all
amendments and supplements  thereto (as well as all requests for acceleration or
effectiveness  thereof) a  reasonable  period of time prior to their filing with
the SEC, and not file any  document in a form to which such  counsel  reasonably
objects and will not request acceleration of such Registration Statement without
prior  notice to such  counsel.  The  sections  of such  Registration  Statement
covering  information with respect to the Investors,  the Investor's  beneficial
ownership  of  securities  of the Company or the  Investors  intended  method of
disposition of Registrable  Securities shall conform to the information provided
to the Company by each of the Investors.

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               i.   The Company shall make  generally  available to its security
holders as soon as  practicable,  but not later than  ninety (90) days after the
close of the period covered  thereby,  an earnings  statement (in form complying
with the  provisions  of Rule 158 under the 1933 Act)  covering  a  twelve-month
period  beginning not later than the first day of the Company's  fiscal  quarter
next following the effective date of the Registration Statement.

               j.   At the request of any Investor,  the Company shall  furnish,
on the date that Registrable Securities are delivered to an underwriter, if any,
for sale in connection  with any  Registration  Statement or, if such securities
are not being sold by an underwriter,  on the date of effectiveness  thereof (i)
an opinion,  dated as of such date,  from counsel  representing  the Company for
purposes of such  Registration  Statement,  in form,  scope and  substance as is
customarily  given  in  an  underwritten  public  offering,   addressed  to  the
underwriters, if any, and the Investors and (ii) a letter, dated such date, from
the Company's  independent certified public accountants in form and substance as
is customarily given by independent certified public accountants to underwriters
in an underwritten public offering,  addressed to the underwriters,  if any, and
the Investors.

               k.   The Company shall make  available for  inspection by (i) any
Investor,  (ii) any underwriter  participating in any disposition  pursuant to a
Registration Statement,  (iii) one firm of attorneys and one firm of accountants
or other agents  retained by the Initial  Investors,  (iv) one firm of attorneys
and one firm of accountants or other agents retained by all other Investors, and
(v) one firm of attorneys retained by all such underwriters  (collectively,  the
"INSPECTORS") all pertinent financial and other records, and pertinent corporate
documents and properties of the Company,  including without limitation,  records
of conversions by other holders of convertible  securities issued by the Company
and  the  issuance  of  stock  to  such  holders  pursuant  to  the  conversions
(collectively,  the "RECORDS"),  as shall be reasonably deemed necessary by each
Inspector to enable each Inspector to exercise its due diligence responsibility,
and cause  the  Company's  officers,  directors  and  employees  to  supply  all
information which any Inspector may reasonably  request for purposes of such due
diligence;  provided,  however, that each Inspector shall hold in confidence and
shall not make any  disclosure  (except to an  Investor)  of any Record or other
information which the Company  determines in good faith to be confidential,  and
of which determination the Inspectors are so notified, unless (a) the disclosure
of such Records is necessary to avoid or correct a  misstatement  or omission in
any Registration Statement,  (b) the release of such Records is ordered pursuant
to a  subpoena  or other  order  from a court or  government  body of  competent
jurisdiction,  or (c) the  information  in such Records has been made  generally
available  to the public  other than by  disclosure  in violation of this or any
other agreement.  The Company shall not be required to disclose any confidential
information  in such Records to any  Inspector  until and unless such  Inspector
shall  have  entered  into  confidentiality  agreements  (in form and  substance
satisfactory   to  the  Company)   with  the  Company   with  respect   thereto,
substantially  in the form of this Section 3(k).  Each  Investor  agrees that it
shall,  upon learning that disclosure of such Records is sought in or by a court
or  governmental  body of competent  jurisdiction  or through other means,  give
prompt notice to the Company and allow the Company, at its expense, to undertake
appropriate  action to prevent  disclosure  of, or to obtain a protective  order
for,  the  Records  deemed  confidential.   Nothing  herein  (or  in  any  other
confidentiality  agreement between the Company and any Investor) shall be deemed
to limit the Investor's ability to sell Registrable Securities in a manner which
is otherwise consistent with applicable laws and regulations.

                                       8
<PAGE>

               l.   The  Company  shall  hold in  confidence  and not  make  any
disclosure of information  concerning an Investor provided to the Company unless
(i) disclosure of such  information is necessary to comply with federal or state
securities  laws, (ii) the disclosure of such  information is necessary to avoid
or correct a misstatement or omission in any Registration  Statement,  (iii) the
release of such  information  is ordered  pursuant  to a subpoena or other order
from a court  or  governmental  body of  competent  jurisdiction,  or (iv)  such
information  has been made  generally  available  to the  public  other  than by
disclosure in violation of this or any other agreement.  The Company agrees that
it shall,  upon  learning  that  disclosure  of such  information  concerning an
Investor  is  sought  in  or  by a  court  or  governmental  body  of  competent
jurisdiction  or through other means,  give prompt notice to such Investor prior
to making such disclosure,  and allow the Investor, at its expense, to undertake
appropriate  action to prevent  disclosure  of, or to obtain a protective  order
for, such information.

               m.   The Company shall (i) cause all the  Registrable  Securities
covered by the Registration  Statement to be listed on each national  securities
exchange on which  securities  of the same class or series issued by the Company
are then listed,  if any, if the listing of such Registrable  Securities is then
permitted under the rules of such exchange, or (ii) to the extent the securities
of the same  class  or  series  are not then  listed  on a  national  securities
exchange,   secure  the  designation  and  quotation,  of  all  the  Registrable
Securities  covered by the Registration  Statement on Nasdaq or, if not eligible
for  Nasdaq,  on  Nasdaq  SmallCap  or,  if not  eligible  for  Nasdaq or Nasdaq
SmallCap, on the OTCBB and, without limiting the generality of the foregoing, to
arrange for at least two market makers to register with the National Association
of Securities  Dealers,  Inc.  ("NASD") as such with respect to such Registrable
Securities.

               n.   The Company  shall provide a transfer  agent and  registrar,
which may be a single entity, for the Registrable  Securities not later than the
effective date of the Registration Statement.

               o.   The Company  shall  cooperate  with the  Investors  who hold
Registrable   Securities   being  offered  and  the  managing   underwriter   or
underwriters,  if any, to  facilitate  the timely  preparation  and  delivery of
certificates  (not bearing any  restrictive  legends)  representing  Registrable
Securities to be offered  pursuant to a  Registration  Statement and enable such
certificates to be in such denominations or amounts,  as the case may be, as the
managing  underwriter or  underwriters,  if any, or the Investors may reasonably
request  and   registered  in  such  names  as  the  managing   underwriter   or
underwriters,  if any, or the  Investors  may  request,  and,  within  three (3)
business  days  after  a  Registration   Statement  which  includes  Registrable
Securities is ordered effective by the SEC, the Company shall deliver, and shall
cause legal counsel  selected by the Company to deliver,  to the transfer  agent
for the Registrable  Securities (with copies to the Investors whose  Registrable
Securities  are included in such  Registration  Statement) an instruction in the
form  attached  hereto as EXHIBIT 1 and an  opinion of such  counsel in the form
attached hereto as EXHIBIT 2.

                                       9
<PAGE>

p. At the request of the holders of a  majority-in-interest  of the  Registrable
Securities,  the Company  shall  prepare  and file with the SEC such  amendments
(including   post-effective   amendments)  and  supplements  to  a  Registration
Statement and any prospectus used in connection with the Registration  Statement
as may be  necessary  in order to change the plan of  distribution  set forth in
such Registration Statement.

q. From and after the date of this  Agreement,  the Company shall not, and shall
not agree to, allow the holders of any  securities of the Company to include any
of their securities in any  Registration  Statement under Section 2(a) hereof or
any  amendment or  supplement  thereto  under  Section  3(b) hereof  without the
consent of the holders of a majority-in-interest of the Registrable Securities.

r. The Company shall take all other reasonable actions necessary to expedite and
facilitate  disposition by the Investors of Registrable Securities pursuant to a
Registration Statement.

          4.   OBLIGATIONS OF THE INVESTORS.

         In connection with the registration of the Registrable Securities,  the
Investors shall have the following obligations:

               a.   It shall be a condition  precedent to the obligations of the
Company to complete the registration  pursuant to this Agreement with respect to
the  Registrable  Securities of a particular  Investor that such Investor  shall
furnish to the  Company  such  information  regarding  itself,  the  Registrable
Securities  held by it and the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to effect the registration
of such  Registrable  Securities  and shall execute such documents in connection
with such registration as the Company may reasonably request. At least three (3)
business  days prior to the first  anticipated  filing date of the  Registration
Statement, the Company shall notify each Investor of the information the Company
requires from each such Investor.

               b.   Each  Investor,   by  such  Investor's   acceptance  of  the
Registrable  Securities,  agrees to  cooperate  with the  Company as  reasonably
requested by the Company in connection  with the  preparation  and filing of the
Registration Statements hereunder, unless such Investor has notified the Company
in  writing  of such  Investor's  election  to  exclude  all of such  Investor's
Registrable Securities from the Registration Statements.

               c.   In the event Investors holding a majority-in-interest of the
Registrable  Securities  being  registered  (with the  approval  of the  Initial
Investors)  determine to engage the services of an  underwriter,  each  Investor
agrees  to  enter  into  and  perform  such  Investor's   obligations  under  an
underwriting  agreement,  in  usual  and  customary  form,  including,   without
limitation,  customary  indemnification and contribution  obligations,  with the
managing  underwriter  of such  offering  and take  such  other  actions  as are
reasonably  required in order to expedite or facilitate  the  disposition of the
Registrable Securities, unless such Investor has notified the Company in writing
of such  Investor's  election  to  exclude  all of such  Investor's  Registrable
Securities from such Registration Statement.

                                       10
<PAGE>

               d.   Each Investor  agrees that,  upon receipt of any notice from
the Company of the happening of any event of the kind  described in Section 3(f)
or 3(g), such Investor will immediately  discontinue  disposition of Registrable
Securities  pursuant to the  Registration  Statement  covering such  Registrable
Securities  until such Investor's  receipt of the copies of the  supplemented or
amended  prospectus  contemplated by Section 3(f) or 3(g) and, if so directed by
the Company,  such Investor  shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a  certificate  of  destruction)
all  copies in such  Investor's  possession,  of the  prospectus  covering  such
Registrable Securities current at the time of receipt of such notice.

               e.   No Investor may participate in any underwritten registration
hereunder  unless such Investor (i) agrees to sell such  Investor's  Registrable
Securities on the basis provided in any  underwriting  arrangements in usual and
customary  form  entered into by the Company,  (ii)  completes  and executes all
questionnaires,  powers of attorney,  indemnities,  underwriting  agreements and
other  documents  reasonably  required  under  the  terms  of such  underwriting
arrangements,  and (iii)  agrees to pay its pro rata  share of all  underwriting
discounts  and  commissions  and any expenses in excess of those  payable by the
Company pursuant to Section 5 below.

          5.   EXPENSES OF REGISTRATION.

         All  reasonable  expenses,   other  than  underwriting   discounts  and
commissions,   incurred   in   connection   with   registrations,   filings   or
qualifications pursuant to Sections 2 and 3, including,  without limitation, all
registration,  listing and qualification fees, printers and accounting fees, the
fees and  disbursements of counsel for the Company,  and the reasonable fees and
disbursements  of one  counsel  selected by the  Initial  Investors  pursuant to
Sections 2(b) and 3(h) hereof shall be borne by the Company.

          6.   INDEMNIFICATION.

         In the event any Registrable  Securities are included in a Registration
Statement under this Agreement:

          a.   To the extent permitted by law, the Company will indemnify,  hold
harmless  and defend (i) each  Investor who holds such  Registrable  Securities,
(ii) the directors,  officers,  partners,  employees, agents and each person who
controls  any  Investor  within the  meaning  of the 1933 Act or the  Securities
Exchange Act of 1934, as amended (the "1934 ACT"), if any, (iii) any underwriter
(as  defined  in the 1933  Act)  for the  Investors,  and  (iv)  the  directors,
officers,  partners, employees and each person who controls any such underwriter
within  the  meaning  of the  1933  Act or  the  1934  Act,  if  any  (each,  an
"INDEMNIFIED  PERSON"),  against any joint or several losses,  claims,  damages,
liabilities  or expenses  (collectively,  together with actions,  proceedings or
inquiries by any regulatory or self-regulatory  organization,  whether commenced
or  threatened,  in respect  thereof,  "CLAIMS") to which any of them may become
subject  insofar as such Claims  arise out of or are based upon:  (i) any untrue
statement  or alleged  untrue  statement  of a material  fact in a  Registration
Statement or the omission or alleged  omission to state  therein a material fact
required  to  be  stated  or  necessary  to  make  the  statements  therein  not
misleading;  (ii) any untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus if used prior to the effective date

                                       11
<PAGE>

of such Registration Statement, or contained in the final prospectus (as amended
or  supplemented,  if the  Company  files any  amendment  thereof or  supplement
thereto with the SEC) or the omission or alleged  omission to state  therein any
material fact  necessary to make the  statements  made therein,  in light of the
circumstances  under which the statements therein were made, not misleading;  or
(iii) any  violation  or alleged  violation  by the Company of the 1933 Act, the
1934 Act, any other law,  including,  without  limitation,  any state securities
law, or any rule or regulation  thereunder  relating to the offer or sale of the
Registrable  Securities (the matters in the foregoing  clauses (i) through (iii)
being,  collectively,  "Violations").  Subject to the  restrictions set forth in
Section  6(c) with  respect to the number of legal  counsel,  the Company  shall
reimburse the Indemnified Person, promptly as such expenses are incurred and are
due and payable,  for any  reasonable  legal fees or other  reasonable  expenses
incurred by them in connection with  investigating  or defending any such Claim.
Notwithstanding  anything to the contrary contained herein, the  indemnification
agreement contained in this Section 6(a): (i) shall not apply to a Claim arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information  furnished in writing to the Company by any Indemnified  Person
or underwriter for such Indemnified  Person expressly for use in connection with
the preparation of such Registration  Statement or any such amendment thereof or
supplement  thereto, if such prospectus was timely made available by the Company
pursuant  to  Section  3(c)  hereof;  (ii)  shall not apply to  amounts  paid in
settlement of any Claim if such settlement is effected without the prior written
consent of the Company,  which consent shall not be unreasonably  withheld;  and
(iii) with respect to any preliminary prospectus, shall not inure to the benefit
of any Indemnified  Person if the untrue  statement or omission of material fact
contained in the  preliminary  prospectus was corrected on a timely basis in the
prospectus,  as then amended or  supplemented,  such  corrected  prospectus  was
timely made  available by the Company  pursuant to Section 3(c) hereof,  and the
Indemnified  Person was  promptly  advised in writing  not to use the  incorrect
prospectus  prior to the use giving  rise to a  Violation  and such  Indemnified
Person,  notwithstanding  such advice,  used it. Such indemnity  shall remain in
full force and effect  regardless of any  investigation  made by or on behalf of
the  Indemnified  Person  and shall  survive  the  transfer  of the  Registrable
Securities by the Investors pursuant to Section 9.

               b.   In connection  with any  Registration  Statement in which an
Investor is  participating,  each such Investor agrees severally and not jointly
to  indemnify,  hold  harmless  and  defend,  to the same extent and in the same
manner set forth in Section 6(a), the Company,  each of its  directors,  each of
its  officers who signs the  Registration  Statement,  each person,  if any, who
controls  the Company  within the  meaning of the 1933 Act or the 1934 Act,  any
underwriter  and  any  other  shareholder  selling  securities  pursuant  to the
Registration  Statement  or any of its  directors  or officers or any person who
controls such  shareholder or underwriter  within the meaning of the 1933 Act or
the  1934  Act  (collectively  and  together  with  an  Indemnified  Person,  an
"INDEMNIFIED PARTY"), against any Claim to which any of them may become subject,
under the 1933 Act, the 1934 Act or otherwise,  insofar as such Claim arises out
of or is based upon any Violation by such  Investor,  in each case to the extent
(and only to the extent)  that such  Violation  occurs in  reliance  upon and in
conformity  with written  information  furnished to the Company by such Investor
expressly for use in connection with such Registration Statement; and subject to
Section 6(c) such Investor will reimburse any legal or other expenses  (promptly
as such  expenses are incurred and are due and payable)  reasonably  incurred by
them in connection  with  investigating  or defending any such Claim;  provided,

                                       12
<PAGE>

however,  that the indemnity  agreement contained in this Section 6(b) shall not
apply to amounts paid in settlement of any Claim if such  settlement is effected
without the prior written  consent of such Investor,  which consent shall not be
unreasonably withheld;  provided,  further,  however, that the Investor shall be
liable under this Agreement (including this Section 6(b) and Section 7) for only
that amount as does not exceed the net proceeds to such  Investor as a result of
the sale of Registrable Securities pursuant to such Registration Statement. Such
indemnity shall remain in full force and effect  regardless of any investigation
made by or on behalf of such Indemnified Party and shall survive the transfer of
the   Registrable   Securities   by  the   Investors   pursuant  to  Section  9.
Notwithstanding  anything to the contrary contained herein, the  indemnification
agreement  contained  in this  Section  6(b)  with  respect  to any  preliminary
prospectus shall not inure to the benefit of any Indemnified Party if the untrue
statement or omission of material fact contained in the  preliminary  prospectus
was  corrected  on a  timely  basis  in  the  prospectus,  as  then  amended  or
supplemented.

               c.   Promptly   after  receipt  by  an   Indemnified   Person  or
Indemnified  Party  under this  Section 6 of notice of the  commencement  of any
action  (including  any  governmental   action),   such  Indemnified  Person  or
Indemnified Party shall, if a Claim in respect thereof is to be made against any
indemnifying  party under this  Section 6, deliver to the  indemnifying  party a
written notice of the commencement  thereof,  and the  indemnifying  party shall
have the right to participate in, and, to the extent the  indemnifying  party so
desires,  jointly with any other indemnifying party similarly noticed, to assume
control  of the  defense  thereof  with  counsel  mutually  satisfactory  to the
indemnifying  party and the Indemnified  Person or the Indemnified Party, as the
case may be; provided,  however, that an Indemnified Person or Indemnified Party
shall have the right to retain its own counsel  with the fees and expenses to be
paid by the  indemnifying  party,  if,  in the  reasonable  opinion  of  counsel
retained by the indemnifying  party, the  representation  by such counsel of the
Indemnified  Person or  Indemnified  Party and the  indemnifying  party would be
inappropriate  due to actual  or  potential  differing  interests  between  such
Indemnified  Person or Indemnified Party and any other party represented by such
counsel  in such  proceeding.  The  indemnifying  party  shall  pay for only one
separate legal counsel for the Indemnified  Persons or the Indemnified  Parties,
as applicable,  and such legal counsel shall be selected by Investors  holding a
majority-in-interest  of the Registrable Securities included in the Registration
Statement   to   which   the   Claim   relates   (with   the   approval   of   a
majority-in-interest of the Initial Investors), if the Investors are entitled to
indemnification  hereunder,  or the  Company,  if the  Company  is  entitled  to
indemnification  hereunder, as applicable. The failure to deliver written notice
to the  indemnifying  party within a reasonable time of the  commencement of any
such action shall not relieve such  indemnifying  party of any  liability to the
Indemnified  Person or  Indemnified  Party  under this  Section 6, except to the
extent  that the  indemnifying  party is actually  prejudiced  in its ability to
defend such action. The indemnification required by this Section 6 shall be made
by  periodic   payments  of  the  amount   thereof  during  the  course  of  the
investigation or defense, as such expense, loss, damage or liability is incurred
and is due and payable.

                                       13
<PAGE>

          7.   CONTRIBUTION.

         To  the  extent  any   indemnification  by  an  indemnifying  party  is
prohibited or limited by law, the indemnifying  party agrees to make the maximum
contribution  with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided,  however, that
(i) no contribution shall be made under  circumstances where the maker would not
have been  liable for  indemnification  under the fault  standards  set forth in
Section  6, (ii) no  seller  of  Registrable  Securities  guilty  of  fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution  from any seller of Registrable  Securities who was not
guilty of such fraudulent  misrepresentation,  and  (iii)contribution  (together
with any  indemnification  or other  obligations  under this  Agreement)  by any
seller of Registrable Securities shall be limited in amount to the net amount of
proceeds received by such seller from the sale of such Registrable Securities.

          8.   REPORTS UNDER THE 1934 ACT.

         With a view to making  available to the  Investors the benefits of Rule
144  promulgated  under the 1933 Act or any other  similar rule or regulation of
the SEC that may at any time  permit the  investors  to sell  securities  of the
Company to the public without registration ("RULE 144"), the Company agrees to:

               a.   make and keep public information  available,  as those terms
are understood and defined in Rule 144;

               b.   file with the SEC in a timely  manner all  reports and other
documents required of the Company under the 1933 Act and the 1934 Act so long as
the Company  remains  subject to such  requirements  (it being  understood  that
nothing herein shall limit the Company's  obligations  under Section 4(c) of the
Securities  Purchase  Agreement)  and the  filing  of  such  reports  and  other
documents is required for the applicable provisions of Rule 144; and

               c.   furnish  to each  Investor  so long  as such  Investor  owns
Registrable  Securities,  promptly upon request,  (i) a written statement by the
Company that it has complied  with the reporting  requirements  of Rule 144, the
1933 Act and the 1934 Act,  (ii) a copy of the most recent  annual or  quarterly
report of the  Company  and such other  reports  and  documents  so filed by the
Company,  and (iii) such other  information  as may be  reasonably  requested to
permit  the  Investors  to sell such  securities  pursuant  to Rule 144  without
registration.

          9.   ASSIGNMENT OF REGISTRATION RIGHTS.

         The rights under this Agreement  shall be  automatically  assignable by
the Investors to any transferee of all or any portion of Registrable  Securities
if: (i) the Investor agrees in writing with the transferee or assignee to assign
such rights,  and a copy of such  agreement is furnished to the Company within a
reasonable time after such assignment,  (ii) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of (a) the
name and address of such  transferee or assignee,  and (b) the  securities  with
respect to which such  registration  rights are being  transferred  or assigned,
(iii)  following  such transfer or assignment,  the further  disposition of such
securities by the  transferee  or assignee is restricted  under the 1933 Act and

                                       14
<PAGE>

applicable  state  securities  laws,  (iv) at or  before  the time  the  Company
receives the written notice  contemplated  by clause (ii) of this sentence,  the
transferee or assignee  agrees in writing with the Company to be bound by all of
the  provisions  contained  herein,  (v) such  transfer  shall have been made in
accordance  with  the  applicable   requirements  of  the  Securities   Purchase
Agreement,  and (vi) such transferee  shall be an "ACCREDITED  INVESTOR" as that
term defined in Rule 501 of Regulation D promulgated under the 1933 Act.

          10.  AMENDMENT OF REGISTRATION RIGHTS.

         Provisions of this Agreement may be amended and the observance  thereof
may  be  waived  (either  generally  or  in a  particular  instance  and  either
retroactively or prospectively),  only with written consent of the Company, each
of the  Initial  Investors  (to the  extent  such  Initial  Investor  still owns
Registrable  Securities)  and  Investors  who hold a  majority  interest  of the
Registrable Securities. Any amendment or waiver effected in accordance with this
Section 10 shall be binding upon each Investor and the Company.

          11.  MISCELLANEOUS.

               a.   A person or  entity is deemed to be a holder of  Registrable
Securities  whenever  such  person or entity  owns of  record  such  Registrable
Securities.  If  the  Company  receives  conflicting  instructions,  notices  or
elections  from  two or more  persons  or  entities  with  respect  to the  same
Registrable  Securities,  the Company shall act upon the basis of  instructions,
notice  or  election  received  from the  registered  owner of such  Registrable
Securities.

               b.   Any  notices  required  or  permitted  to be given under the
terms  hereof  shall be sent by certified  or  registered  mail (return  receipt
requested)  or  delivered  personally  or by  courier  (including  a  recognized
overnight  delivery  service) or by facsimile  and shall be effective  five days
after being placed in the mail, if mailed by regular United States mail, or upon
receipt, if delivered personally or by courier (including a recognized overnight
delivery  service)  or by  facsimile,  in each case  addressed  to a party.  The
addresses for such communications shall be:

               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

                                       15
<PAGE>

               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 an Investor:  to the address set forth  immediately  below such Investor's
name on the signature pages to the Securities Purchase Agreement.

               With a copy to:

               Ballard Spahr Andrews & Ingersoll, LLP
               1735 Market Street
               51st Floor
               Philadelphia, Pennsylvania  19103
               Attention:  Gerald J. Guarcini, Esq.
               Telephone:  215-865-8625
               Facsimile:  215-864-8999
               Email:  guarcini@ballardspahr.com

               c.   Failure of any party to exercise  any right or remedy  under
this  Agreement or otherwise,  or delay by a party in  exercising  such right or
remedy, shall not operate as a waiver thereof.

               d.   THIS AGREEMENT SHALL BE ENFORCED,  GOVERNED BY AND CONSTRUED
IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW YORK  APPLICABLE TO AGREEMENTS
MADE AND TO BE  PERFORMED  ENTIRELY  WITHIN  SUCH STATE,  WITHOUT  REGARD TO THE
PRINCIPLES  OF  CONFLICT  OF LAWS.  THE  PARTIES  HERETO  HEREBY  SUBMIT  TO THE
EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED NEW YORK, NEW
YORK WITH RESPECT TO ANY DISPUTE  ARISING UNDER THIS  AGREEMENT,  THE AGREEMENTS
ENTERED INTO IN CONNECTION  HEREWITH OR THE TRANSACTIONS  CONTEMPLATED HEREBY OR
THEREBY.  BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO
THE  MAINTENANCE  OF SUCH SUIT OR  PROCEEDING.  BOTH PARTIES  FURTHER AGREE THAT
SERVICE OF PROCESS  UPON A PARTY  MAILED BY FIRST  CLASS MAIL SHALL BE DEEMED IN
EVERY  RESPECT  EFFECTIVE  SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY  OTHER  MANNER   PERMITTED  BY  LAW.   BOTH  PARTIES   AGREE  THAT  A  FINAL
NON-APPEALABLE  JUDGMENT IN ANY SUCH SUIT OR PROCEEDING  SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER  JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL  MANNER.  THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE  ARISING  UNDER
THIS  AGREEMENT  SHALL  BE  RESPONSIBLE  FOR ALL FEES  AND  EXPENSES,  INCLUDING
ATTORNEYS'  FEES,  INCURRED  BY THE  PREVAILING  PARTY IN  CONNECTION  WITH SUCH
DISPUTE.

                                       16
<PAGE>

               e.   In the event that any provision of this Agreement is invalid
or  unenforceable  under  any  applicable  statute  or rule of  law,  then  such
provision  shall  be  deemed  inoperative  to the  extent  that it may  conflict
therewith  and shall be deemed  modified to conform with such statute or rule of
law. Any provision hereof which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision hereof.

               f.   This Agreement,  the Notes,  the Warrants and the Securities
Purchase Agreement (including all schedules and exhibits thereto) constitute the
entire  agreement  among the parties  hereto with respect to the subject  matter
hereof  and  thereof.  There  are  no  restrictions,   promises,  warranties  or
undertakings, other than those set forth or referred to herein and therein. This
Agreement and the Securities  Purchase Agreement  supersede all prior agreements
and  understandings  among the parties hereto with respect to the subject matter
hereof and thereof.

               g.   Subject  to the  requirements  of  Section  9  hereof,  this
Agreement  shall be binding  upon and inure to the  benefit of the  parties  and
their successors and assigns.

               h.   The  headings  in  this  Agreement  are for  convenience  of
reference only and shall not form part of, or affect the interpretation of, this
Agreement.

               i.   This Agreement may be executed in two or more  counterparts,
each of which shall be deemed an original but all of which shall  constitute one
and the same agreement and shall become  effective when  counterparts  have been
signed by each party and  delivered to the other  party.  This  Agreement,  once
executed by a party,  may be  delivered  to the other party  hereto by facsimile
transmission  of a copy of this Agreement  bearing the signature of the party so
delivering this Agreement.

               j.   Each  party  shall do and  perform,  or cause to be done and
performed,  all such further acts and things,  and shall execute and deliver all
such other  agreements,  certificates,  instruments and documents,  as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

               k.   Except as otherwise  provided herein, all consents and other
determinations  to be made by the Investors  pursuant to this Agreement shall be
made by Investors holding a majority of the Registrable  Securities,  determined
as if the all of the  Notes  then  outstanding  have  been  converted  into  for
Registrable Securities.

               l.   The  Company  acknowledges  that  a  breach  by  it  of  its
obligations  hereunder will cause irreparable harm to each Investor by vitiating
the intent and purpose of the transactions contemplated hereby. Accordingly, the
Company  acknowledges that the remedy at law for breach of its obligations under
this  Agreement  will be  inadequate  and  agrees,  in the  event of a breach or
threatened  breach by the Company of any of the provisions under this Agreement,
that each  Investor  shall be  entitled,  in  addition  to all  other  available
remedies  in law or in  equity,  and in  addition  to the  penalties  assessable

                                       17
<PAGE>

herein,  to an injunction or injunctions  restraining,  preventing or curing any
breach of this  Agreement and to enforce  specifically  the terms and provisions
hereof,  without the necessity of showing  economic loss and without any bond or
other security being required.

               m.   The language used in this Agreement will be deemed to be the
language  chosen by the parties to express their mutual intent,  and no rules of
strict construction will be applied against any party.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       18
<PAGE>

         IN WITNESS WHEREOF,  the Company and the undersigned  Initial Investors
have  caused  this  Agreement  to be duly  executed  as of the date first  above
written.

QT 5, INC.

----------------------------------------
Timothy J. Owens
Chief Executive Officer

AJW PARTNERS, LLC
By:  SMS Group, LLC

----------------------------------------
Corey S. Ribotsky
Manager

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

----------------------------------------
Corey S. Ribotsky
Manager

AJW QUALIFIED PARTNERS, LLC
By:  AJW Manager, LLC

----------------------------------------
Corey S. Ribotsky
Manager

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

----------------------------------------
Corey S. Ribotsky
Manager

                                       19Exhibit 10.3

         THIS WARRANT AND THE SHARES  ISSUABLE UPON THE EXERCISE OF THIS WARRANT
         HAVE NOT BEEN REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
         EXCEPT AS  OTHERWISE  SET  FORTH  HEREIN  OR IN A  SECURITIES  PURCHASE
         AGREEMENT DATED AS OF AUGUST 12, 2004,  NEITHER THIS WARRANT NOR ANY OF
         SUCH SHARES MAY BE SOLD,  TRANSFERRED  OR ASSIGNED IN THE ABSENCE OF AN
         EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER SAID ACT OR,
         AN OPINION OF COUNSEL,  IN FORM,  SUBSTANCE  AND SCOPE,  CUSTOMARY  FOR
         OPINIONS OF COUNSEL IN COMPARABLE  TRANSACTIONS,  THAT  REGISTRATION IS
         NOT  REQUIRED  UNDER SUCH ACT OR UNLESS  SOLD  PURSUANT  TO RULE 144 OR
         REGULATION S UNDER SUCH ACT.

                                                                Right to
                                                                Purchase 240,000
                                                                Shares of Common
                                                                Stock, $.001 par
                                                                value per share

                             STOCK PURCHASE WARRANT

         THIS  CERTIFIES  THAT,  for value  received,  AJW PARTNERS,  LLC or its
registered  assigns,  is  entitled  to  purchase  from QT 5,  Inc.,  a  Delaware
corporation (the "Company"),  at any time or from time to time during the period
specified in Paragraph 2 hereof, Two Hundred Forty Thousand (240,000) fully paid
and  nonassessable  shares of the Company's  Common  Stock,  $.001 par value per
share (the "Common Stock"),  at an exercise price per share equal to $.0056 (the
"Exercise  Price").  The term  "Warrant  Shares," as used herein,  refers to the
shares of  Common  Stock  purchasable  hereunder.  The  Warrant  Shares  and the
Exercise Price are subject to adjustment as provided in Paragraph 4 hereof.  The
term  "Warrants"  means this Warrant and the other warrants  issued  pursuant to
that certain Securities Purchase Agreement,  dated August 12, 2004, by and among
the Company and the Buyers listed on the execution page thereof (the "Securities
Purchase Agreement").

          This  Warrant is  subject  to the  following  terms,  provisions,  and
conditions:

          1.   MANNER OF EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
Subject to the  provisions  hereof,  this Warrant may be exercised by the holder
hereof,  in whole or in part, by the surrender of this Warrant,  together with a
completed  exercise  agreement  in  the  form  attached  hereto  (the  "Exercise
Agreement"),  to the Company during normal business hours on any business day at
the Company's principal executive offices (or such other office or agency of the
Company  as it may  designate  by notice  to the  holder  hereof),  and upon (i)
payment to the Company in cash,  by certified or official  bank check or by wire

<PAGE>

transfer  for the account of the Company of the  Exercise  Price for the Warrant
Shares specified in the Exercise  Agreement or (ii) if the resale of the Warrant
Shares  by  the  holder  is  not  then  registered   pursuant  to  an  effective
registration  statement  under  the  Securities  Act of 1933,  as  amended  (the
"Securities Act"), delivery to the Company of a written notice of an election to
effect a "Cashless Exercise" (as defined in Section 11(c) below) for the Warrant
Shares  specified in the  Exercise  Agreement.  The Warrant  Shares so purchased
shall be deemed to be issued to the holder hereof or such holder's designee,  as
the record  owner of such  shares,  as of the close of  business  on the date on
which this Warrant shall have been surrendered, the completed Exercise Agreement
shall have been  delivered,  and payment shall have been made for such shares as
set forth above. Certificates for the Warrant Shares so purchased,  representing
the aggregate  number of shares  specified in the Exercise  Agreement,  shall be
delivered to the holder hereof within a reasonable time, not exceeding three (3)
business days, after this Warrant shall have been so exercised. The certificates
so delivered  shall be in such  denominations  as may be requested by the holder
hereof and shall be  registered in the name of such holder or such other name as
shall be  designated by such holder.  If this Warrant shall have been  exercised
only in part, then,  unless this Warrant has expired,  the Company shall, at its
expense,  at the time of delivery of such certificates,  deliver to the holder a
new Warrant representing the number of shares with respect to which this Warrant
shall not then have been exercised.  In addition to all other available remedies
at law or in  equity,  if the  Company  fails to  deliver  certificates  for the
Warrant  Shares  within three (3) business days after this Warrant is exercised,
then the Company shall pay to the holder in cash a penalty (the "Penalty") equal
to 2% of the number of Warrant  Shares that the holder is entitled to multiplied
by the Market Price (as hereinafter defined) for each day that the Company fails
to deliver  certificates for the Warrant Shares.  For example,  if the holder is
entitled  to 100,000  Warrant  Shares and the  Market  Price is $2.00,  then the
Company  shall pay to the holder  $4,000 for each day that the Company  fails to
deliver  certificates  for the Warrant Shares.  The Penalty shall be paid to the
holder  by the  fifth  day of the  month  following  the  month  in which it has
accrued.

          Notwithstanding  anything in this Warrant to the contrary, in no event
shall the holder of this  Warrant be  entitled  to exercise a number of Warrants
(or portions  thereof) in excess of the number of Warrants (or portions thereof)
upon  exercise  of which the sum of (i) the  number  of  shares of Common  Stock
beneficially owned by the holder and its affiliates (other than shares of Common
Stock  which may be deemed  beneficially  owned  through  the  ownership  of the
unexercised  Warrants and the  unexercised or  unconverted  portion of any other
securities  of the Company  (including  the Notes (as defined in the  Securities
Purchase Agreement)) subject to a limitation on conversion or exercise analogous
to the  limitation  contained  herein)  and (ii) the  number of shares of Common
Stock issuable upon exercise of the Warrants (or portions  thereof) with respect
to which the  determination  described  herein is being  made,  would  result in
beneficial  ownership by the holder and its  affiliates of more than 4.9% of the
outstanding  shares of Common Stock.  For purposes of the immediately  preceding
sentence,  beneficial  ownership  shall be determined in accordance with Section
13(d) of the Securities  Exchange Act of 1934, as amended,  and Regulation 13D-G
thereunder,  except  as  otherwise  provided  in  clause  (i) of  the  preceding
sentence.  Notwithstanding  anything  to  the  contrary  contained  herein,  the
limitation  on  exercise  of this  Warrant  set forth  herein may not be amended
without  (i) the written  consent of the holder  hereof and the Company and (ii)
the approval of a majority of shareholders of the Company.

                                      -2-
<PAGE>

          2.   PERIOD OF EXERCISE.  This Warrant is  exercisable  at any time or
from  time to time on or after the date on which  this  Warrant  is  issued  and
delivered pursuant to the terms of the Securities  Purchase Agreement and before
6:00 p.m., New York, New York time on the fifth (5th) anniversary of the date of
issuance (the "Exercise Period").

          3.   CERTAIN  AGREEMENTS OF THE COMPANY.  The Company hereby covenants
and agrees as follows:

               (a)  SHARES TO BE FULLY  PAID.  All  Warrant  Shares  will,  upon
issuance in accordance with the terms of this Warrant, be validly issued,  fully
paid, and nonassessable and free from all taxes, liens, and charges with respect
to the issue thereof.

               (b)  RESERVATION  OF SHARES.  During  the  Exercise  Period,  the
Company  shall at all times have  authorized,  and  reserved  for the purpose of
issuance upon exercise of this Warrant,  a sufficient number of shares of Common
Stock to provide for the exercise of this Warrant.

               (c)  LISTING.  The Company shall  promptly  secure the listing of
the shares of Common  Stock  issuable  upon  exercise of the  Warrant  upon each
national  securities  exchange or automated quotation system, if any, upon which
shares of Common Stock are then listed  (subject to official  notice of issuance
upon exercise of this Warrant) and shall  maintain,  so long as any other shares
of Common  Stock shall be so listed,  such listing of all shares of Common Stock
from time to time issuable  upon the exercise of this  Warrant;  and the Company
shall  so list on each  national  securities  exchange  or  automated  quotation
system, as the case may be, and shall maintain such listing of, any other shares
of capital  stock of the Company  issuable  upon the exercise of this Warrant if
and so long as any  shares of the same  class  shall be listed on such  national
securities exchange or automated quotation system.

               (d)  CERTAIN  ACTIONS  PROHIBITED.   The  Company  will  not,  by
amendment  of its  charter or through  any  reorganization,  transfer of assets,
consolidation,  merger,  dissolution,  issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed by it hereunder,  but will at all times in
good faith assist in the carrying out of all the  provisions of this Warrant and
in the taking of all such action as may reasonably be requested by the holder of
this  Warrant in order to protect the  exercise  privilege of the holder of this
Warrant  against  dilution or other  impairment,  consistent  with the tenor and
purpose of this Warrant.  Without limiting the generality of the foregoing,  the
Company  (i) will not  increase  the par value of any  shares  of  Common  Stock
receivable  upon the exercise of this Warrant  above the Exercise  Price then in
effect,  and (ii) will take all such actions as may be necessary or  appropriate
in  order  that the  Company  may  validly  and  legally  issue  fully  paid and
nonassessable shares of Common Stock upon the exercise of this Warrant.

               (e)  SUCCESSORS  AND  ASSIGNS.  This Warrant will be binding upon
any entity succeeding to the Company by merger, consolidation, or acquisition of
all or substantially all the Company's assets.

          4.   ANTIDILUTION PROVISIONS. During the Exercise Period, the Exercise
Price and the number of Warrant Shares shall be subject to adjustment  from time
to time as provided in this Paragraph 4.

                                      -3-
<PAGE>

         In the event that any  adjustment  of the  Exercise  Price as  required
herein results in a fraction of a cent,  such Exercise Price shall be rounded up
to the nearest cent.

               (a)  ADJUSTMENT  OF  EXERCISE  PRICE AND  NUMBER  OF SHARES  UPON
ISSUANCE OF COMMON STOCK.  Except as otherwise  provided in Paragraphs  4(c) and
4(e) hereof,  if and whenever on or after the date of issuance of this  Warrant,
the Company  issues or sells,  or in accordance  with  Paragraph  4(b) hereof is
deemed to have issued or sold,  any shares of Common Stock for no  consideration
or for a  consideration  per share (before  deduction of reasonable  expenses or
commissions  or  underwriting  discounts or allowances in connection  therewith)
less than the Market Price on the date of issuance (a "Dilutive Issuance"), then
immediately upon the Dilutive Issuance,  the Exercise Price will be reduced to a
price determined by multiplying the Exercise Price in effect  immediately  prior
to the Dilutive Issuance by a fraction,  (i) the numerator of which is an amount
equal  to the  sum of  (x)  the  number  of  shares  of  Common  Stock  actually
outstanding immediately prior to the Dilutive Issuance, plus (y) the quotient of
the aggregate  consideration,  calculated as set forth in Paragraph 4(b) hereof,
received by the Company upon such Dilutive  Issuance divided by the Market Price
in effect immediately prior to the Dilutive  Issuance,  and (ii) the denominator
of which is the total number of shares of Common Stock  Deemed  Outstanding  (as
defined below) immediately after the Dilutive Issuance.

               (b)  EFFECT ON EXERCISE PRICE OF CERTAIN EVENTS.  For purposes of
determining  the  adjusted  Exercise  Price under  Paragraph  4(a)  hereof,  the
following will be applicable:

                    (i)  ISSUANCE  OF RIGHTS OR  OPTIONS.  If the Company in any
manner  issues  or  grants  any  warrants,  rights or  options,  whether  or not
immediately  exercisable,  to subscribe for or to purchase Common Stock or other
securities  convertible  into or  exchangeable  for Common  Stock  ("Convertible
Securities")  (such  warrants,  rights and options to purchase  Common  Stock or
Convertible  Securities are hereinafter  referred to as "Options") and the price
per share for which Common  Stock is issuable  upon the exercise of such Options
is less than the Market Price on the date of issuance or grant of such  Options,
then the  maximum  total  number of shares of  Common  Stock  issuable  upon the
exercise of all such  Options  will,  as of the date of the issuance or grant of
such Options,  be deemed to be  outstanding  and to have been issued and sold by
the Company for such price per share.  For purposes of the  preceding  sentence,
the "price per share for which  Common  Stock is issuable  upon the  exercise of
such Options" is determined by dividing (i) the total amount,  if any,  received
or  receivable by the Company as  consideration  for the issuance or granting of
all such Options, plus the minimum aggregate amount of additional consideration,
if any,  payable to the Company upon the exercise of all such Options,  plus, in
the case of Convertible  Securities  issuable upon the exercise of such Options,
the  minimum  aggregate  amount of  additional  consideration  payable  upon the
conversion or exchange  thereof at the time such  Convertible  Securities  first
become  convertible or exchangeable,  by (ii) the maximum total number of shares
of Common Stock  issuable upon the exercise of all such Options  (assuming  full
conversion of Convertible Securities,  if applicable).  No further adjustment to
the  Exercise  Price will be made upon the actual  issuance of such Common Stock
upon  the  exercise  of such  Options  or upon the  conversion  or  exchange  of
Convertible Securities issuable upon exercise of such Options.

                    (ii) ISSUANCE OF CONVERTIBLE  SECURITIES.  If the Company in
any  manner  issues  or  sells  any  Convertible  Securities,   whether  or  not
immediately  convertible  (other  than  where  the  same are  issuable  upon the

                                      -4-
<PAGE>

exercise of Options)  and the price per share for which Common Stock is issuable
upon such  conversion  or exchange is less than the Market  Price on the date of
issuance,  then the maximum total number of shares of Common Stock issuable upon
the conversion or exchange of all such  Convertible  Securities  will, as of the
date of the issuance of such Convertible Securities, be deemed to be outstanding
and to have been issued and sold by the  Company  for such price per share.  For
the purposes of the  preceding  sentence,  the "price per share for which Common
Stock is issuable  upon such  conversion  or exchange" is determined by dividing
(i)  the  total  amount,  if any,  received  or  receivable  by the  Company  as
consideration for the issuance or sale of all such Convertible Securities,  plus
the minimum aggregate amount of additional consideration, if any, payable to the
Company upon the  conversion  or exchange  thereof at the time such  Convertible
Securities first become  convertible or exchangeable,  by (ii) the maximum total
number of shares of Common Stock issuable upon the conversion or exchange of all
such Convertible Securities. No further adjustment to the Exercise Price will be
made upon the actual  issuance of such Common Stock upon  conversion or exchange
of such Convertible Securities.

                    (iii)CHANGE IN OPTION PRICE OR CONVERSION  RATE. If there is
a change at any time in (i) the amount of  additional  consideration  payable to
the Company  upon the  exercise of any  Options;  (ii) the amount of  additional
consideration, if any, payable to the Company upon the conversion or exchange of
any  Convertible  Securities;  or  (iii)  the  rate  at  which  any  Convertible
Securities are  convertible  into or  exchangeable  for Common Stock (other than
under or by reason of  provisions  designed to protect  against  dilution),  the
Exercise  Price in effect at the time of such change will be  readjusted  to the
Exercise  Price which would have been in effect at such time had such Options or
Convertible  Securities still outstanding  provided for such changed  additional
consideration  or  changed  conversion  rate,  as the case  may be,  at the time
initially granted, issued or sold.

                    (iv) TREATMENT   OF   EXPIRED    OPTIONS   AND   UNEXERCISED
CONVERTIBLE  SECURITIES.  If, in any case,  the total number of shares of Common
Stock issuable upon exercise of any Option or upon conversion or exchange of any
Convertible  Securities is not, in fact,  issued and the rights to exercise such
Option or to convert or exchange such Convertible  Securities shall have expired
or  terminated,  the  Exercise  Price then in effect will be  readjusted  to the
Exercise Price which would have been in effect at the time of such expiration or
termination had such Option or Convertible Securities, to the extent outstanding
immediately  prior to such  expiration or termination  (other than in respect of
the actual  number of shares of Common Stock issued upon  exercise or conversion
thereof), never been issued.

                    (v)  CALCULATION OF  CONSIDERATION  RECEIVED.  If any Common
Stock, Options or Convertible  Securities are issued,  granted or sold for cash,
the  consideration  received  therefor  for purposes of this Warrant will be the
amount  received  by  the  Company  therefor,  before  deduction  of  reasonable
commissions,  underwriting  discounts or allowances or other reasonable expenses
paid or incurred by the Company in connection with such issuance, grant or sale.
In case any Common Stock,  Options or Convertible  Securities are issued or sold
for a consideration part or all of which shall be other than cash, the amount of
the consideration other than cash received by the Company will be the fair value
of such consideration,  except where such consideration  consists of securities,
in which case the amount of  consideration  received by the Company  will be the
Market  Price  thereof  as of the date of  receipt.  In case any  Common  Stock,
Options or Convertible Securities are issued in connection with any acquisition,
merger or consolidation in which the Company is the surviving  corporation,  the

                                      -5-
<PAGE>

amount of  consideration  therefor  will be deemed to be the fair  value of such
portion of the net assets and business of the  non-surviving  corporation  as is
attributable  to such Common Stock,  Options or Convertible  Securities,  as the
case may be. The fair value of any  consideration  other than cash or securities
will be determined in good faith by the Board of Directors of the Company.

                    (vi) EXCEPTIONS  TO  ADJUSTMENT   OF  EXERCISE   PRICE.   No
adjustment  to the  Exercise  Price  will be made (i) upon the  exercise  of any
warrants,  options or convertible securities granted,  issued and outstanding on
the date of  issuance  of this  Warrant;  (ii) upon the grant or exercise of any
stock or options which may hereafter be granted or exercised  under any employee
benefit  plan,  stock  option plan or  restricted  stock plan of the Company now
existing or to be  implemented  in the future,  so long as the  issuance of such
stock or options is  approved by a majority  of the  independent  members of the
Board of Directors of the Company or a majority of the members of a committee of
independent  directors  established for such purpose; or (iii) upon the exercise
of the Warrants.

               (c)  SUBDIVISION OR  COMBINATION OF COMMON STOCK.  If the Company
at any time subdivides (by any stock split,  stock  dividend,  recapitalization,
reorganization,  reclassification  or  otherwise)  the  shares of  Common  Stock
acquirable  hereunder into a greater number of shares,  then,  after the date of
record for effecting such subdivision,  the Exercise Price in effect immediately
prior to such subdivision will be proportionately reduced. If the Company at any
time  combines  (by  reverse  stock  split,  recapitalization,   reorganization,
reclassification  or otherwise) the shares of Common Stock acquirable  hereunder
into a smaller  number of shares,  then,  after the date of record for effecting
such  combination,  the  Exercise  Price  in  effect  immediately  prior to such
combination will be proportionately increased.

               (d)  ADJUSTMENT IN NUMBER OF SHARES.  Upon each adjustment of the
Exercise  Price  pursuant to the  provisions of this  Paragraph 4, the number of
shares of Common Stock  issuable upon exercise of this Warrant shall be adjusted
by multiplying a number equal to the Exercise Price in effect  immediately prior
to such  adjustment  by the  number  of shares of  Common  Stock  issuable  upon
exercise of this Warrant  immediately  prior to such adjustment and dividing the
product so obtained by the adjusted Exercise Price.

               (e)  CONSOLIDATION,  MERGER OR SALE. In case of any consolidation
of the Company with, or merger of the Company into any other corporation,  or in
case of any sale or conveyance of all or substantially  all of the assets of the
Company  other than in  connection  with a plan of complete  liquidation  of the
Company,  then  as  a  condition  of  such  consolidation,  merger  or  sale  or
conveyance,  adequate  provision will be made whereby the holder of this Warrant
will have the right to acquire and receive upon exercise of this Warrant in lieu
of the  shares of  Common  Stock  immediately  theretofore  acquirable  upon the
exercise of this Warrant,  such shares of stock,  securities or assets as may be
issued or payable  with  respect to or in  exchange  for the number of shares of
Common Stock immediately  theretofore acquirable and receivable upon exercise of
this  Warrant had such  consolidation,  merger or sale or  conveyance  not taken
place. In any such case, the Company will make  appropriate  provision to insure
that the provisions of this Paragraph 4 hereof will  thereafter be applicable as
nearly as may be in  relation  to any shares of stock or  securities  thereafter
deliverable  upon the exercise of this Warrant.  The Company will not effect any
consolidation,  merger or sale or  conveyance  unless prior to the  consummation
thereof,  the  successor  corporation  (if other  than the  Company)  assumes by
written instrument the obligations under this Paragraph 4 and the obligations to
deliver to the holder of this Warrant such shares of stock, securities or assets
as, in accordance with the foregoing  provisions,  the holder may be entitled to
acquire.

                                      -6-
<PAGE>

               (f)  DISTRIBUTION OF ASSETS. In case the Company shall declare or
make any distribution of its assets  (including cash) to holders of Common Stock
as a partial  liquidating  dividend,  by way of return of capital or  otherwise,
then,  after the date of record for  determining  shareholders  entitled to such
distribution,  but prior to the date of distribution, the holder of this Warrant
shall be entitled  upon  exercise of this Warrant for the purchase of any or all
of the shares of Common  Stock  subject  hereto,  to receive  the amount of such
assets  which  would have been  payable to the holder had such  holder  been the
holder of such shares of Common  Stock on the record date for the  determination
of shareholders entitled to such distribution.

               (g)  NOTICE OF ADJUSTMENT. Upon the occurrence of any event which
requires any adjustment of the Exercise Price,  then, and in each such case, the
Company shall give notice  thereof to the holder of this  Warrant,  which notice
shall state the Exercise Price  resulting from such  adjustment and the increase
or  decrease  in the number of  Warrant  Shares  purchasable  at such price upon
exercise,  setting forth in reasonable  detail the method of calculation and the
facts upon which such calculation is based.  Such calculation shall be certified
by the Chief Financial Officer of the Company.

               (h)  MINIMUM  ADJUSTMENT OF EXERCISE  PRICE. No adjustment of the
Exercise  Price shall be made in an amount of less than 1% of the Exercise Price
in effect at the time such adjustment is otherwise  required to be made, but any
such lesser  adjustment  shall be carried  forward and shall be made at the time
and  together  with the next  subsequent  adjustment  which,  together  with any
adjustments  so  carried  forward,  shall  amount  to not  less  than 1% of such
Exercise Price.

               (i)  NO FRACTIONAL  SHARES.  No fractional shares of Common Stock
are to be issued upon the exercise of this Warrant,  but the Company shall pay a
cash  adjustment  in respect of any  fractional  share which would  otherwise be
issuable in an amount equal to the same  fraction of the Market Price of a share
of Common Stock on the date of such exercise.

               (j)  OTHER NOTICES. In case at any time:

                    (i)  the Company  shall declare any dividend upon the Common
Stock  payable  in shares  of stock of any class or make any other  distribution
(including dividends or distributions  payable in cash out of retained earnings)
to the holders of the Common Stock;

                    (ii) the Company  shall offer for  subscription  pro rata to
the holders of the Common Stock any  additional  shares of stock of any class or
other rights;

                    (iii)there  shall  be  any  capital  reorganization  of  the
Company,  or reclassification of the Common Stock, or consolidation or merger of
the Company  with or into,  or sale of all or  substantially  all its assets to,
another corporation or entity; or

                    (iv) there shall be a voluntary or involuntary  dissolution,
liquidation or winding up of the Company;

                                      -7-
<PAGE>

then,  in each such case,  the Company  shall give to the holder of this Warrant
(a) notice of the date on which the books of the Company shall close or a record
shall be taken for  determining  the holders of Common Stock entitled to receive
any such dividend,  distribution,  or subscription rights or for determining the
holders of Common Stock entitled to vote in respect of any such  reorganization,
reclassification,  consolidation,  merger,  sale,  dissolution,  liquidation  or
winding-up  and (b) in the  case of any such  reorganization,  reclassification,
consolidation,  merger, sale, dissolution,  liquidation or winding-up, notice of
the date (or,  if not then  known,  a  reasonable  approximation  thereof by the
Company) when the same shall take place. Such notice shall also specify the date
on which the holders of Common Stock shall be entitled to receive such dividend,
distribution, or subscription rights or to exchange their Common Stock for stock
or  other  securities  or  property   deliverable   upon  such   reorganization,
reclassification,  consolidation,  merger, sale,  dissolution,  liquidation,  or
winding-up,  as the case  may be.  Such  notice  shall be given at least 30 days
prior to the record date or the date on which the Company's  books are closed in
respect thereto. Failure to give any such notice or any defect therein shall not
affect the validity of the proceedings  referred to in clauses (i), (ii),  (iii)
and (iv) above.

               (k)  CERTAIN EVENTS. If any event occurs of the type contemplated
by the adjustment  provisions of this Paragraph 4 but not expressly provided for
by such  provisions,  the Company  will give notice of such event as provided in
Paragraph  4(g)  hereof,  and the  Company's  Board of  Directors  will  make an
appropriate  adjustment in the Exercise Price and the number of shares of Common
Stock  acquirable upon exercise of this Warrant so that the rights of the holder
shall be neither enhanced nor diminished by such event.

               (l)  CERTAIN DEFINITIONS.

                    (i)  "COMMON STOCK DEEMED OUTSTANDING" shall mean the number
of shares of Common Stock actually  outstanding  (not including shares of Common
Stock held in the  treasury of the  Company),  plus (x)  pursuant  to  Paragraph
4(b)(i) hereof, the maximum total number of shares of Common Stock issuable upon
the  exercise  of  Options,  as of the  date of such  issuance  or grant of such
Options,  if any,  and (y) pursuant to Paragraph  4(b)(ii)  hereof,  the maximum
total number of shares of Common Stock  issuable upon  conversion or exchange of
Convertible  Securities,  as  of  the  date  of  issuance  of  such  Convertible
Securities, if any.

                    (ii) "MARKET  PRICE," as of any date,  (i) means the average
of the last reported sale prices for the shares of Common Stock on the OTCBB for
the five (5)  Trading  Days  immediately  preceding  such  date as  reported  by
Bloomberg,  or (ii) if the OTCBB is not the  principal  trading  market  for the
shares of Common  Stock,  the  average of the last  reported  sale prices on the
principal trading market for the Common Stock during the same period as reported
by  Bloomberg,  or (iii) if market value cannot be calculated as of such date on
any of the foregoing  bases,  the Market Price shall be the fair market value as
reasonably determined in good faith by (a) the Board of Directors of the Company
or, at the option of a  majority-in-interest  of the holders of the  outstanding
Warrants by (b) an independent investment bank of nationally recognized standing
in the valuation of businesses  similar to the business of the corporation.  The
manner of  determining  the Market  Price of the  Common  Stock set forth in the
foregoing  definition  shall apply with respect to any other security in respect
of which a determination as to market value must be made hereunder.

                                      -8-
<PAGE>

                    (iii)"COMMON  STOCK,"  for  purposes  of this  Paragraph  4,
includes the Common Stock,  par value $.001 per share,  and any additional class
of stock of the Company having no preference as to dividends or distributions on
liquidation, provided that the shares purchasable pursuant to this Warrant shall
include only shares of Common  Stock,  par value $.001 per share,  in respect of
which this Warrant is exercisable,  or shares  resulting from any subdivision or
combination  of  such  Common  Stock,  or in the  case  of  any  reorganization,
reclassification, consolidation, merger, or sale of the character referred to in
Paragraph 4(e) hereof, the stock or other securities or property provided for in
such Paragraph.

          5.   ISSUE TAX. The issuance of  certificates  for Warrant Shares upon
the exercise of this Warrant shall be made without  charge to the holder of this
Warrant or such shares for any issuance  tax or other costs in respect  thereof,
provided  that the  Company  shall not be  required  to pay any tax which may be
payable in respect of any transfer  involved in the issuance and delivery of any
certificate in a name other than the holder of this Warrant.

          6.   NO RIGHTS OR LIABILITIES AS A SHAREHOLDER. This Warrant shall not
entitle the holder  hereof to any voting rights or other rights as a shareholder
of the  Company.  No provision of this  Warrant,  in the absence of  affirmative
action by the holder hereof to purchase Warrant Shares,  and no mere enumeration
herein of the rights or privileges of the holder hereof,  shall give rise to any
liability  of such  holder for the  Exercise  Price or as a  shareholder  of the
Company,  whether  such  liability is asserted by the Company or by creditors of
the Company.

          7.   TRANSFER, EXCHANGE, AND REPLACEMENT OF WARRANT.

               (a)  RESTRICTION ON TRANSFER. This Warrant and the rights granted
to the holder hereof are  transferable,  in whole or in part,  upon surrender of
this Warrant,  together with a properly executed assignment in the form attached
hereto,  at the office or agency of the Company  referred to in  Paragraph  7(e)
below,  provided,  however,  that any transfer or assignment shall be subject to
the  conditions  set  forth  in  Paragraph  7(f)  hereof  and to the  applicable
provisions of the  Securities  Purchase  Agreement.  Until due  presentment  for
registration of transfer on the books of the Company,  the Company may treat the
registered  holder hereof as the owner and holder  hereof for all purposes,  and
the Company shall not be affected by any notice to the contrary. Notwithstanding
anything to the contrary contained herein, the registration  rights described in
Paragraph  8 are  assignable  only in  accordance  with the  provisions  of that
certain  Registration Rights Agreement,  dated August 12, 2004, by and among the
Company and the other signatories thereto (the "Registration Rights Agreement").

               (b)  WARRANT  EXCHANGEABLE  FOR  DIFFERENT  DENOMINATIONS.   This
Warrant is  exchangeable,  upon the surrender hereof by the holder hereof at the
office or agency of the Company  referred to in  Paragraph  7(e) below,  for new
Warrants of like tenor  representing  in the aggregate the right to purchase the
number of shares of Common Stock which may be purchased hereunder,  each of such
new Warrants to represent  the right to purchase  such number of shares as shall
be designated by the holder hereof at the time of such surrender.

                                      -9-
<PAGE>

               (c)  REPLACEMENT OF WARRANT.  Upon receipt of evidence reasonably
satisfactory to the Company of the loss,  theft,  destruction,  or mutilation of
this  Warrant and, in the case of any such loss,  theft,  or  destruction,  upon
delivery of an indemnity agreement reasonably satisfactory in form and amount to
the  Company,  or,  in the  case of any  such  mutilation,  upon  surrender  and
cancellation  of this  Warrant,  the Company,  at its expense,  will execute and
deliver, in lieu thereof, a new Warrant of like tenor.

               (d)  CANCELLATION;  PAYMENT OF  EXPENSES.  Upon the  surrender of
this Warrant in  connection  with any  transfer,  exchange,  or  replacement  as
provided in this  Paragraph  7, this Warrant  shall be promptly  canceled by the
Company.  The Company shall pay all taxes (other than securities transfer taxes)
and all other  expenses  (other  than legal  expenses,  if any,  incurred by the
holder or transferees)  and charges payable in connection with the  preparation,
execution, and delivery of Warrants pursuant to this Paragraph 7.

               (e)  REGISTER.  The  Company  shall  maintain,  at its  principal
executive  offices  (or such  other  office or agency of the  Company  as it may
designate by notice to the holder hereof), a register for this Warrant, in which
the Company  shall  record the name and address of the person in whose name this
Warrant has been issued,  as well as the name and address of each transferee and
each prior owner of this Warrant.

               (f)  EXERCISE OR TRANSFER WITHOUT  REGISTRATION.  If, at the time
of the surrender of this Warrant in connection with any exercise,  transfer,  or
exchange of this  Warrant,  this Warrant (or, in the case of any  exercise,  the
Warrant Shares issuable hereunder), shall not be registered under the Securities
Act of 1933,  as  amended  (the  "Securities  Act") and under  applicable  state
securities or blue sky laws, the Company may require, as a condition of allowing
such exercise,  transfer, or exchange, (i) that the holder or transferee of this
Warrant,  as the case may be,  furnish  to the  Company  a  written  opinion  of
counsel,  which opinion and counsel are acceptable to the Company, to the effect
that such exercise, transfer, or exchange may be made without registration under
said Act and under  applicable  state securities or blue sky laws, (ii) that the
holder or transferee  execute and deliver to the Company an investment letter in
form and substance acceptable to the Company and (iii) that the transferee be an
"accredited investor" as defined in Rule 501(a) promulgated under the Securities
Act; provided that no such opinion, letter or status as an "accredited investor"
shall be required in connection  with a transfer  pursuant to Rule 144 under the
Securities  Act.  The first  holder of this  Warrant,  by taking and holding the
same,  represents to the Company that such holder is acquiring  this Warrant for
investment and not with a view to the distribution thereof.

          8.   REGISTRATION  RIGHTS.  The initial  holder of this  Warrant  (and
certain  assignees  thereof) is  entitled  to the  benefit of such  registration
rights in  respect  of the  Warrant  Shares as are set forth in Section 2 of the
Registration Rights Agreement.

                                      -10-
<PAGE>

          9.   NOTICES. All notices, requests, and other communications required
or permitted  to be given or  delivered  hereunder to the holder of this Warrant
shall be in  writing,  and shall be  personally  delivered,  or shall be sent by
certified or registered  mail or by recognized  overnight mail courier,  postage
prepaid and  addressed,  to such holder at the address  shown for such holder on
the books of the Company,  or at such other address as shall have been furnished
to the Company by notice from such  holder.  All  notices,  requests,  and other
communications  required or permitted to be given or delivered  hereunder to the
Company shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to the office of the Company at 5655 Lindero Canyon Road,
Suite 120,  Westlake  Village,  California  91362,  Attention:  Chief  Executive
Officer,  or at such other address as shall have been furnished to the holder of
this Warrant by notice from the  Company.  Any such  notice,  request,  or other
communication  may be sent by facsimile,  but shall in such case be subsequently
confirmed by a writing  personally  delivered or sent by certified or registered
mail or by recognized  overnight  mail courier as provided  above.  All notices,
requests,  and other communications shall be deemed to have been given either at
the time of the receipt thereof by the person entitled to receive such notice at
the address of such person for  purposes of this  Paragraph  9, or, if mailed by
registered or certified  mail or with a recognized  overnight  mail courier upon
deposit with the United States Post Office or such  overnight  mail courier,  if
postage is prepaid and the mailing is properly addressed, as the case may be.

          10.  GOVERNING  LAW. THIS WARRANT  SHALL BE ENFORCED,  GOVERNED BY AND
CONSTRUED IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW YORK  APPLICABLE  TO
AGREEMENTS MADE AND TO BE PERFORMED  ENTIRELY WITHIN SUCH STATE,  WITHOUT REGARD
TO THE  PRINCIPLES OF CONFLICT OF LAWS.  THE PARTIES HERETO HEREBY SUBMIT TO THE
EXCLUSIVE  JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK,
NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS WARRANT,  THE AGREEMENTS
ENTERED INTO IN CONNECTION  HEREWITH OR THE TRANSACTIONS  CONTEMPLATED HEREBY OR
THEREBY.  BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO
THE  MAINTENANCE  OF SUCH SUIT OR  PROCEEDING.  BOTH PARTIES  FURTHER AGREE THAT
SERVICE OF PROCESS  UPON A PARTY  MAILED BY FIRST  CLASS MAIL SHALL BE DEEMED IN
EVERY  RESPECT  EFFECTIVE  SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY  OTHER  MANNER   PERMITTED  BY  LAW.   BOTH  PARTIES   AGREE  THAT  A  FINAL
NON-APPEALABLE  JUDGMENT IN ANY SUCH SUIT OR PROCEEDING  SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER  JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL  MANNER.  THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE  ARISING  UNDER
THIS  WARRANT  SHALL  BE  RESPONSIBLE  FOR  ALL  FEES  AND  EXPENSES,  INCLUDING
ATTORNEYS'  FEES,  INCURRED  BY THE  PREVAILING  PARTY IN  CONNECTION  WITH SUCH
DISPUTE.

          11.  MISCELLANEOUS.

               (a)  AMENDMENTS.  This Warrant and any provision  hereof may only
be amended by an  instrument  in writing  signed by the  Company  and the holder
hereof.

                                      -11-
<PAGE>

               (b)  DESCRIPTIVE  HEADINGS.   The  descriptive  headings  of  the
several  paragraphs of this Warrant are inserted for purposes of reference only,
and shall not  affect  the  meaning  or  construction  of any of the  provisions
hereof.

               (c)  CASHLESS EXERCISE.  Notwithstanding anything to the contrary
contained in this Warrant,  if the resale of the Warrant Shares by the holder is
not then registered  pursuant to an effective  registration  statement under the
Securities Act, this Warrant may be exercised by  presentation  and surrender of
this Warrant to the Company at its  principal  executive  offices with a written
notice of the  holder's  intention  to effect a cashless  exercise,  including a
calculation  of the  number of shares  of  Common  Stock to be issued  upon such
exercise in  accordance  with the terms hereof (a "Cashless  Exercise").  In the
event of a Cashless Exercise,  in lieu of paying the Exercise Price in cash, the
holder  shall  surrender  this Warrant for that number of shares of Common Stock
determined  by  multiplying  the  number  of  Warrant  Shares  to which it would
otherwise  be  entitled  by a  fraction,  the  numerator  of which  shall be the
difference  between the then current  Market Price per share of the Common Stock
and the Exercise  Price,  and the denominator of which shall be the then current
Market Price per share of Common Stock. For example, if the holder is exercising
100,000  Warrants with a per Warrant exercise price of $0.75 per share through a
cashless  exercise  when the Common  Stock's  current  Market Price per share is
$2.00 per share, then upon such Cashless Exercise the holder will receive 62,500
shares of Common Stock.

               (d)  REMEDIES.  The Company  acknowledges  that a breach by it of
its  obligations  hereunder  will  cause  irreparable  harm  to the  holder,  by
vitiating  the  intent  and  purpose  of the  transaction  contemplated  hereby.
Accordingly, the Company acknowledges that the remedy at law for a breach of its
obligations  under this Warrant will be inadequate and agrees, in the event of a
breach or  threatened  breach by the Company of the  provisions of this Warrant,
that the holder shall be entitled,  in addition to all other available  remedies
at law or in equity,  and in addition to the penalties  assessable herein, to an
injunction or injunctions  restraining,  preventing or curing any breach of this
Warrant and to enforce  specifically the terms and provisions  thereof,  without
the necessity of showing  economic  loss and without any bond or other  security
being required.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -12-
<PAGE>

     IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
duly authorized officer.

                                        QT 5, INC.

                                        By: _______________________________
                                            Timothy J. Owens
                                            Chief Executive Officer

Dated as of August 12, 2004

                                      -13-
<PAGE>

                           FORM OF EXERCISE AGREEMENT

                                                       Dated:  ________ __, 200_

To:      ______________________

         The  undersigned,  pursuant to the  provisions  set forth in the within
Warrant,  hereby agrees to purchase  ________  shares of Common Stock covered by
such Warrant, and makes payment herewith in full therefor at the price per share
provided by such Warrant in cash or by  certified or official  bank check in the
amount of,  or, if the resale of such  Common  Stock by the  undersigned  is not
currently registered pursuant to an effective  registration  statement under the
Securities  Act of 1933, as amended,  by surrender of  securities  issued by the
Company  (including a portion of the Warrant) having a market value (in the case
of a portion of this Warrant, determined in accordance with Section 11(c) of the
Warrant) equal to $_________.  Please issue a certificate  or  certificates  for
such shares of Common  Stock in the name of and pay any cash for any  fractional
share to:

                                        Name:___________________________

                                        Signature:
                                        Address:________________________
                                                ________________________

                                        Note: The above signature should
                                              correspond exactly with the name
                                              on the face of the within Warrant,
                                              if applicable.

and,  if said  number  of shares of  Common  Stock  shall not be all the  shares
purchasable under the within Warrant,  a new Warrant is to be issued in the name
of said undersigned  covering the balance of the shares  purchasable  thereunder
less any fraction of a share paid in cash.

<PAGE>

                               FORM OF ASSIGNMENT

         FOR  VALUE  RECEIVED,   the  undersigned  hereby  sells,  assigns,  and
transfers  all the  rights of the  undersigned  under the within  Warrant,  with
respect  to the  number  of shares of Common  Stock  covered  thereby  set forth
hereinbelow, to:

NAME OF ASSIGNEE                    ADDRESS                         NO OF SHARES
----------------                    --------------------            ------------

,      and      hereby      irrevocably       constitutes      and      appoints
___________________________________  as agent and  attorney-in-fact  to transfer
said Warrant on the books of the  within-named  corporation,  with full power of
substitution in the premises.

Dated:   ________ __, 200_

In the presence of:                               ______________________________

                                             Name:______________________________

                                             Signature:_________________________
                                             Title of Signing Officer or Agent
                                             (if any):

                                             Address:___________________________
                                                     ___________________________
                                                     ___________________________

                                             Note:   The above signature should
                                                     correspond exactly with
                                                     the name on the face of the
                                                     within Warrant, if
                                                     applicable.

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