10% SUBORDINATED SECURED PROMISSORY NOTE

EXHIBIT 10.5

THE SECURITIES REPRESENTED BY THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ ACT ”), OR ANY STATE SECURITIES LAWS, AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) AN EXEMPTION FROM SUCH REGISTRATION EXISTS AND THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS.

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10% SUBORDINATED SECURED PROMISSORY NOTE

The Quantum Group, Inc., a Nevada corporation (the “ Company ”), the principal office of which is located at 3420 Fairlane Farms Road, Suite C, Wellington, Florida 33414, for value received hereby promises to pay to _________________, or its registered assigns (the “ Holder ”), the sum of $__________________, or such other amount as shall then equal the outstanding principal amount hereof and all accrued and unpaid interest, as set forth below, on or before September 30, 2009 (the “ Maturity Date ”). Notwithstanding the foregoing, the Company hereby promises to pay, prior to the Maturity Date, to the Holder ten percent (10%) of the net proceeds of each closing of a firmly underwritten public offering or a private placement of the Company’s securities subsequent to the issuance of this Note, resulting in net proceeds to the Company of at least $3 million (a “ Qualified Offering ”), with all such Qualified Offering closings, in the aggregate, not to exceed $3 million. Upon subsequent closings of the Qualified Offering resulting in net proceeds to the Company in excess of $3 million, the Company shall repay Holder, at the final closing of such offering, the remaining unpaid principal balance on the Note, which payment (or payments) shall not exceed, in the aggregate, one hundred percent (100%) of the principal balance of the Note hereof, plus accrued interest.  Payment for all amounts due hereunder shall be made by wire transfer of immediately available funds, in lawful tender of the United States, to an account designated in writing by the Holder.

The Holder of this Note is subject to certain restrictions set forth in the Subscription and Registration Rights Agreement and shall be entitled to certain rights and privileges set forth in the Subscription and Registration Rights Agreement.  This Note is one of the 10% Subordinate Secured Promissory Notes referred to as the “Notes” in the Subscription and Registration Rights Agreement.  In addition to the Note, the Holder shall also be entitled to receive certain Equity Consideration, as set forth under the terms of the Subscription and Registration Rights Agreement.

The following is a statement of the rights of the Holder of this Note and the conditions to which this Note is subject, and to which the Holder hereof, by the acceptance of this Note, agrees:

1.

Definitions . As used in this Note, the following terms, unless the context otherwise requires, have the following meanings:

(i)

“ Company ” includes any corporation that, to the extent permitted by this Note or the Subscription and Registration Rights Agreement, shall succeed to or assume the obligations of the Company under this Note.

(ii)

“ Holder ,” when the context refers to a holder of this Note, shall mean any person who shall at the time be the registered holder of this Note.

2.

Interest . Until all outstanding principal and all accrued and unpaid interest on this Note shall have been paid in full, interest on the unpaid principal balance of this Note shall accrue from the date hereof at the rate of ten percent (10%) per annum (the “ Initial Interest Rate ”). In the event that the principal amount of this Note and all accrued and unpaid interest is not paid in full when such amount becomes due and payable, the Initial Interest Rate shall increase to fifteen percent (15%) per annum and shall continue to accrue on the outstanding balance until such outstanding balance is paid.

3.

Events of Default . If any of the events specified in this Section 3 shall occur (herein individually referred to as an “ Event of Default ”), the Company agrees to give the Holder prompt written notice of such event. The Holder may, so long as such condition exists or has not  been cured during the applicable cure period (whether or not the Holder has received notice of such event), declare the entire principal and unpaid accrued interest hereon immediately due and payable, by notice in writing to the Company:

(i)

Failure by the Company to make any payment hereunder when due, which failure has not been cured within thirty (30) days following such due date; or

(ii)

Any breach by the Company of any material representation, warranty or covenant in this Note or the Subscription and Registration Rights Agreement which results in a Material Adverse Effect on the Company business, operations or financial condition; provided, that, in the event of any such breach, such breach shall not have been cured by the Company within 30 days after the earlier to occur of (a) written notice to the Company of such breach, and (b) the knowledge by the Company of such breach; or

(iii)

The institution by the Company of proceedings to be adjudicated as bankrupt or insolvent, or the consent by it to institution of bankruptcy or insolvency proceedings against it or the filing by it of a petition or answer or consent seeking reorganization or release under the federal Bankruptcy Act, or any other applicable federal or state law, or the consent by it to the filing of any such petition or the appointment of a receiver, liquidator, assignee, trustee or other similar official of the Company, or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the taking of corporate action by the Company in furtherance of any such action; or

2

(iv)

If, within sixty (60) days after the commencement of an action against the Company seeking any bankruptcy, insolvency, reorganization, liquidation, dissolution or similar relief under any present or future statute, law or regulation, such action shall not have been resolved in favor of the Company or all orders or proceedings thereunder affecting the operations or the business of the Company stayed, or if the stay of any such order or proceeding shall thereafter be set aside, or if, within sixty (60) days after the appointment without the consent or acquiescence of the Company of any trustee, receiver or liquidator of the Company or of all or any substantial part of the