Document:

EXHIBIT 4.6

          Form of $1.65 Warrant Issuable Upon Exercise of $1.00 Warrant

                           FORM OF ADDITIONAL WARRANT

NEITHER THESE  SECURITIES  NOR THE  SECURITIES  FOR WHICH THESE  SECURITIES  ARE
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE  COMMISSION OR
THE  SECURITIES  COMMISSION  OF ANY STATE IN  RELIANCE  UPON AN  EXEMPTION  FROM
REGISTRATION  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED  (THE  "SECURITIES
ACT"),  AND,  ACCORDINGLY,  MAY NOT BE OFFERED  OR SOLD  EXCEPT  PURSUANT  TO AN
EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE  SECURITIES  ACT OR PURSUANT TO AN
AVAILABLE  EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE  REGISTRATION
REQUIREMENTS  OF THE  SECURITIES  ACT AND IN COMPLIANCE  WITH  APPLICABLE  STATE
SECURITIES OR BLUE SKY LAWS. THESE  SECURITIES AND THE SECURITIES  ISSUABLE UPON
EXERCISE  OF THESE  SECURITIES  MAY BE  PLEDGED IN  CONNECTION  WITH A BONA FIDE
MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

                           ONSTREAM MEDIA CORPORATION

                               ADDITIONAL WARRANT

Warrant No. [ ]                                         Dated: ______ ___, 200__

      Onstream  Media  Corporation,  a Florida  corporation  (formerly  known as
Visual Data  Corporation,  the  "COMPANY"),  hereby  certifies  that,  for value
received, [Name of Holder] or its registered assigns (the "HOLDER"), is entitled
to purchase  from the  Company up to a total of [ ](2)  shares of common  stock,
$0.0001 par value per share (the  "COMMON  STOCK"),  of the  Company  (each such
share,  a "WARRANT  SHARE" and all such  shares,  the  "WARRANT  SHARES")  at an
exercise  price  equal to $1.65  per  share  (as  adjusted  from time to time as
provided in Section 9, the "EXERCISE PRICE"),  at any time and from time to time
from and after the date hereof and through and  including  the date that is five
years from the date of issuance hereof (the "EXPIRATION  DATE"),  and subject to
the following terms and conditions.  This Additional Warrant (this "WARRANT") is
one of a series of  similar  warrants  issuable  pursuant  each of the  warrants
issued to the  Purchasers (as defined the Purchase  Agreement)  pursuant to that
certain Letter  Agreement,  dated as of February ___, 2005, by the Company.  All
such warrants are referred to herein, collectively, as the "WARRANTS."

      1.  Definitions.  In  addition  to the  terms  defined  elsewhere  in this
Warrant,  capitalized  terms  that are not  otherwise  defined  herein  have the
meanings given to such terms in that certain Securities  Purchase Agreement (the
"ORIGINAL  PURCHASE  AGREEMENT"),  dated as of June 8,  2004,  by and  among the
Company and the Purchasers  identified  therein , together with their successors
and assigns (the "PURCHASERS" and together with the Company, the "PARTIES"),  as
amended by (i) that certain  First  Amendment to Securities  Purchase  Agreement
(the "FIRST  AMENDMENT") and (ii) that certain  Addendum to Securities  Purchase
Agreement (the "ADDENDUM" and collectively with the Original Purchase  Agreement
and the First Amendment, the " "PURCHASE AGREEMENT").

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(2) 50% of the number of shares issued on the date hereof to the Holder in
connection with the exercise of the warrant pursuant to which this Warrant is
being issued.

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      2. Registration of Warrant. The Company shall register this Warrant,  upon
records  to be  maintained  by  the  Company  for  that  purpose  (the  "WARRANT
REGISTER"),  in the name of the  record  Holder  hereof  from time to time.  The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise  hereof or any  distribution to the
Holder, and for all other purposes, absent actual notice to the contrary.

      3.  Registration of Transfers.  The Company shall register the transfer of
any portion of this  Warrant in the Warrant  Register,  upon  surrender  of this
Warrant,  with the Form of Assignment attached hereto duly completed and signed,
to the Transfer Agent or to the Company at its address  specified  herein.  Upon
any such  registration  or transfer,  a new warrant to purchase Common Stock, in
substantially the form of this Warrant (any such new warrant,  a "NEW WARRANT"),
evidencing  the portion of this  Warrant so  transferred  shall be issued to the
transferee and a New Warrant  evidencing  the remaining  portion of this Warrant
not so  transferred,  if any, shall be issued to the  transferring  Holder.  The
acceptance  of the New  Warrant by the  transferee  thereof  shall be deemed the
acceptance by such  transferee of all of the rights and  obligations of a holder
of a Warrant.

      4. Exercise and Duration of Warrant.

            (a) This Warrant shall be exercisable  by the  registered  Holder at
any time and from time to time on or after the date hereof to and  including the
Expiration  Date. At 5:30 P.M., New York City time on the  Expiration  Date, the
portion of this Warrant not exercised prior thereto shall be and become void and
of no value;  provided  that, if the average of the Closing  Prices for the five
Trading  Days  immediately  prior to (but not  including)  the  Expiration  Date
exceeds the Exercise  Price on the Expiration  Date,  then this Warrant shall be
deemed to have been exercised in full (to the extent not  previously  exercised)
on a "cashless exercise" basis at 5:30 P.M. New York City time on the Expiration
Date if a  "cashless  exercise"  may occur at such time  pursuant  to Section 10
below.  Notwithstanding  anything to the contrary  herein,  the Expiration  Date
shall be extended  for each day  following  them First  Effective  Date that the
First Registration Statement is not effective.

            (b) A Holder may exercise  this Warrant by delivering to the Company
(i) an exercise  notice,  in the form attached  hereto (the "EXERCISE  NOTICE"),
appropriately  completed and duly signed, and (ii) payment of the Exercise Price
for the number of Warrant  Shares as to which  this  Warrant is being  exercised
(which  may  take the  form of a  "cashless  exercise"  if so  indicated  in the
Exercise Notice and if a "cashless  exercise" may occur at such time pursuant to
this Section 10 below), and the date such items are delivered to the Company (as
determined  in  accordance  with the notice  provisions  hereof) is an "EXERCISE
DATE." The Holder shall not be required to deliver the original Warrant in order
to effect an exercise  hereunder.  Execution and delivery of the Exercise Notice
shall have the same effect as cancellation of the original  Warrant and issuance
of a New  Warrant  evidencing  the right to  purchase  the  remaining  number of
Warrant Shares.

      5. Delivery of Warrant Shares.

            (a) Upon exercise of this Warrant,  the Company shall  promptly (but
in no event  later than three  Trading  Days after the  Exercise  Date) issue or
cause to be issued and cause to be delivered to or upon the written order of the
Holder and in such name or names as the Holder may designate,  a certificate for
the Warrant  Shares  issuable upon such exercise,  free of  restrictive  legends
unless a  registration  statement  covering the resale of the Warrant Shares and
naming the Holder as a selling stockholder  thereunder is not then effective and
the  Warrant  Shares are not freely  transferable  without  volume  restrictions
pursuant to Rule 144 under the  Securities  Act.  The  Holder,  or any Person so
designated  by the Holder to  receive  Warrant  Shares,  shall be deemed to have
become  holder of record of such  Warrant  Shares as of the Exercise  Date.  The
Company  shall,  upon  request of the  Holder,  use its best  efforts to deliver
Warrant Shares hereunder electronically through the Depository Trust Corporation
or another established clearing corporation performing similar functions.

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<PAGE>

            (b) This  Warrant is  exercisable,  either in its  entirety or, from
time to time, for a portion of the number of Warrant  Shares.  Upon surrender of
this Warrant following one or more partial exercises, the Company shall issue or
cause to be  issued,  at its  expense,  a New  Warrant  evidencing  the right to
purchase the remaining number of Warrant Shares.

            (c) In addition to any other rights  available  to a Holder,  if the
Company fails to deliver to the Holder a certificate representing Warrant Shares
by the third Trading Day after the date on which delivery of such certificate is
required  by this  Warrant,  and if after  such  third  Trading  Day the  Holder
purchases (in an open market transaction or otherwise) shares of Common Stock to
deliver in  satisfaction  of a sale by the Holder of the Warrant Shares that the
Holder  anticipated  receiving  from the Company (a "BUY-IN"),  then the Company
shall,  within three Trading Days after the Holder's request and in the Holder's
discretion, either (i) pay cash to the Holder in an amount equal to the Holder's
total purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased  (the "BUY-IN  PRICE"),  at which point the  Company's
obligation  to deliver such  certificate  (and to issue such Common Stock) shall
terminate,  or (ii)  promptly  honor its  obligation  to deliver to the Holder a
certificate or certificates  representing  such Common Stock and pay cash to the
Holder in an amount  equal to the excess (if any) of the Buy-In  Price minus the
product  of (A) such  number of shares of Common  Stock,  times (B) the  Closing
Price  on the date of the  event  giving  rise to the  Company's  obligation  to
deliver such certificate.

            (d) The Company's obligations to issue and deliver Warrant Shares in
accordance with the terms hereof are absolute and unconditional, irrespective of
any action or inaction by the Holder, other than in the event the issuing and/or
delivering  of such Warrant  Shares to the Holder would result in a violation of
law, to enforce the same,  any waiver or consent with  respect to any  provision
hereof, the recovery of any judgment against any Person or any action to enforce
the same, or any setoff, counterclaim, recoupment, limitation or termination, or
any breach or alleged breach by the Holder or any other Person of any obligation
to the Company or any violation or alleged violation of law by the Holder or any
other Person,  and irrespective of any other  circumstance which might otherwise
limit  such  obligation  of the  Company to the  Holder in  connection  with the
issuance of Warrant  Shares.  Nothing  herein  shall  limit a Holder's  right to
pursue  any  other  remedies  available  to it  hereunder,  at law or in  equity
including,   without  limitation,   a  decree  of  specific  performance  and/or
injunctive  relief  with  respect to the  Company's  failure  to timely  deliver
certificates representing shares of Common Stock upon exercise of the Warrant as
required pursuant to the terms hereof.

      6. Charges, Taxes and Expenses.  Issuance and delivery of certificates for
shares of Common  Stock upon  exercise  of this  Warrant  shall be made  without
charge to the Holder for any issue or transfer tax,  withholding  tax,  transfer
agent fee or other  incidental tax or expense in respect of the issuance of such
certificates,  all of which  taxes and  expenses  shall be paid by the  Company;
provided,  however,  that the Company shall not be required to pay any tax which
may be payable in respect of any transfer  involved in the  registration  of any
certificates  for  Warrant  Shares or  Warrants in a name other than that of the
Holder or an Affiliate  thereof.  The Holder shall be responsible  for all other
tax liability that may arise as a result of holding or transferring this Warrant
or receiving Warrant Shares upon exercise hereof.

      7. Replacement of Warrant.  If this Warrant is mutilated,  lost, stolen or
destroyed,  the  Company  shall  issue or cause to be  issued  in  exchange  and
substitution for and upon  cancellation  hereof,  or in lieu of and substitution
for this Warrant,  a New Warrant,  but only upon receipt of evidence  reasonably
satisfactory to the Company of such loss, theft or destruction and customary and
reasonable  indemnity,  if  requested.  Applicants  for a New Warrant under such
circumstances  shall also  comply  with such other  reasonable  regulations  and
procedures and pay such other  reasonable  third-party  costs as the Company may
prescribe.

      8.  Reservation of Warrant Shares.  The Company  covenants that it will at
all times reserve and keep  available out of the aggregate of its authorized but
unissued  and  otherwise  unreserved  Common  Stock,  solely for the  purpose of
enabling  it to issue  Warrant  Shares upon  exercise of this  Warrant as herein
provided,  the number of Warrant Shares which are then issuable and  deliverable
upon the exercise of this entire  Warrant,  free from  preemptive  rights or any
other  contingent  purchase rights of persons other than the Holder (taking into
account the  adjustments and  restrictions of Section 9). The Company  covenants
that all Warrant Shares so issuable and deliverable shall, upon issuance and the
payment of the applicable Exercise Price in accordance with the terms hereof, be
duly and  validly  authorized,  issued  and fully  paid and  nonassessable.  The
Company will take all such action as may be necessary to assure that such shares
of Common  Stock  may be issued as  provided  herein  without  violation  of any
applicable law or regulation,  or of any requirements of any securities exchange
or automated quotation system upon which the Common Stock may be listed.

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      9. Certain  Adjustments.  The Exercise  Price and number of Warrant Shares
issuable upon  exercise of this Warrant are subject to  adjustment  from time to
time as set forth in this Section 9.

            (a) Stock  Dividends and Splits.  If the Company,  at any time while
this Warrant is  outstanding,  (i) pays a stock  dividend on its Common Stock or
otherwise  makes a distribution on any class of capital stock that is payable in
shares of Common  Stock  other  than the shares  issuable  as  dividends  on the
Company's Series A-10 Convertible  Preferred Stock, (ii) subdivides  outstanding
shares  of  Common  Stock  into a larger  number of  shares,  or (iii)  combines
outstanding shares of Common Stock into a smaller number of shares, then in each
such case the  Exercise  Price  shall be  multiplied  by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding  immediately
before such event and of which the denominator  shall be the number of shares of
Common Stock  outstanding  immediately  after such event.  Any  adjustment  made
pursuant to clause (i) of this  paragraph  shall  become  effective  immediately
after the record date for the determination of stockholders  entitled to receive
such dividend or  distribution,  and any  adjustment  pursuant to clause (ii) or
(iii) of this paragraph shall become effective  immediately  after the effective
date of such subdivision or combination.

            (b) Pro Rata  Distributions.  If the Company, at any time while this
Warrant is outstanding,  distributes to holders of Common Stock (i) evidences of
its  indebtedness,  (ii) any security (other than a distribution of Common Stock
covered by the preceding  paragraph),  (iii) rights or warrants to subscribe for
or purchase any  security,  or (iv) any other asset (in each case,  "DISTRIBUTED
PROPERTY"),  then in each such  case the  Exercise  Price in effect  immediately
prior to the record date fixed for  determination  of  stockholders  entitled to
receive such distribution  shall be adjusted  (effective on such record date) to
equal  the  product  of such  Exercise  Price  times a  fraction  of  which  the
denominator shall be the average of the Closing Prices for the five Trading Days
immediately  prior to (but not  including)  such  record  date and of which  the
numerator  shall  be such  average  less  the  then  fair  market  value  of the
Distributed  Property  distributed in respect of one outstanding share of Common
Stock, as determined by the Company's  independent  certified public accountants
that   regularly   examine  the  financial   statements  of  the  Company,   (an
"APPRAISER").  In such event, the Holder,  after receipt of the determination by
the  Appraiser,  shall have the right to select an additional  appraiser  (which
shall be a  nationally  recognized  accounting  firm),  in which  case such fair
market  value shall be deemed to equal the average of the values  determined  by
each of the Appraiser and such  appraiser.  As an  alternative  to the foregoing
adjustment to the Exercise Price, at the request of the Holder  delivered before
the 90th day after such record  date,  the Company  will deliver to such Holder,
within five Trading Days after such request (or, if later, on the effective date
of such distribution), the Distributed Property that such Holder would have been
entitled  to receive in respect  of the  Warrant  Shares for which this  Warrant
could  have  been  exercised  immediately  prior to such  record  date.  If such
Distributed  Property is not  delivered  to a Holder  pursuant to the  preceding
sentence,  then upon  expiration  of or any  exercise of the Warrant that occurs
after such  record  date,  such Holder  shall  remain  entitled  to receive,  in
addition  to the  Warrant  Shares  otherwise  issuable  upon such  exercise  (if
applicable), such Distributed Property.

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            (c) Fundamental Transactions.  If, at any time while this Warrant is
outstanding,  (i) the Company effects any merger or consolidation of the Company
with or into another  Person in which it is not the surviving  entity,  (ii) the
Company effects any sale of all or  substantially  all of its assets in one or a
series  of  related  transactions,  (iii) any  tender  offer or  exchange  offer
(whether  by the  Company or  another  Person) is  completed  pursuant  to which
holders of Common  Stock are  permitted  to tender or exchange  their shares for
other   securities,   cash  or  property,   or  (iv)  the  Company  effects  any
reclassification  of the Common Stock or any compulsory share exchange  pursuant
to which the Common Stock is  effectively  converted into or exchanged for other
securities,  cash or  property  (other  than as a  result  of a  subdivision  or
combination  of shares of Common  Stock  covered by Section  9(a) above) (in any
such case, a  "FUNDAMENTAL  TRANSACTION"),  then the Holder shall have the right
thereafter to receive,  upon exercise of this Warrant,  the same amount and kind
of  securities,  cash or property as it would have been entitled to receive upon
the occurrence of such Fundamental Transaction if it had been, immediately prior
to such Fundamental Transaction, the holder of the number of Warrant Shares then
issuable upon exercise in full of this Warrant (the "ALTERNATE  CONSIDERATION").
The aggregate  Exercise  Price for this Warrant will not be affected by any such
Fundamental Transaction, but the Company shall apportion such aggregate Exercise
Price among the Alternate  Consideration in a reasonable  manner  reflecting the
relative value of any different  components of the Alternate  Consideration.  If
holders  of Common  Stock are given  any  choice as to the  securities,  cash or
property to be received in a Fundamental  Transaction,  then the Holder shall be
given the same choice as to the  Alternate  Consideration  it receives  upon any
exercise of this Warrant following such Fundamental Transaction. In the event of
a Fundamental Transaction, the Company or the successor or purchasing Person, as
the case may be,  shall  execute with the Holder a written  agreement  providing
that:

            (x) this Warrant shall thereafter entitle the Holder to purchase the
      Alternate Consideration in accordance with this section 9(c),

            (y) in the case of any such  successor or  purchasing  Person,  upon
      such  consolidation,  merger,  statutory  exchange,  combination,  sale or
      conveyance  such  successor  or  purchasing  Person  shall be jointly  and
      severally  liable  with  the  Company  for the  performance  of all of the
      Company's  obligations  under this Warrant and the Transaction  Documents,
      and

            (z) if registration or  qualification is required under the Exchange
      Act or applicable  state law for the public resale by the Holder of shares
      of stock and other  securities  so issuable upon exercise of this Warrant,
      such  registration  or  qualification  shall  be  completed  prior to such
      reclassification,   change,  consolidation,  merger,  statutory  exchange,
      combination or sale.

If, in the case of any  Fundamental  Transaction,  the  Alternate  Consideration
includes shares of stock, other securities, other property or assets of a Person
other than the Company or any such successor or purchasing  Person,  as the case
may be, in such Fundamental Transaction,  then such written agreement shall also
be executed by such other Person and shall contain such additional provisions to
protect the  interests  of the Holder as the Board of  Directors  of the Company
shall reasonably consider necessary by reason of the foregoing.  At the Holder's
request,  any successor to the Company or surviving  entity in such  Fundamental
Transaction  shall  issue  to the  Holder  a new  warrant  consistent  with  the
foregoing provisions and evidencing the Holder's right to purchase the Alternate
Consideration for the aggregate Exercise Price upon exercise thereof.  The terms
of any agreement  pursuant to which a Fundamental  Transaction is effected shall
include terms  requiring any such  successor or surviving  entity to comply with
the  provisions of this paragraph (c) and insuring that the Warrant (or any such
replacement security) will be similarly adjusted upon any subsequent transaction
analogous  to  a  Fundamental   Transaction.   If  any  Fundamental  Transaction
constitutes or results in a Change of Control, then at the request of the Holder
delivered  before the 90th day after such Fundamental  Transaction,  the Company
(or any such  successor or surviving  entity) will purchase the Warrant from the
Holder for a purchase price, payable in cash within five Trading Days after such
request (or, if later,  on the effective date of the  Fundamental  Transaction),
equal to the Black-Scholes  value of the remaining  unexercised  portion of this
Warrant on the date of such request.

            (d) Subsequent Equity Sales.

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                  (i) If, at any time while this  Warrant  is  outstanding,  the
      Company or any  Subsidiary  issues  additional  shares of Common  Stock or
      rights,  warrants,  options  or  other  securities  or  debt  convertible,
      exercisable  or  exchangeable  for  shares  of Common  Stock or  otherwise
      entitling  any Person to  acquire  shares of Common  Stock  (collectively,
      "Common Stock  Equivalents") at a price (exclusive of commissions  payable
      by the Company in  connection  therewith)  per share of Common  Stock (the
      "Effective  Price") less than the Exercise Price (as adjusted hereunder to
      such date),  then the Exercise Price shall be reduced to equal the product
      of (A) the Exercise Price in effect  immediately prior to such issuance of
      Common  Stock or  Common  Stock  Equivalents  times  (B) a  fraction,  the
      numerator  of which is the sum of (1) the number of shares of Common Stock
      outstanding  immediately  prior to such  issuance,  plus (2) the number of
      shares of Common Stock which the aggregate  Effective  Price of the Common
      Stock  issued (or  deemed to be issued)  would  purchase  at the  Exercise
      Price,  and the denominator of which is the aggregate  number of shares of
      Ordinary Shares outstanding or deemed to be outstanding  immediately after
      such  issuance.  For purposes of this  paragraph,  in connection  with any
      issuance of any Common Stock Equivalents, (A) the maximum number of shares
      of Common Stock potentially issuable at any time upon conversion, exercise
      or exchange of such Common Stock  Equivalents  (the "Deemed Number") shall
      be  deemed  to  be   outstanding   upon  issuance  of  such  Common  Stock
      Equivalents, (B) the Effective Price applicable to such Common Stock shall
      equal the minimum dollar value of consideration  payable to the Company to
      purchase  such  Common  Stock  Equivalents  and to  convert,  exercise  or
      exchange them into Common Stock (net of any discounts,  fees,  commissions
      and other  expenses),  divided  by the Deemed  Number,  and (C) no further
      adjustment shall be made to the Exercise Price upon the actual issuance of
      Common  Stock upon  conversion,  exercise or exchange of such Common Stock
      Equivalents.

                  (ii) If, at any time while this  Warrant is  outstanding,  the
      Company  or  any  Subsidiary  issues  Common  Stock  Equivalents  with  an
      Effective Price or a number of underlying  shares that floats or resets or
      otherwise   varies  or  is  subject  to  adjustment   based  (directly  or
      indirectly)  on  market  prices of the  Common  Stock (a  "Floating  Price
      Security"),  then for  purposes of applying  the  preceding  paragraph  in
      connection  with any  subsequent  exercise,  the  Effective  Price will be
      determined  separately  on each  Exercise Date and will be deemed to equal
      the  lowest  Effective  Price at which any holder of such  Floating  Price
      Security  is  entitled  to  acquire  Common  Stock on such  Exercise  Date
      (regardless  of whether any such holder  actually  acquires  any shares on
      such date).

                  (iii)  Notwithstanding  the foregoing,  no adjustment  will be
      made under  this  paragraph  (d) in respect of any shares of Common  Stock
      issued or issuable (A) upon exercise, conversion or exchange of any Common
      Stock Equivalents  described in Schedule 3.1(g) of the Purchase  Agreement
      (provided that such exercise of conversion  occurs in accordance  with the
      terms  thereof,  without  amendment  or  modification);  (B) to  officers,
      directors  or  employees  of,  or  advisers,  consultants  or  independent
      contractors  acting in a similar  capacity  to, the  Company  pursuant  to
      restricted  stock  issuances,  stock  grants,  stock  options  or  similar
      employee stock incentives, in each case approved by the Board of Directors
      of the Company;  or (C) the issuance of securities  in  connection  with a
      bona fide joint venture or development  agreement or strategic partnership
      or similar  agreement  approved by the Company's  board of directors,  the
      primary purpose of which is not to raise equity capital.

            (e) Number of Warrant Shares.  Simultaneously with any adjustment to
the Exercise Price pursuant to paragraphs  (a), (b) or (d) of this Section,  the
number of Warrant  Shares that may be  purchased  upon  exercise of this Warrant
shall be increased or decreased  proportionately,  so that after such adjustment
the aggregate  Exercise  Price payable  hereunder for the increased or decreased
number of Warrant  Shares shall be the same as the aggregate  Exercise  Price in
effect immediately prior to such adjustment.

            (f)  Calculations.  All  calculations  under this Section 9 shall be
made to the nearest cent or the nearest 1/100th of a share,  as applicable.  The
number of shares of Common Stock outstanding at any given time shall not include
shares owned or held by or for the account of the Company,  and the  disposition
of any such shares shall be considered an issue or sale of Common Stock.

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            (g) Notice of  Adjustments.  Upon the occurrence of each  adjustment
pursuant to this  Section 9, the Company at its expense  will  promptly  compute
such  adjustment  in  accordance  with the terms of this  Warrant  and prepare a
certificate setting forth such adjustment, including a statement of the adjusted
Exercise Price and adjusted number or type of Warrant Shares or other securities
issuable  upon  exercise  of  this  Warrant  (as  applicable),   describing  the
transactions  giving  rise to such  adjustments  and showing in detail the facts
upon which such  adjustment  is based.  Upon written  request,  the Company will
promptly  deliver  a copy of each  such  certificate  to the  Holder  and to the
Company's Transfer Agent.

            (h)  Notice of  Corporate  Events.  If the  Company  (i)  declares a
dividend or any other  distribution  of cash,  securities  or other  property in
respect of its Common Stock, including without limitation any granting of rights
or warrants to subscribe for or purchase any capital stock of the Company or any
Subsidiary, (ii) authorizes or approves, enters into any agreement contemplating
or  solicits  stockholder  approval  for any  Fundamental  Transaction  or (iii)
authorizes the voluntary  dissolution,  liquidation or winding up of the affairs
of the Company, then the Company shall deliver to the Holder a notice describing
the material terms and conditions of such transaction, at least 20 calendar days
prior to the applicable record or effective date on which a Person would need to
hold  Common  Stock in order to  participate  in or vote  with  respect  to such
transaction,  and the Company will take all steps reasonably  necessary in order
to insure that the Holder is given the  practical  opportunity  to exercise this
Warrant prior to such time so as to  participate in or vote with respect to such
transaction;  provided,  however, that the failure to deliver such notice or any
defect therein shall not affect the validity of the corporate action required to
be described in such notice.

      10. Payment of Exercise Price.  The Holder shall pay the Exercise Price in
immediately  available  funds;  provided,  however,  that  if  the  Registration
Statement  is  not  effective  on the  Required  Effectiveness  Date  and is not
effective at the time of the exercise,  the Holder may satisfy its obligation to
pay the Exercise Price through a "cashless exercise," in which event the Company
shall issue to the Holder the number of Warrant Shares determined as follows:

                  X = Y [(A-B)/A]

where:

                  X = the number of Warrant Shares to be issued to the Holder.

                  Y = the number of Warrant Shares with
                  respect to which this Warrant is
                  being exercised.

                  A = the average of the Closing Prices
                  for the five Trading Days immediately
                  prior to (but not including) the
                  Exercise Date.

                  B = the Exercise Price.

            For purposes of Rule 144 promulgated under the Securities Act, it is
intended,  understood  and  acknowledged  that the  Warrant  Shares  issued in a
cashless  exercise  transaction  shall be deemed to have  been  acquired  by the
Holder,  and the holding  period for the Warrant  Shares shall be deemed to have
commenced, on the date this Warrant was originally issued.

      11.  Limitation  on  Exercise.  Notwithstanding  anything to the  contrary
contained  herein,  the number of shares of Common Stock that may be acquired by
the Holder upon any  exercise of this Warrant (or  otherwise in respect  hereof)
shall be limited to the extent necessary to insure that, following such exercise
(or  other  issuance),   the  total  number  of  shares  of  Common  Stock  then
beneficially owned by such Holder and its Affiliates and any other Persons whose
beneficial  ownership of Common Stock would be aggregated  with the Holder's for
purposes  of Section  13(d) of the  Exchange  Act,  does not  exceed  9.99% (the
"MAXIMUM  PERCENTAGE") of the total number of issued and  outstanding  shares of
Common Stock  (including  for such  purpose the shares of Common Stock  issuable
upon such exercise). For such purposes, beneficial ownership shall be determined
in  accordance  with  Section  13(d)  of the  Exchange  Act  and the  rules  and
regulations  promulgated  thereunder.   Each  delivery  of  an  Exercise  Notice
hereunder will constitute a  representation  by the Holder that it has evaluated
the limitation  set forth in this paragraph and determined  that issuance of the
full number of Warrant  Shares  requested in such  Exercise  Notice is permitted
under this paragraph.  The Company's  obligation to issue shares of Common Stock
in excess of the limitation  referred to in this Section shall be suspended (and
shall not terminate or expire  notwithstanding  any contrary  provisions hereof)
until  such  time,  if any,  as such  shares  of  Common  Stock may be issued in
compliance with such limitation. The Holder shall have the right (x) at any time
and from time to time to reduce its Maximum  Percentage  immediately upon notice
to the  Company  in the  event and only to the  extent  that  Section  16 of the
Exchange Act or the rules  promulgated  thereunder (or any successor  statute or
rules) is  changed  to reduce  the  beneficial  ownership  percentage  threshold
thereunder to a percentage less than 9.99%.

                                       7
<PAGE>

      12. Fractional Shares. The Company shall not be required to issue or cause
to be issued fractional  Warrant Shares on the exercise of this Warrant.  If any
fraction of a Warrant Share would, except for the provisions of this Section, be
issuable  upon  exercise  of this  Warrant,  the number of Warrant  Shares to be
issued will be rounded up to the nearest whole share.

      13.  Notices.  Any and all notices or other  communications  or deliveries
hereunder (including without limitation any Exercise Notice) shall be in writing
and  shall be deemed  given and  effective  on the  earliest  of (i) the date of
transmission,  if such notice or communication is delivered via facsimile at the
facsimile  number  specified in this Section  prior to 6:30 p.m.  (New York City
time)  on  a  Trading  Day,  (ii)  the  next  Trading  Day  after  the  date  of
transmission,  if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section on a day that is not a Trading Day or
later than 6:30 p.m. (New York City time) on any Trading Day,  (iii) the Trading
Day following the date of mailing,  if sent by nationally  recognized  overnight
courier service, or (iv) upon actual receipt by the party to whom such notice is
required to be given. The address for such notices or communications shall be as
set forth in the Purchase Agreement.

      14.  Warrant  Agent.  The Company  shall serve as warrant agent under this
Warrant.  Upon 30 days'  notice to the  Holder,  the  Company  may appoint a new
warrant agent.  Any corporation  into which the Company or any new warrant agent
may be merged or any corporation  resulting from any  consolidation to which the
Company or any new warrant  agent shall be a party or any  corporation  to which
the  Company  or  any  new  warrant  agent  transfers  substantially  all of its
corporate trust or stockholders  services  business shall be a successor warrant
agent under this Warrant  without any further act.  Any such  successor  warrant
agent shall  promptly  cause  notice of its  succession  as warrant  agent to be
mailed (by first class mail, postage prepaid) to the Holder at the Holder's last
address as shown on the Warrant Register.

      15. Miscellaneous.

            (a) Subject to the  restrictions  on transfer set forth on the first
page hereof, this Warrant may be assigned by the Holder. This Warrant may not be
assigned by the  Company  except to a  successor  in the event of a  Fundamental
Transaction.  This  Warrant  shall be binding on and inure to the benefit of the
parties  hereto and their  respective  successors  and  assigns.  Subject to the
preceding  sentence,  nothing in this Warrant  shall be construed to give to any
Person  other than the  Company  and the Holder  any legal or  equitable  right,
remedy or cause of action under this  Warrant.  This Warrant may be amended only
in  writing  signed by the  Company  and the  Holder  and their  successors  and
assigns.

            (b) The Company will not, by amendment of its governing documents 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 of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such action as may be necessary or appropriate in order
to protect the rights of the Holder  against  impairment.  Without  limiting the
generality of the foregoing,  the Company (i) will not increase the par value of
any Warrant Shares above the amount payable therefor on such exercise, (ii) will
take all such action as may be reasonably necessary or appropriate in order that
the Company may validly and legally issue fully paid and  nonassessable  Warrant
Shares on the exercise of this Warrant, and (iii) will not close its stockholder
books or records in any manner which interferes with the timely exercise of this
Warrant.

                                       8
<PAGE>

            (C)  GOVERNING  LAW;  VENUE;  WAIVER OF JURY  TRIAL.  ALL  QUESTIONS
CONCERNING THE CONSTRUCTION,  VALIDITY,  ENFORCEMENT AND  INTERPRETATION OF THIS
WARRANT SHALL BE GOVERNED BY AND  CONSTRUED AND ENFORCED IN ACCORDANCE  WITH THE
LAWS OF THE STATE OF NEW YORK.  EACH  PARTY  HEREBY  IRREVOCABLY  SUBMITS TO THE
EXCLUSIVE  JURISDICTION  OF THE STATE AND FEDERAL  COURTS SITTING IN THE CITY OF
NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR
IN CONNECTION HEREWITH OR WITH ANY TRANSACTION  CONTEMPLATED HEREBY OR DISCUSSED
HEREIN  (INCLUDING  WITH RESPECT TO THE  ENFORCEMENT  OF ANY OF THE  TRANSACTION
DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT,
ACTION  OR  PROCEEDING,  ANY  CLAIM  THAT IT IS NOT  PERSONALLY  SUBJECT  TO THE
JURISDICTION  OF ANY SUCH  COURT,  THAT  SUCH  SUIT,  ACTION  OR  PROCEEDING  IS
IMPROPER.  EACH PARTY HEREBY  IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND
CONSENTS  TO PROCESS  BEING  SERVED IN ANY SUCH SUIT,  ACTION OR  PROCEEDING  BY
MAILING A COPY THEREOF VIA  REGISTERED OR CERTIFIED  MAIL OR OVERNIGHT  DELIVERY
(WITH  EVIDENCE OF  DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES
TO IT UNDER THIS  AGREEMENT AND AGREES THAT SUCH SERVICE SHALL  CONSTITUTE  GOOD
AND SUFFICIENT  SERVICE OF PROCESS AND NOTICE THEREOF.  NOTHING CONTAINED HEREIN
SHALL BE  DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE  PROCESS  IN ANY  MANNER
PERMITTED BY LAW. THE COMPANY HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY.

            (d) The headings herein are for convenience  only, do not constitute
a part of this  Warrant  and shall  not be deemed to limit or affect  any of the
provisions hereof.

            (e) In case any one or more of the  provisions of this Warrant shall
be invalid or unenforceable in any respect,  the validity and  enforceability of
the  remaining  terms and  provisions  of this  Warrant  shall not in any way be
affected or impaired thereby and the parties will attempt in good faith to agree
upon a valid and enforceable provision which shall be a commercially  reasonable
substitute  therefor,  and upon so agreeing,  shall  incorporate such substitute
provision in this Warrant.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
                             SIGNATURE PAGE FOLLOWS]

                                       9
<PAGE>

      IN  WITNESS  WHEREOF,  the  Company  has  caused  this  Warrant to be duly
executed by its authorized officer as of the date first indicated above.

                                            ONSTREAM MEDIA CORPORATION

                                            By: ________________________________
                                            Name: ______________________________
                                            Title: _____________________________

                                       10
<PAGE>

                             FORM OF EXERCISE NOTICE

(To be executed by the Holder to exercise the right to purchase shares of Common
Stock under the foregoing Warrant)

To: ONSTREAM MEDIA CORPORATION

The undersigned is the Holder of Warrant No. _______ (the  "WARRANT")  issued by
Onstream Media Corporation,  a Florida corporation (the "COMPANY").  Capitalized
terms used herein and not  otherwise  defined have the  respective  meanings set
forth in the Warrant.

1.    The Warrant is currently exercisable to purchase a total of ______________
      Warrant Shares.

2.    The   undersigned   Holder   hereby   exercises   its  right  to  purchase
      _________________ Warrant Shares pursuant to the Warrant.

3.    The Holder  intends that  payment of the  Exercise  Price shall be made as
      (check one):

                  ____ "Cash Exercise" under Section 10

                  ____ "Cashless Exercise" under Section 10 (if permitted)

4.    If the holder has elected a Cash Exercise, the holder shall pay the sum of
      $____________ to the Company in accordance with the terms of the Warrant.

5.    Pursuant  to this  exercise,  the  Company  shall  deliver  to the  holder
      _______________  Warrant  Shares  in  accordance  with  the  terms  of the
      Warrant.

6.    Following  this  exercise,  the Warrant shall be exercisable to purchase a
      total of ______________ Warrant Shares.

Dated: _____________________, _____      Name of Holder:

                                         (Print) _______________________________

                                         By: ___________________________________
                                         Name: _________________________________
                                         Title: ________________________________

                                         (Signature must conform in all respects
                                         to name of holder as  specified  on the
                                         face of the Warrant)

                                       11
<PAGE>

                               FORM OF ASSIGNMENT

      [To be completed and signed only upon transfer of Warrant]

      FOR VALUE RECEIVED,  the undersigned  hereby sells,  assigns and transfers
unto  ________________________________  the  right  represented  by  the  within
Warrant  to  purchase  ____________  shares of Common  Stock of  Onstream  Media
Corporation  to which the within Warrant  relates and appoints  ________________
attorney to transfer said right on the books of Onstream Media  Corporation with
full power of substitution in the premises.

Dated: _____________________, _____      _______________________________________
                                         (Signature must conform in all respects
                                         to name of holder as  specified  on the
                                         face of the Warrant)

                                         _______________________________________
                                         Address of Transferee

                                         _______________________________________

                                         _______________________________________

In the presence of:

__________________________________

                                       12EXHIBIT NO. 10.1

                      [FORM OF] CONVERTIBLE LOAN AGREEMENT

                    Dated as of [date] ("Subscription Date")

      This CONVERTIBLE LOAN AGREEMENT (this "Agreement") is entered into between
NUWAY  MEDICAL,  INC., a  corporation  organized  under the laws of the state of
Delaware (the "Borrower"), and [investor], the "Investor". The Investor shall be
referred to herein as the "Lender". Capitalized terms used herein shall have the
meanings ascribed to such terms in Section 8 of this Agreement.

      In  consideration  of the  mutual  covenants  and  undertakings  contained
herein,  and  for  other  good  and  valuable  consideration,  the  receipt  and
sufficiency of which are hereby acknowledged, the Borrower and the Lender hereby
agree as follows:

                                SECTION 1. LOAN

      SECTION  1.1.  TERM  LOAN.  Subject  to the terms and  conditions  of this
Agreement, the Lender agrees to loan to the Borrower, and the Borrower agrees to
borrow from the Lender,  in the aggregate  principal amount of the "Subscription
Amount", (collectively,  the "Term Loan"). The Lender hereby agrees to make such
loan to the Borrower on the date so  indicated,  with such payment to be made in
immediately available funds via wire transfer or cashier's check.

      SECTION 1.2. TERM NOTE.  The Term Loan shall be evidenced by a convertible
promissory  note (the  "Convertible  Term Note"),  substantially  in the form of
Exhibit A, with appropriate  insertions,  dated the date hereof,  payable to the
order of the  Lender and in the  initial  principal  amount of the  Subscription
Amount.  The Term Loan shall be due and payable one year from the  "Subscription
Date",  or at an earlier  date as provided in Section 3.2 hereof (the "Term Loan
Maturity Date").

                          SECTION 2. INTEREST AND FEES

      SECTION 2.1.  INTEREST.  The Borrower agrees to pay interest on the unpaid
principal amount of the Term Loan from time to time outstanding hereunder at the
following rates per year, compounded annually:

            (a) before  maturity of the Term Loan,  whether by  acceleration  or
      otherwise, at the rate per annum equal to ten percent (10%).

            (b) after the maturity of the Term Loan,  whether by acceleration or
      otherwise, until paid, at a rate per annum equal to fifteen percent 15%).

      SECTION 2.2. INTEREST PAYMENT DATE. Accrued interest shall be paid in full
on the Term Loan Maturity Date.

                                      -1-
<PAGE>

      SECTION  2.3.  BASIS OF  COMPUTATION.  Interest  shall be computed for the
actual  number of days  elapsed on the basis of a year  consisting  of 360 days,
including the date the Term Loan is made and excluding the date the Term Loan or
any portion thereof is paid or prepaid.

            SECTION 3. CONVERSION AND PAYMENTS

      SECTION 3.1. PAYMENTS.

            (a) Place of Payment.  Cash payments  required to be made under this
      Agreement and the Convertible Term Note of principal,  interest,  fees and
      other amounts payable hereunder, shall be made to the Lender at its office
      located at [investor address] (the "Investor's Address").

            (b) Form of Payment. All payments of principal and interest shall be
      made by wire transfer to the Lender.

      SECTION 3.2. PREPAYMENT.

            (a) Optional  Prepayment.  The Borrower may from time to time prepay
      the Term Loan or any portion thereof without premium or penalty.

            (b) Mandatory Prepayment.

                  (i)  Within  ten  (10)  days of the  occurrence  of any of the
            following  events,  the Borrower shall make a prepayment of the Term
            Loan in an amount equal to the proceeds received by the Borrower, in
            each case up to the total amount then due under the Term Loan, from:

                              (A)  the  sale  of any of  the  Borrower's  assets
                              outside the ordinary course of business; and

                              (B) any insurance  payouts or condemnation  awards
                              payable  by reason of  theft,  loss,  destruction,
                              damage,  taking or any other  similar  event  with
                              respect to any  property or assets of the Borrower
                              (provided, however, so long as no Event of Default
                              or Unmatured  Event of Default has occurred and is
                              continuing  the  Borrower  may use such  insurance
                              payouts or condemnation  awards within thirty (30)
                              days after  receipt by the Borrower to replace any
                              such property with property performing the same or
                              similar function).

      SECTION 3.3. CONVERSION.

            (a)  Conversion  into  Preferred  Stock.  Pursuant to the conversion
      provisions  set forth in the  Convertible  Term Note, the Term Loan may be
      converted  into series A preferred  stock of the Borrower  pursuant to the
      terms set forth in the Convertible Term Note.

                                      -2-
<PAGE>

            (b) One Year Buy Back of  Preferred  Shares.  At the  Lender's  sole
      option,  the Lender may require the Borrower to  repurchase  the shares of
      preferred  stock  issued  to the  Lender  herein  at the end of a one year
      period for a price of 110% of the Subscription  Amount. If the Borrower is
      unable to buy back the shares upon said terms,  the Borrower's  president,
      as  indicated  below,  will buy back the shares from the Lender upon those
      terms.

                   SECTION 4. REPRESENTATIONS AND WARRANTIES

      To induce the Lender to make the Term Loan,  the Borrower  represents  and
warrants to the Lender that (except in each case as  otherwise  disclosed in the
Borrower's filings with the SEC):

      SECTION 4.1.  ORGANIZATION.  The Borrower is a corporation existing and in
good standing under the laws of the State of Delaware;  each of its subsidiaries
is a corporation,  limited liability company or partnership duly existing and in
good  standing  under the laws of the state of its  formation;  the Borrower and
each of its subsidiaries are duly qualified,  in good standing and authorized to
do  business  in  each  jurisdiction  where,  because  of the  nature  of  their
activities  or  properties,  such  qualification  is required,  except where the
failure  to be so  qualified  would not have a  material  adverse  effect on the
Borrower's  business,  financial condition or results of operations (a "Material
Adverse  Effect");  and the Borrower and each of its subsidiaries have the power
and authority to own their  properties  and to carry on their  businesses as now
being conducted.

      SECTION 4.2.  AUTHORIZATION;  NO CONFLICT.  The borrowings hereunder,  the
execution and delivery of this  Agreement  and the  Convertible  Term Note,  the
performance  by the Borrower of its  obligations  under this  Agreement  and the
Convertible  Term Note are within the  Borrower's  corporate  powers,  have been
authorized  by all  necessary  corporate  action,  have  received all  necessary
governmental  approval  (if any  shall  be  required)  and do not and  will  not
contravene or conflict with any provision of law or of the charter or by-laws of
the Borrower or any subsidiary or of any agreement  binding upon the Borrower or
any subsidiary.

      SECTION 4.3. FINANCIAL STATEMENTS. The Borrower's un-audited consolidating
and consolidated  financial  statements as at December 31, 2003, copies of which
have been made  available to the Lender,  have been prepared in conformity  with
GAAP applied on a basis  consistent with that of the preceding  fiscal year, and
accurately present the financial  condition of the Borrower and its subsidiaries
as at such dates and the results of their operations for the respective  periods
then ended.

      SECTION 4.4.  LIENS.  None of the assets of the Borrower or any subsidiary
thereof are subject to any  mortgage,  pledge,  title  retention  lien, or other
lien, encumbrance or security interest.

                                      -3-
<PAGE>

      SECTION  4.5.  ADVERSE  CONTRACTS.  Neither  the  Borrower  nor any of its
subsidiaries is a party to any agreement or instrument or subject to any charter
or other  corporate  restriction,  nor is it subject to any judgment,  decree or
order of any court or governmental  body,  which may have a material and adverse
effect on the business, property, assets, operations, conditions or prospects of
the  Borrower  and its  subsidiaries  taken as a whole or on the  ability of the
Borrower to perform its  obligations  under this  Agreement and the  Convertible
Term Note.  Neither  the  Borrower  nor any of its  subsidiaries  has,  nor with
reasonable  diligence  should  have had,  knowledge  of or notice  that it is in
default in the performance, observance or fulfillment of any of the obligations,
covenants  or   conditions   contained  in  any  such   agreement,   instrument,
restriction, judgment, decree or order.

      SECTION 4.6. REGULATION U. The Borrower is not engaged principally in, nor
is one of the Borrower's important activities,  the business of extending credit
for the purpose of purchasing or carrying  "margin  stock" within the meaning of
Regulation U of the Board of Governors of the Federal  Reserve System as now and
from time to time hereinafter in effect.

      SECTION  4.7.  LITIGATION  AND  CONTINGENT   LIABILITIES.   No  litigation
(including   derivative  actions),   arbitration   proceedings  or  governmental
proceedings  are  pending  or  threatened  against  the  Borrower  or any of its
subsidiaries which would (singly or in the aggregate),  if adversely determined,
have a  material  and  adverse  effect  on  the  business,  properties,  assets,
operations, conditions or prospects of the Borrower or any subsidiary.

                              SECTION 5. COVENANTS

      Until all obligations of the Borrower  hereunder and under the Convertible
Term Note are paid and fulfilled in full, the Borrower agrees that it shall, and
shall cause each of its  subsidiaries  to, comply with the following  covenants,
unless the Lender consents otherwise in writing:

      SECTION  5.1.  CORPORATE  EXISTENCE,  MERGERS,  ETC. The Borrower and each
subsidiary  shall  preserve  and  maintain  its  corporate  existence,   rights,
franchises, licenses and privileges, and will not liquidate, dissolve, or merge,
or consolidate with or into any other corporation,  or sell, lease,  transfer or
otherwise  dispose  of all or a  substantial  part of its assets  (except  those
assets sold in the ordinary course of its business), except that:

            (a) Any  subsidiary  may  merge  or  consolidate  with  or into  the
      Borrower or any one or more wholly-owned subsidiaries; and

            (b) Any subsidiary may sell, lease, transfer or otherwise dispose of
      any  of  its  assets  to  the   Borrower  or  one  or  more   wholly-owned
      subsidiaries.

      SECTION 5.2. INSPECTION. The Borrower and each subsidiary shall permit the
Lender and its agents at any time during normal  business hours to inspect their
properties  and to inspect and make copies of their books and records,  provided
that the Lender agrees to enter into confidentiality  agreements with respect to
the foregoing.

                                      -4-
<PAGE>

      SECTION 5.3. USE OF PROCEEDS.

            (a) Use of Proceeds.  The Borrower  shall use the proceeds  from the
      Term Loan  solely for  operating  costs,  including  but not  limited  to,
      employee   salaries  and  costs  associated  with  filing  SEC  compliance
      documents.

            (b) Margin  Regulations.  Neither the  Borrower  nor any  subsidiary
      shall  use or permit  any  proceeds  of the Term  Loan to be used,  either
      directly or indirectly, for the purpose, whether immediate,  incidental or
      ultimate,  of "purchasing or carrying any margin stock" within the meaning
      of  Regulations  U or X of the Board of Governors  of the Federal  Reserve
      System, as amended from time to time.

            (c) Tender  Offers and Going  Private.  Neither the Borrower nor any
      subsidiary  shall use (or permit to be used) any proceeds of the Term Loan
      to acquire any security in any transaction  which is subject to Section 13
      or 14 of  the  Securities  Exchange  Act  of  1934,  as  amended,  or  any
      regulations or rulings thereunder.

      SECTION  5.4.   COMPLIANCE   WITH  LAW.  The  Borrower  and  each  of  its
subsidiaries shall comply in all material respects with all laws and regulations
(whether federal, state or local and whether statutory, administrative, judicial
or  otherwise)  and with  every  lawful  governmental  order or  similar  action
(whether  administrative  or judicial)  applicable to it, except in each case as
would not have a Material Adverse Effect.

      SECTION 5.5. AFFILIATE  TRANSACTIONS.  Not enter into any transaction with
an  affiliate,  except  for  transactions  in the  ordinary  course of  business
pursuant to the reasonable  requirements of the Borrower's or each subsidiaries'
business and upon fair and reasonable terms no less favorable to the Borrower or
the  subsidiaries  than the  Borrower  or the  subsidiaries  would  obtain  in a
comparable arms-length transaction.

                        SECTION 6. CONDITIONS OF LENDING

      The  obligation  of the  Lender  to make the Term Loan is  subject  to the
following conditions precedent:

      SECTION 6.1.  DOCUMENTATION.  In addition to the conditions  precedent set
forth in Section 6.2 and Section 6.3, the  obligation  of the Lender to make the
Term Loan is  subject to the  conditions  precedent  that the Lender  shall have
received all of the following, each duly executed and dated a date acceptable to
the Lender, in form and substance satisfactory to the Lender and its counsel, at
the expense of the Borrower,  and in such number of signed  counterparts  as the
Lender may request  (except  for the  Convertible  Term Note,  of which only the
original shall be signed):

                                      -5-
<PAGE>

            (a) Agreement. This Agreement;

            (b) Note. The Convertible Term Note;

            (c) Resolution.  A copy of a resolution of the Board of Directors of
      the  Borrower  authorizing  or  ratifying  the  execution,   delivery  and
      performance,  respectively,  of this Agreement,  the Convertible Term Note
      and the other documents  provided for in this Agreement,  certified by the
      secretary or assistant secretary of the Borrower; and

            (d)  Miscellaneous.  Such other  documents and  certificates  as the
      Lender may request.

      SECTION 6.2. REPRESENTATIONS AND WARRANTIES; NO DEFAULT.

            (a)  Representations  and Warranties.  At the date of the Term Loan,
      the  Borrower's  representations  and warranties set forth herein shall be
      true and  correct in all  material  respects as at such date with the same
      effect as though those representations and warranties had been made on and
      as at such date.

            (b) No Default.  At the time of the Term Loan, and immediately after
      giving effect to the Term Loan, the Borrower  shall be in compliance  with
      all the terms and  provisions  set forth herein on its part to be observed
      or performed,  and no Event of Default or Unmatured Event of Default shall
      have  occurred and be  continuing  at the time of the Term Loan,  or would
      result from the making of the Term Loan.

      SECTION 6.3. NO MATERIAL ADVERSE CHANGE. No material adverse change in, or
effect  on, (a) the  business,  assets,  properties,  operations,  condition  or
prospects of the Borrower or any of its  subsidiaries  or (b) the ability of the
Borrower to perform its obligations under this Agreement or the Convertible Term
Note,  in all  cases  whether  due  to a  single  circumstance  or  event  or an
aggregation of circumstances or events, shall have occurred.

      SECTION 7. DEFAULT

      SECTION  7.1.  EVENTS OF DEFAULT.  Each of the  following  occurrences  is
hereby defined as an "Event of Default":

            (a)  Nonpayment.  The  Borrower  shall  fail to make any  payment of
      principal,  interest,  or other amounts payable hereunder when and as due;
      or

            (b) Default under Related Documents.  Any default, event of default,
      or similar event shall occur or continue under any  instrument,  document,
      note,  agreement,  or guaranty  delivered to the Lender in connection with
      the Term Loan (including without limitation the Convertible Term Note), or
      any such instrument,  document, note, agreement, or guaranty shall not be,
      or shall cease to be, enforceable in accordance with its terms; or

                                      -6-
<PAGE>

            (c)  Cross-Default.  There  shall  occur  any  default  or  event of
      default,  or any event which might  become such with notice or the passage
      of time or both,  or any similar  event,  or any event which  requires the
      prepayment of borrowed money or the acceleration of the maturity  thereof,
      under the terms of any evidence of indebtedness or other agreement  issued
      or assumed or entered into by the  Borrower,  any of its  subsidiaries  or
      under the terms of any indenture,  agreement or instrument under which any
      such  evidence of  indebtedness  or other  agreement  is issued,  assumed,
      secured or  guaranteed,  in each case in respect of an amount that exceeds
      $100,000,  and such event shall continue  beyond any applicable  period of
      grace; or

            (d) Dissolutions,  etc. The Borrower or any subsidiary shall fail to
      comply with any  provision  concerning  its  existence or any  prohibition
      against dissolution, liquidation, merger, consolidation or sale of assets;
      or

            (e) Warranties. Any representation, warranty, schedule, certificate,
      financial  statement,  report,  notice or other writing furnished by or on
      behalf of the Borrower or any of its  subsidiaries  to the Lender is false
      or  misleading  in any material  respect on the date as of which the facts
      therein set forth are stated or certified; or

            (f)  ERISA.  (i)  Institution  of any steps by the  Borrower  or any
      subsidiary  to  terminate  a Plan if as a result of such  termination  the
      Borrower or such  subsidiary  could be required to make a contribution  to
      such Plan,  or could  incur a liability  or  obligation  to such Plan,  in
      either case in excess of $100,000; (ii) a contribution failure occurs with
      respect to any plan sufficient to give rise to a lien under Section 302(f)
      of ERISA with respect to any Plan;  (iii) there shall occur any withdrawal
      or  partial  withdrawal  from a  Multiemployer  Plan  and  the  withdrawal
      liability (without unaccrued  interest) to Multiemployer Plans as a result
      of such withdrawal  (including any outstanding  withdrawal  liability that
      the Borrower or any  subsidiary  and any ERISA  Affiliate have incurred on
      the date of such withdrawal)  exceeds  $100,000;  or (iv) any "reportable"
      event  shall occur under  ERISA in respect of any  employee  benefit  plan
      maintained for employees of the Borrower or any subsidiary; or

            (g) Litigation.  Any suit,  action or other proceeding  (judicial or
      administrative) commenced against the Borrower or any of its subsidiaries,
      or with  respect to any assets of the Borrower or such  subsidiary,  shall
      threaten  to have a material  and adverse  effect on the asset,  condition
      (financial  or  otherwise)  or future  operations  of the Borrower or such
      subsidiary;  or a final  judgment or  settlement  in excess of $100,000 in
      excess of  insurance  shall be entered in, or agreed to in respect of, any
      such suit, action or proceeding; or

                                      -7-
<PAGE>

            (h)  Noncompliance  with this Agreement.  The Borrower shall fail to
      comply in any material  respect with any provision  hereof,  which failure
      does not otherwise  constitute an Event of Default, and such failure shall
      continue for ten (10) days after the occurrence of such failure; or

            (i)   Bankruptcy.   Any  bankruptcy,   insolvency,   reorganization,
      arrangement,   readjustment,    liquidation,   dissolution,   or   similar
      proceeding,  domestic or foreign, is instituted by or against the Borrower
      or any of its  subsidiaries,  or the  Borrower or any of its  subsidiaries
      shall take any step toward, or to authorize, such a proceeding; or

            (j) Insolvency. The Borrower or any of its subsidiaries shall become
      insolvent,  generally  shall  fail or be  unable  to pay its debts as they
      mature,  shall  admit in writing  its  inability  to pay its debts as they
      mature,  shall make a general assignment for the benefit of its creditors,
      shall enter into any  composition or similar  agreement,  or shall suspend
      the transaction of all or a substantial portion of its usual business.

      SECTION 7.2.  REMEDIES.  Upon the  occurrence  of any Event of Default set
forth in subsections (a)-(k) of Section 7.1 and during the continuance  thereof,
the Lender or any other  holder of the  Convertible  Term Note may  declare  the
Convertible Term Note and any other amounts owed to the Lender to be immediately
due and payable,  whereupon the Convertible Term Note and any other amounts owed
to the Lender shall forthwith become due and payable. Upon the occurrence of any
Event  of  Default  set  forth  in  subsections  (l)-(m)  of  Section  7.1,  the
Convertible  Term  Note  and any  other  amounts  owed to the  Lender  shall  be
immediately and  automatically due and payable without action of any kind on the
part of the  Lender  or any other  holder  of the  Convertible  Term  Note.  The
Borrower expressly waives presentment,  demand, notice or protest of any kind in
connection  herewith.  The Lender shall promptly give the Borrower notice of any
such  declaration,  but  failure  to do so shall not  impair  the effect of such
declaration. No delay or omission on the part of the Lender or any holder of the
Convertible  Term Note in exercising  any power or right  hereunder or under the
Convertible  Term Note shall  impair such right or power or be construed to be a
waiver of any Event of Default or any acquiescence therein, nor shall any single
or partial  exercise of any power or right  hereunder  preclude other or further
exercise thereof, or the exercise of any other power or right.

                             SECTION 8. DEFINITIONS

      SECTION 8.1. GENERAL. As used herein:

            (a) "Affiliate" of any Person means (a) any Person that, directly or
      indirectly, is in control of, is controlled by, or is under common control
      with such Person,  (b) any Person who is a director or officer (i) of such
      Person,  (ii) of any  subsidiary  of such  Person  or (iii) of any  Person
      described  in  clause  (a)  above  or (c)  in the  case  of a  trust,  its
      protectors  or  trustees,  any  Person  who is or has  been a  beneficiary
      thereof,  or any Person  who is or has been able to appoint a  beneficiary
      thereof.  For purposes of this definition,  control of a Person shall mean
      the power,  direct or indirect  (i) to vote 25% or more of the  securities
      having ordinary voting power for the election of directors of such Person,
      whether by ownership of securities,  contract, proxy or otherwise, or (ii)
      to direct or cause the  direction of the  management  and policies of such
      Person, whether by ownership of securities, contract, proxy or otherwise.

                                      -8-
<PAGE>

            (b) "Agreement" shall have the meaning set forth in the Preamble.

            (c) "Borrower" shall have the meaning set forth in the Preamble.

            (d) "Code" means the Internal  Revenue Code of 1986, as amended from
      time to time.

            (e) "ERISA"  means the Employee  Retirement  Income  Security Act of
      1974, as amended from time to time.

            (f) "ERISA  Affiliate"  means any  corporation  or trade or business
      which is a member of the same controlled group of corporations (within the
      meaning of Section 414(b) of the Code) as such Borrower or is under common
      control  (within  the  meaning  of  Section  414(c) of the Code)  with the
      Borrower.

            (g) "GAAP" shall mean generally  accepted  accounting  principles in
      the United  States of America as in effect on the date of this  Agreement,
      consistently applied.

            (h) "Investor" shall have the meaning set forth in the Preamble.

            (i) "Investor's Address" shall have the meaning set forth in Section
      3.1.

            (j) "Lender" shall have the meaning set forth in the Preamble.

            (k) "Multiemployer  Plan" means a multiemployer plan defined as such
      in  Section  3(37) of ERISA to which  contributions  have been made by the
      Borrower or any ERISA  Affiliate as a "contributing  sponsor"  (within the
      meaning of Section 4001(a)(13) of ERISA).

            (l) "PBGC" means the Pension  Benefit  Guaranty  Corporation  or any
      entity succeeding to any or all of its functions under ERISA.

            (m)  "Person"  shall  mean  any  individual,   sole  proprietorship,
      partnership,    joint   venture,   trust,   unincorporated   organization,
      association,  corporation,  limited liability company, institution, public
      benefit corporation,  other entity or government (whether federal,  state,
      county,  city,  municipal,  local,  foreign,  or otherwise,  including any
      instrumentality, division, agency, body or department thereof).

                                      -9-
<PAGE>

            (n) "Plan" means any plan,  program or arrangement which constitutes
      an "employee benefit plan" within the meaning of Section 3(3) of ERISA and
      which  is  maintained  or  contributed  to by the  Borrower  or its  ERISA
      Affiliates for the benefit of their employees, including former employees.

            (o) "Subsidiary" means any corporation,  partnership, joint venture,
      trust,  or other  legal  entity of which the  Borrower  owns  directly  or
      indirectly 50% or more of the outstanding voting stock or interest,  or of
      which the Borrower has effective control, by contract or otherwise.

            (p) "Subscription Amount" shall equal [amount].

            (q)  "Subscription  Date"  shall have the  meaning  set forth in the
      Preamble.

            (r) "Term Loan  Maturity  Date"  shall have the meaning set forth in
      Section 1.2.

            (s)  "Convertible  Term Note"  shall have the  meaning  set forth in
      Section 1.2.

            (t) "Unmatured Event of Default" means an event or condition,  which
      would  become an Event of Default  with  notice or the  passage of time or
      both.

Except as and unless  otherwise  specifically  provided  herein,  all accounting
terms in this Agreement  shall have the meanings given to them by GAAP and shall
be applied and all reports  required by this Agreement  shall be prepared,  in a
manner consistent with the audited financial  statements  referred to in Section
4.3.

      SECTION 8.2.  APPLICABILITY OF SUBSIDIARY AND AFFILIATE REFERENCES.  Terms
hereof  pertaining to any  subsidiary or affiliate  shall apply only during such
times as the Borrower has any subsidiary or affiliate.

                            SECTION 9. MISCELLANEOUS

      SECTION 9.1.  WAIVER OF DEFAULT.  The Lender may, by written notice to the
Borrower,  at any time and from  time to time,  waive any  Event of  Default  or
Unmatured  Event of Default,  which shall be for such period and subject to such
conditions  as shall be specified  in any such  notice.  In the case of any such
waiver,  the Lender and the Borrower shall be restored to their former  position
and rights hereunder and under the Convertible Term Note, respectively,  and any
Event of Default or  Unmatured  Event of Default so waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to or impair any right
consequent  thereon or to any  subsequent or other Event of Default or Unmatured
Event of Default.

      SECTION 9.2.  NOTICES.  All  notices,  requests and demands to or upon the
respective  parties  hereto  shall be  deemed  to have  been  given or made when
deposited in the mail, postage prepaid, addressed:

                                      -10-
<PAGE>

            (a) if to the Lender to the Investor's Address,

            (b) if to the  Borrower to NuWay  Medical,  Inc.,  2603 Main Street,
      Suite 1150, Irvine, California 92614 Attention: Chief Executive Officer.

or to such  other  address  as may be  hereafter  designated  in  writing by the
respective parties hereto.

      SECTION 9.3. NONWAIVER;  CUMULATIVE REMEDIES. No failure to exercise,  and
no delay  in  exercising,  on the  part of the  Lender  of any  right,  power or
privilege  hereunder shall preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.  The rights and remedies of the
Lender  herein  provided  are  cumulative  and not  exclusive  of any  rights or
remedies provided by law.

      SECTION 9.4. SURVIVAL OF AGREEMENTS.  All agreements,  representations and
warranties made herein shall survive the delivery of the  Convertible  Term Note
and the making of the Term Loan.

      SECTION 9.5. SUCCESSORS. This Agreement shall, upon execution and delivery
by the Borrower and  acceptance  by the Lender,  become  effective  and shall be
binding  upon and inure to the  benefit  of the  Borrower,  the Lender and their
respective successors and assigns,  except that the Borrower may not transfer or
assign any of its rights or interest hereunder without the prior written consent
of the Lender.

      SECTION 9.6.  CAPTIONS.  Captions in this Agreement are for convenience of
reference  only and  shall not  define  or limit any of the terms or  provisions
hereof.  References  herein to Sections or provisions  without  reference to the
document in which they are contained are references to this Agreement.

      SECTION 9.7. SINGULAR AND PLURAL.  Unless the context requires  otherwise,
wherever used herein the singular  shall include the plural and vice versa,  and
the use of one gender shall also denote the others where appropriate.

      SECTION 9.8.  COUNTERPARTS.  This Agreement may be executed by the parties
on  any  number  of  separate  counterparts,  and  by  each  party  on  separate
counterparts;  each counterpart shall be deemed an original instrument;  and all
of the  counterparts  taken  together  shall be deemed to constitute one and the
same instrument.

      SECTION 9.9. FEES. The Borrower  agrees to pay or reimburse the Lender for
all costs and expenses of enforcing this Agreement or the Convertible Term Note,
or preserving its rights hereunder or under any document or instrument  executed
in connection  herewith  (including  legal fees and  reasonable  time charges of
attorneys  who may be  employees of the Lender,  whether in or out of court,  in
original or appellate proceedings or in bankruptcy).

      SECTION 9.10. CONSTRUCTION. This Agreement, the Convertible Term Note, and
any other  document or  instrument  executed  in  connection  herewith  shall be
governed by, and construed and interpreted in accordance with, the internal laws
of the State of  California  and shall be  deemed to have been  executed  in the
State of California.

                                      -11-
<PAGE>

                            [SIGNATURE PAGE FOLLOWS]

                                      -12-
<PAGE>

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

                                          BORROWER
                                          NUWAY MEDICAL, INC.

                                          /s/ Dennis Calvert
                                          -----------------------------
                                          Dennis Calvert, President

                                          LENDER

                                          /s/ investor
                                          -----------------------------

                                      -13-
<PAGE>

                                    EXHIBIT A
                              CONVERTIBLE TERM NOTE

THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE  HAVE NOT BEEN REGISTERED UNDER
THE  SECURITIES  ACT OF 1933,  AS AMENDED (THE  "SECURITIES  ACT") OR APPLICABLE
STATE  SECURITIES  LAWS,  AND,  ACCORDINGLY,  MAY NOT BE OFFERED OR SOLD  EXCEPT
PURSUANT TO AN EFFECTIVE  REGISTRATION  STATEMENT FOR SUCH SECURITIES  UNDER THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN OPINION OF
COUNSEL  REASONABLY  SATISFACTORY  TO THE  COMPANY  THAT  THERE IS AN  AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

Subscription Amount: [amount]                                 Irvine, California
                                                                   Dated: [date]

      FOR VALUE RECEIVED, NUWAY MEDICAL, INC., a corporation organized under the
laws of the  state of  Delaware  ("Borrower"),  promises  to pay to the order of
"Investor",  as that term is defined in the  Convertible  Loan  Agreement by and
between  Borrower  and  Investor  ("Convertible  Loan  Agreement")   (hereafter,
together with any subsequent holder hereof,  called "Lender"),  at its office at
"Investor's Address", as that term is defined in the Convertible Loan Agreement,
or at such other place as Lender may direct,  the "Subscription  Amount",  noted
above (the "Loan"), payable in full one year from the "Subscription Date", or at
an earlier  date as provided in Section 3.2 of the  Convertible  Loan  Agreement
(the "Maturity  Date").  This  Convertible Term Note is duly authorized issue of
the  Borrower  (the  "Issuer"),  issued on [date]  (the  "Issuance  Date"),  and
designated as its Convertible Term Note due one year from the Issuance Date (the
"Note").

      Borrower agrees to pay interest on the unpaid  principal  amount from time
to time outstanding hereunder on the dates and at the rate or rates as set forth
in the Convertible Loan Agreement.

      Payments of both  principal  and  interest  are to be made in  immediately
available funds in lawful money of the United States of America, or in Preferred
Stock of the Borrower as set forth below.

      Accrual of interest shall commence as of the Issuance Date. Interest shall
be payable by the Issuer,  at the Issuer's option,  in cash or in that number of
shares of preferred stock of the Issuer (the "Preferred  Stock") (at a price per
share calculated  pursuant to the conversion formula contained below),  upon the
earlier to occur of (i) upon  conversion of this Note pursuant to the conversion
features set forth below, or (ii) upon an Event of Default as defined below, and
if an Event of Default occurs interest due hereunder shall be payable in cash or
stock as set forth herein at the option of the Holder.  Unless  otherwise agreed
in writing by both parties  hereto,  the interest so payable will be paid to the
person in whose name this Note (or one or more predecessor  Notes) is registered
on the records of the Issuer  regarding  registration  and transfers of the Note
(the "Note  Register"),  provided,  however,  that the Issuer's  obligation to a
transferee of this Note arises only if such transfer,  sale or other disposition
is made in accordance  with the terms and conditions  contained in the Agreement
and this Note.

                                       -1-
<PAGE>

      The Note is subject to the following additional provisions:

            1. The Issuer  shall be entitled to  withhold  from all  payments of
principal and/or interest of this Note any amounts required to be withheld under
the applicable provisions of the U.S. Internal Revenue Code of 1986, as amended,
or other applicable laws at the time of such payments.

            2. This Note has been issued  subject to investment  representations
of the  original  Holder  hereof and may be  transferred  or  exchanged  only in
compliance with the Securities Act and applicable  state  securities laws and in
compliance with the restrictions on transfer provided in the Agreement. Prior to
the due  presentment for such transfer of this Note, the Issuer and any agent of
the Issuer may treat the  person in whose name this Note is duly  registered  on
the  Issuer's  Note  register as the owner  hereof for the purpose of  receiving
payment as herein provided and all other  purposes,  whether or not this Note is
overdue,  and  neither the Issuer nor any such agent shall be affected by notice
to the contrary.  The transferee  shall be bound,  as the original Holder by the
same representations and terms described herein and under the Agreement.

            3. The Holder or Issuer may,  at its  option,  at any time up to and
including  [date],  convert  the  principal  amount of this Note or any  portion
thereof,  and any accrued interest  thereon,  into [number] shares of fully paid
and non assessable Series A Preferred Stock of the Issuer ("Conversion Shares").
The right to convert the Note may be  exercised by  telecopying  an executed and
completed  notice of conversion  (the "Notice of  Conversion")  to the Holder or
Issuer.  Each  business day on which a Notice of  Conversion  is  telecopied  in
accordance with the provisions  hereof shall be deemed a "Conversion  Date". The
Issuer will transmit the certificates  representing  Conversion  Shares issuable
upon such  conversion of the Note (together with the  certificates  representing
the Note not so  converted)  to the Holder via express  courier,  by  electronic
transfer  (if  applicable)  or  otherwise  within  ten  Business  Days after the
Conversion  Date,  provided,  the Issuer has received the original Note being so
converted  from the Holder.  If the Company has not received  the original  Note
being  converted  within three  Business Days after  Conversion  Date,  then the
Issuer shall  transmit  the  certificates  representing  the  Conversion  Shares
issuable  upon  such  conversion  of the Note  (together  with the  certificates
representing  the Note not so converted) to the Holder via express  courier,  by
electronic transfer (if applicable) or otherwise within five business days after
receipt of the original Notice of Conversion and original Note being converted.

            4. The  principal  amount of this  Note,  and any  accrued  interest
thereon,  shall be reduced as per that principal  amount indicated on the Notice
of Conversion  upon the proper receipt by the Holder of such  Conversion  Shares
due upon such Notice of Conversion.

                                      -2-
<PAGE>

            5. The number of Conversion Shares shall be adjusted as follows:

                  a. If the Issuer shall at any time  subdivide its  outstanding
shares of Common  Stock  into a greater  number of shares of Common  Stock,  the
number of  Conversion  Shares in effect  immediately  prior to such  subdivision
shall be  proportionately  increased,  and  conversely,  in case the outstanding
shares of Common  Stock  shall be  combined  into a smaller  number of shares of
Common  Stock,  the  Conversion  Price  in  effect  immediately  prior  to  such
combination shall be proportionately reduced.

            6. No provision of this Note shall alter or impair the obligation of
the Issuer,  which is absolute and  unconditional,  upon an Event of Default (as
defined below), to pay the principal of, and interest on this Note at the place,
time, and rate, and in the coin or currency herein prescribed.

            7. The Issuer hereby  expressly  waives demand and  presentment  for
payment,  notice on nonpayment,  protest, notice of protest, notice of dishonor,
notice of  acceleration  or intent to  accelerate,  and  diligence in taking any
action to  collect  amounts  called  for  hereunder  and shall be  directly  and
primarily  liable  for the  payment  of all sums  owing and to be owing  hereon,
regardless  of and  without any  notice,  diligence,  act or omission as or with
respect to the collection of any amount called for hereunder.

            8. If one or more "Events of Default"  shall occur,  as that term is
used in the Convertible Loan Agreement,  then, or at any time thereafter, and in
each and every such case, unless such Event of Default shall have been waived in
writing by the Holder  (which  waiver  shall not be deemed to be a waiver of any
subsequent  default) or cured as provided  herein,  at the option of the Holder,
and in the Holder's sole discretion,  the Holder may consider this Note (and all
interest  through  such  date)  immediately  due and  payable  in cash,  without
presentment,  demand  protest  or notice of any  kind,  all of which are  hereby
expressly waived,  anything herein or in any note or other instruments contained
to the  contrary  notwithstanding,  and  Holder  may  immediately,  and  without
expiration  of any period of grace,  enforce any and all of the Holder's  rights
and remedies  provided  herein or any other  rights or remedies  afforded by law
(including but not limited to  consequential  damages if any). It is agreed that
in the event of such  action,  such  Holder  shall be  entitled  to receive  all
reasonable fees, costs and expenses incurred,  including without limitation such
reasonable fees and expenses of attorneys. The parties acknowledge that a change
in control  of the  Issuer  shall not be deemed to be an Event of Default as set
forth herein.

            9. In  case  any  provision  of  this  Note  is  held by a court  of
competent  jurisdiction  to be  excessive  in  scope  or  otherwise  invalid  or
unenforceable, such provision shall be adjusted rather than voided, if possible,
so that it is enforceable to the maximum extent  possible,  and the validity and
enforceability  of the remaining  provisions of this Note will not in any way be
affected or impaired thereby.

                                      -3-
<PAGE>

            10. The Holder shall have the right,  if applicable,  to include all
of the Conversion Shares underlying this Note (the "Registrable  Securities") as
part of any  registration  of  securities  filed by the  Issuer  (other  than in
connection with a transaction  contemplated by Rule 145(a) promulgated under the
Act or  pursuant  to Form S-4 or S-8) and must be  notified  in  writing of such
filing as soon as reasonably  practicable;  PROVIDED,  HOWEVER,  that the Holder
agrees it shall not have any  piggy-back  registration  rights  pursuant to this
Note if the  Conversion  Shares  underlying  this Note may be sold in the United
States pursuant to the provisions of Rule 144 without any restriction on resale.
Holder shall have five business days after receipt of the aforementioned  notice
from the Issuer,  to notify the Issuer in writing as to whether the Issuer is to
include  Holder or not include  Holder as part of such  registration;  PROVIDED,
HOWEVER,   that  if  any  registration  pursuant  to  this  paragraph  shall  be
underwritten,  in whole or in part, the Issuer may require that the  Registrable
Securities requested for inclusion pursuant to this paragraph be included in the
underwriting on the same terms and conditions as the securities  otherwise being
sold through the underwriters.  If in the good faith judgment of the underwriter
evidenced  in  writing of such  offering  only a limited  number of  Registrable
Securities  should be included  in such  offering,  or no such shares  should be
included,  the Holder, and all other selling  stockholders,  shall be limited to
registering  such  proportion  of their  respective  shares  as shall  equal the
proportion  that the number of shares of selling  stockholders  permitted  to be
registered by the  underwriter in such offering bears to the total number of all
shares then held by all selling  stockholders  desiring to  participate  in such
offering. All registration expenses incurred by the Issuer in complying with the
terms  of this  Note  shall be paid by the  Issuer,  exclusive  of  underwriting
discounts, commissions and legal fees and expenses for counsel to the Holder.

            11.  This Note does not  entitle  the  Holder  hereof to any  voting
rights or other rights as a  shareholder  of the Issuer prior to the  conversion
into Preferred Stock thereof, except as provided by applicable law. If, however,
at the time of the surrender of this Note and conversion the Holder hereof shall
be entitled to convert this Note, the  Conversion  Shares so issued shall be and
be deemed to be issued to such  holder as the record  owner of such shares as of
the close of business on the Conversion Date.

            12.  Except as expressly  provided  herein or as required by law, so
long as this Note  remains  outstanding,  the  Issuer  shall  not,  without  the
approval by vote or written  consent by the  Holder,  take any action that would
adversely affect the rights, preferences or privileges of this Note.

            IN WITNESS WHEREOF, the Issuer has caused this Convertible Term Note
to be duly executed by an officer thereunto duly authorized.

NUWAY MEDICAL, INC.

By
  ---------------------------
Name: Dennis Calvert, its President

                                      -4-
<PAGE>

NOTICE OF CONVERSION

      (To be Executed by the Registered Holder in order to Convert the Note)

      The undersigned hereby  irrevocably  elects to convert  ___________ of the
principal amount of the above Note into ___________ Shares of Series A Preferred
Stock of NuWay Medical,  Inc. according to the conditions hereof, as of the date
written below.

Date of Conversion:
                    ---------------------------------

Signature:
           ------------------------------------------

Name:
     ------------------------------------------------

Address:
        ---------------------------------------------

Date of Conversion:
                    ---------------------------------

Signature:
           ------------------------------------------

Name:
     ------------------------------------------------

Address:
        ---------------------------------------------

                                      -5-

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