Document:

FORM OF CONVERTIBLE 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: $XXX.XX                                  Irvine, California

                                                Subscription Date: _______, 2005

      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  below  (hereafter,  together  with  any
subsequent  holder  hereof,  called  "Holder"),  at its  office  at  "Investor's
Address",  as that term is defined  below,  or at such other place as Holder may
direct, the "Subscription Amount", noted above (the "Loan"),  payable on January
31, 2007, or at an earlier date as provided herein (the "Maturity  Date").  This
Convertible Note is duly authorized issue of the Borrower (the "Issuer"), issued
on  the  Subscription  Date  (the  "Issuance  Date"),   and  designated  as  its
Convertible Note due January 31, 2007 (the "Note").

      The Borrower agrees to pay interest on the unpaid  principal amount of the
Loan from time to time  outstanding  hereunder at the following  rates per year,
compounded annually: (i) before maturity of the Loan, whether by acceleration or
otherwise,  at the rate per annum  equal to ten  percent  (10%);  (ii) after the
maturity of the Loan,  whether by  acceleration  or otherwise,  until paid, at a
rate per annum equal to fifteen percent (15%).

      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 Common
Stock of the Borrower as set forth below. In the event that the Borrower chooses
to pay the Note prior to the Maturity  Date,  the Borrower  shall give notice to
the Holder of such  election,  and the Holder shall have 10 days  thereafter  to
elect, if the Holder so chooses,  to convert the Note into Common Stock pursuant
to the terms 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 Common stock of the Issuer (the "Common  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.

<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,  subject to the  "Conversion
Contingencies"  (set forth below),  at any time convert the principal  amount of
this Note or any portion  thereof,  and any  accrued  interest  thereon,  into a
number  shares  of fully  paid and non  assessable  Common  Stock of the  Issuer
pursuant to the following  formula:  the  Subscription  Amount divided by $0.025
("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.  The Conversion of this note may require that the
Issuer amend its charter to increase the number of common shares  authorized and
therefore, the conversion may not take place prior to the Issuer's completion of
that  process.  Any  delay  due to such  circumstance  shall  not be an event of
default  under this Note.  Issuer  shall  promptly  take  action to affect  such
amendments to its charter.

      4. Conversion  Contingencies:  Notwithstanding anything else herein to the
contrary,  the Holder shall not have the right,  and the Company  shall not have
the  obligation,  to convert all or any  portion of this Note,  unless and until
each of the following events has first occurred:  (i) the Company's stockholders
have approved an increase in the number of shares of common stock  authorized by
the Company's Certificate of Incorporation in an amount not less than the amount
required  to permit all  warrants  issued in this  series to be  converted  into
shares of the  Company's  Common  Stock as provided  herein,  at a validly  held
meeting of stockholders at which a quorum is present and acting throughout;  and
(ii) the  Company has filed with the  Secretary  of State of State of Delaware a
Certificate of Amendment to the Company's  Certificate of Incorporation to amend
its  Certificate  of  Incorporation  to increase  the number of shares of common
stock authorized by the Company's Certificate of Incorporation.

                                      -2-
<PAGE>

      5. 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.

      6. 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.

      7. 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.

      8. 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.  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

            c.  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

            d.   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

            e. Insolvency.  The Borrower 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.

      9. If one or more "Events of Default"  shall occur,  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 elect
to consider this Note (and all interest  through such date)  immediately due and
payable.  In order to so elect,  the Holder must deliver  written  notice of the

                                      -3-
<PAGE>

election and the amount due to the Borrower via certified  mail,  return receipt
requested,  at the Borrower's  address as set forth herein (or any other address
provided to the Holder),  and  thereafter  the Borrower  shall have ten business
days upon  receipt to cure the Event of  Default,  pay the Note,  or convert the
amount due on the Note pursuant to the conversion formula set forth above. 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.

      10. 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.

      11. This Note does not entitle the Holder  hereof to any voting  rights or
other rights as a stockholder of the Issuer prior to the conversion  into Common
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.

      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

ACKNOWLEDGED AND ACCEPTED:

      Investor Name (print):
                            --------------------------

      Investor Signature:
                         -----------------------------

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

                         -----------------------------

                                      -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 Common 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:
        ----------------------------------
        ----------------------------------

                                      -1-THIS WARRANT AND THE SECURITIES REPRESENTED BY THIS WARRANT HAVE
      NOT BEEN  REGISTERED  UNDER  THE  SECURITIES  ACT OF 1933 OR THE
      SECURITIES  ACT OF ANY STATE AND MAY NOT BE SOLD OR  TRANSFERRED
      UNLESS THERE IS AN EFFECTIVE  REGISTRATION  STATEMENT UNDER SUCH
      ACTS COVERING  THIS WARRANT AND THE  SECURITIES  REPRESENTED  BY
      THIS WARRANT OR PURSUANT TO AN EXEMPTION  FROM THE  REGISTRATION
      AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACTS.

                               NUWAY MEDICAL, INC.

                    FORM OF WARRANT TO PURCHASE COMMON STOCK

                               Issued: XXXX, 2005

WARRANT NO. XXXX

      THIS  CERTIFIES  THAT, for value  received,  XXXXXXX,  an individual  (the
"Holder"), is entitled to subscribe for and purchase from NUWAY MEDICAL, INC., a
corporation  organized under the laws of the state of Delaware (the  "Company"),
subject to Section 1(b) hereof, commencing at the time periods prescribed herein
and ending at 5:00 p.m.  California  on  January  31,  2008,  XXXX  shares  (the
"Shares")  of common  stock,  par value,  $0.00067,  of the Company (the "Common
Stock"). The exercise price for each Share subject to this Warrant (the "Warrant
Price")  is equal to  $0.05.  The  number of Shares  and the  Warrant  Price are
subject  to  adjustment  from  time to time as  provided  in  Section  4 of this
Warrant.

      This Warrant is issued in  connection  with and as  consideration  for the
Convertible Note dated the date hereof and issued by the Company in favor of the
Holder,  which Convertible Note has been issued pursuant the Holder's investment
in the Company.

      1. Method of Exercise;  Payment; Issuance of New Warrant. (a) The purchase
right represented by this Warrant may be exercised by the Holder, in whole or in
part,  subject to the limitation set forth below,  and from time to time, by (i)
the  surrender of this Warrant  (with a notice of exercise in the form  attached
hereto as Exhibit A, duly  executed) at the principal  office of the Company and
(ii) the  payment  to the  Company,  by check  or wire  transfer  of funds to an
account specified in writing by the Company, of an amount equal to the aggregate
Warrant Price.  The Shares so purchased,  representing  the aggregate  number of
shares  specified  in the  executed  Exhibit A, shall be delivered to the Holder
within a reasonable  time,  not  exceeding ten (10)  business  days,  after this
Warrant  shall  have been so  exercised.  Upon  receipt  by the  Company of this
Warrant  at the  office  of  the  Company,  in  proper  form  for  exercise  and
accompanied by the amount equal to the aggregate Warrant Price, the Holder shall
be deemed to be the holder of record of the Shares  issuable upon such exercise,
notwithstanding  that the stock  transfer  books of the  Company  shall  then be
closed or that certificates  representing such Shares shall not then be actually
delivered to the Holder.

<PAGE>

            (b) Notwithstanding anything else herein to the contrary, the Holder
shall not have the right,  and the  Company  shall not have the  obligation,  to
exercise  all or any  portion  of this  Warrant,  unless  and until  each of the
following  events  has  first  occurred:  (i) the  Company's  stockholders  have
approved an increase in the number of shares of common stock  authorized  by the
Company's  Certificate  of  Incorporation  in an amount not less than the amount
required  to permit all  warrants  issued in this  series to be  converted  into
shares of the  Company's  Common  Stock as provided  herein,  at a validly  held
meeting of stockholders at which a quorum is present and acting throughout;  and
(ii) the  Company has filed with the  Secretary  of State of State of Delaware a
Certificate of Amendment to the Company's  Certificate of Incorporation to amend
its  Certificate  of  Incorporation  to increase  the number of shares of common
stock authorized by the Company's Certificate of Incorporation.

            (c) If this  Warrant  shall have been  exercised  only in part,  the
Company shall,  at the time of delivery of such Shares,  deliver to the Holder a
new Warrant  evidencing the right to purchase the remaining Shares called for by
this Warrant,  which new Warrant shall in all other  respects be identical  with
this Warrant, or, at the request of Holder,  appropriate notation may be made on
this Warrant which shall then be returned to Holder.

      2. Stock Fully Paid;  Reservation of Shares. All Shares that may be issued
upon the exercise of the rights represented by this Warrant will, upon issuance,
be fully paid and  nonassessable,  and free from all preemptive  rights,  taxes,
liens and charges with respect to the issue thereof; provided, however, that the
Company  shall not be required  to pay any  transfer  taxes with  respect to the
issue of shares in any name other  than that of the  registered  holder  hereof.
During the period  within  which the rights  represented  by this Warrant may be
exercised,  the Company will at all times have authorized,  and reserved for the
purpose of the issue upon  exercise of the  purchase  rights  evidenced  by this
Warrant,  a  sufficient  number of shares of  Common  Stock to  provide  for the
exercise of the rights  represented  by this  Warrant.  The Company shall at all
times  take all such  action  and  obtain  all such  permits or orders as may be
necessary to enable the Company  lawfully to issue such Common Stock as duly and
validly  issued,  fully paid and  nonassessable  shares upon exercise in full of
this Warrant.

      3. Fractional  Shares. No fractional shares of Common Stock will be issued
in connection with any exercise hereunder, but in lieu of such fractional shares
the Company shall make a cash payment therefor upon the basis of the Fair Market
Value of such Shares.

      4.  Adjustment.  This Warrant shall be subject to adjustment  from time to
time upon the occurrence of certain events, as follows:

            (a)  Adjustment  for Stock Splits and  Combinations.  If the Company
shall  at any  time or from  time  to  time  after  the  date  hereof  effect  a
subdivision of the  outstanding  Common Stock,  the Warrant Price then in effect
immediately before that subdivision shall be proportionately  decreased.  If the
Company shall at any time or from time to time after the date hereof combine the
outstanding  Common Stock, the Warrant Price then in effect  immediately  before
the combination shall be  proportionately  increased.  Any adjustment under this
subsection  shall  become  effective  at the close of  business  on the date the
subdivision or combination becomes effective.

            (b) Adjustment for Certain Dividends and Distributions. In the event
the Company at any time or from time to time after the date hereof shall make or
issue a dividend or other  distribution  payable in additional  shares of Common
Stock,  then and in each such event the Warrant  Price shall be  decreased as of
the time of such issuance, by multiplying the Warrant Price by a fraction:

                                      -2-
<PAGE>

            (x)   the  numerator of which shall be the total number of shares of
                  Common Stock issued and outstanding  immediately  prior to the
                  time of such issuance; and

            (y)   the  denominator  of which shall be the total number of shares
                  of Common Stock issued and  outstanding  immediately  prior to
                  the time of such  issuance plus the number of shares of Common
                  Stock issuable in payment of such dividend or distribution.

            (c)  Adjustment  of Number of Shares.  Upon each  adjustment  of the
Warrant  Price  pursuant to either  Section  4(a) or 4(b) of this  Warrant,  the
number of shares of Common Stock purchasable upon exercise of this Warrant shall
be adjusted to the number of shares of Common  Stock,  calculated to the nearest
one hundredth of a share, obtained by multiplying the number of shares of Common
Stock purchasable  immediately prior to such adjustment upon the exercise of the
Warrant by the Warrant Price in effect prior to such adjustment and dividing the
product so obtained by the new Warrant Price.

            (d) Adjustment for Reclassification,  Exchange and Substitution.  If
the Common Stock issuable upon the exercise of this Warrant are changed into the
same or different number of shares of any class or classes of stock,  whether by
recapitalization,  reclassification  or otherwise  (other than a subdivision  or
combination  provided  for in Section  4(a) above,  a dividend  or  distribution
provided for in Section 4(b) above, or a reorganization,  merger,  consolidation
or sale of assets,  provided for in Section  4(e)  below),  then and in any such
event the Holder shall have the right  thereafter  to exercise this Warrant into
the  kind  and  amount  of stock  and  other  securities  receivable  upon  such
recapitalization,  reclassification or other change, by holders of the number of
shares  of Common  Stock  for  which  this  Warrant  might  have been  exercised
immediately prior to such recapitalization, reclassification or change.

            (e) Reorganization,  Mergers,  Consolidations or Sales of Assets. If
at any time or from time to time there is a capital reorganization of the Common
Stock  (other than a  subdivision  or  combination  provided for in Section 4(a)
above,  a dividend or  distribution  provided  for in Section  4(b) above,  or a
reclassification  or exchange of shares provided for in Section 4(d) above) or a
merger or consolidation of the Company with or into another entity, or a sale of
all or  substantially  all of the Company's  properties  and assets to any other
person or entity, then, as a part of such reorganization,  merger, consolidation
or sale, provision shall be made so that the Holder shall thereafter be entitled
to receive upon  exercise of this Warrant the number of shares of stock or other
securities,  money  or  property  of the  Company,  or of the  successor  entity
resulting from such merger or consolidation or sale, to which a holder of Common
Stock  deliverable  upon  conversion  would have been  entitled on such  capital
reorganization, merger, consolidation, or sale. The Company shall not effect any
reorganization,  merger,  consolidation or sale unless prior to the consummation
thereof each entity or person  (other than the Company)  that may be required to
deliver any cash, securities or other property upon the exercise of this Warrant
shall assume, by written  instrument  delivered to the Holder, the obligation to
deliver to the Holder such cash,  securities or other  property as in accordance
with the  foregoing  provisions  the  Holder may be  entitled  to  receive.  The
foregoing  provisions of this Section 4(e) shall  similarly  apply to successive
reorganizations, mergers, consolidations and sales.

            (f) No  Impairment.  The  Company  will  not,  by  amendment  of its
Articles of  Incorporation  or through any  reorganization,  transfer of assets,
consolidation,  merger,  dissolution,  issue or sale of  securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or  performed  hereunder by the Company but will at all

                                      -3-
<PAGE>

times in good faith  assist in the carrying  out of all the  provisions  of this
Section and in the taking of all such action as may be necessary or  appropriate
in order to protect  the  conversion  rights of the Holder  against  dilution or
other impairment.  Without limiting the generality of the foregoing, the Company
will not issue any capital stock of any class which is preferred as to dividends
or  as  to  the  distribution  of  assets  upon  the  voluntary  or  involuntary
dissolution, liquidation or winding up of the Company.

            (g) Notice of  Adjustments.  Whenever this Warrant shall be adjusted
pursuant to this Section 4, the Company  shall make a  certificate  signed by an
officer of the Company setting forth, in reasonable  detail, the event requiring
the  adjustment,  the  amount  of the  adjustment,  the  method  by  which  such
adjustment was calculated,  and the new Warrant Price and the type or the number
of Shares  purchasable  after giving effect to such adjustment,  and shall cause
copies of such  certificate to be mailed (by first class mail,  postage prepaid)
to the Holder.

      5. The Company's Obligation to Make Payments.

            (a)  Dividends  and  Distributions.  In the event the Company at any
time or from time to time after the date  hereof  shall make or issue a dividend
or other distribution,  whether payable in cash, securities or other property of
the Company, with respect to any of its capital stock for which an adjustment is
not made pursuant to Section 4 of this Warrant, then and in each such event, the
Company  shall  concurrently  make a cash  payment  to the  Holder  equal to the
product of (i) the quotient obtained by dividing (x) the amount of cash plus the
fair value of any property or securities distributed by (y) the number of shares
of Common Stock outstanding on the record date for such dividend or distribution
and (ii) the number of Shares on such record date.

            (b)  Redemption  of Capital  Stock.  In the event the Company at any
time or from time to time after the date hereof shall  repurchase  or redeem any
of its  capital  stock or any rights,  including  without  limitation,  options,
warrants  or other  convertible  or  exchangeable  securities,  to acquire  such
capital stock, then and in each such event, the Company shall  concurrently make
a cash payment to the Holder  equal to the product of (i) the quotient  obtained
by dividing (x) the aggregate amount of cash and the aggregate fair value of any
property  paid out by the  Company in  connection  with any such  repurchase  or
redemption  by (y) the number of shares of Common Stock  outstanding  on a fully
diluted basis immediately after such repurchase or redemption and (2) the number
of Shares.

      6. Notice of Record Date. In the event:

            (1)   that  the   Company   declares  a   dividend   (or  any  other
                  distribution) on any of its capital stock  (including  without
                  limitation, its Common Stock);

            (2)   that the  Company  repurchases  or redeems  any of its capital
                  stock (including without limitation,  its Common Stock) or any
                  rights to acquire such capital stock;

            (3)   that the Company subdivides or combines its outstanding shares
                  of Common Stock;

            (4)   of  any  reclassification  of  the  Common  Stock,  or of  any
                  consolidation, merger or share exchange of the Company into or
                  with another  entity,  or of the sale of all or  substantially
                  all of the assets of the Company;

                                      -4-
<PAGE>

            (5)   of the  involuntary or voluntary  dissolution,  liquidation or
                  winding up of the Company; or

            (6)   of any offer of its Common Stock or any rights to acquire such
                  Common Stock for consideration  paid per share of Common Stock
                  less than the Warrant Price then in effect.

then the  Company  shall  notify  the  Holder at least 30 days prior to the date
specified in (A), (B) or (C) below, in writing stating:

            (A) the  record  date of such  dividend,  distribution,  repurchase,
      redemption,  subdivision  or  combination,  or,  if a record  is not to be
      taken,  the date as to which the  holders of Common  Stock of record to be
      entitled  to  such   dividend,   distribution,   repurchase,   redemption,
      subdivision or combination are to be determined;

            (B) the date on which such reclassification,  consolidation, merger,
      share exchange,  sale, dissolution,  liquidation or winding up is expected
      to become effective,  and the date as of which it is expected that holders
      of Common  Stock of record  shall be entitled to exchange  their shares of
      Common  Stock  for  securities  or other  property  deliverable  upon such
      reclassification,  consolidation, merger, sale, dissolution or winding up;
      or

            (C) the date on  which  such  offering  of its  Common  Stock or any
      rights to acquire  such Common Stock for  consideration  paid per share of
      Common   Stock  less  than  the  Warrant   Price  is  expected  to  become
      consummated.

      7. Compliance with Securities Act; Disposition of Warrant or Common Stock.

            (a)  Compliance  with  Securities  Act.  The Holder,  by  acceptance
hereof,  agrees  that this  Warrant  and the Shares to be issued  upon  exercise
hereof are being  acquired for  investment  and that such Holder will not offer,
sell or otherwise  dispose of this Warrant or any Common Stock to be issued upon
exercise hereof except under  circumstances which will not result in a violation
of the  Securities  Act of 1933, as amended (the "Act").  All Shares issued upon
exercise of this Warrant (unless registered under the Act or sold or transferred
pursuant to Rule 144  promulgated  under the Act) shall be stamped or  imprinted
with a legend in substantially the following form:

      "THIS SECURITY HAS NOT BEEN REGISTERED  UNDER THE SECURITIES ACT
      OF 1933 OR THE SECURITIES  ACTS OF ANY STATE AND MAY NOT BE SOLD
      OR  TRANSFERRED  UNLESS  THERE  IS  AN  EFFECTIVE   REGISTRATION
      STATEMENT  UNDER SUCH ACTS COVERING THIS SECURITY OR PURSUANT TO
      AN  EXEMPTION  FROM THE  REGISTRATION  AND  PROSPECTUS  DELIVERY
      REQUIREMENTS OF SUCH ACTS."

            (b)  Disposition  of  Warrant  or  Shares.  Subject to the terms and
conditions of this Warrant and applicable  securities laws, this Warrant and the
rights represented by this Warrant may be transferred,  assigned or pledged,  in
whole or in part with prior written notice to the Company. Any transfer shall be
accompanied by the Notice of Transfer form attached hereto as Exhibit B.

                                      -5-
<PAGE>

      8. Rights as  Shareholders.  The Holder  shall not, by virtue  hereof,  be
entitled to any rights of a shareholder in the Company, either at law or equity,
and the rights of the Holder are limited to those  expressed in this Warrant and
are not enforceable against the Company except to the extent set forth herein.

      9. Representations and Warranties.  The Company represents and warrants to
the Holder as follows:

            (a) This  Warrant  has been  duly  authorized  and  executed  by the
Company and is a valid and binding  obligation  of the  Company  enforceable  in
accordance with its terms;

            (b) The Shares have been duly  authorized  and reserved for issuance
by the Company and,  when issued in accordance  with the terms  hereof,  will be
validly issued, fully paid and nonassessable;

            (c) The rights, preferences,  privileges and restrictions granted to
or  imposed  upon the  Shares and the  holders  thereof  are as set forth in the
Company's Certificate of Incorporation;

            (d) The  execution  and  delivery of this  Warrant are not,  and the
issuance of the Shares  upon  exercise of this  Warrant in  accordance  with the
terms  hereof  will  not  be,   inconsistent  with  the  Company's  Articles  of
Incorporation or by-laws,  do not and will not contravene any law,  governmental
rule or regulation, judgment or order applicable to the Company, and, except for
consents  that have  already been  obtained by the Company,  do not and will not
conflict with or contravene any provision of, or constitute a default under, any
indenture,  mortgage,  contract  or other  instrument  of which the Company is a
party or by which it is bound or require the consent or approval  of, the giving
of notice to, the registration with or the taking of any action in respect of or
by, any federal,  state or local government authority or agency or other person;
and

      10.  Modification and Waiver. This Warrant and any provision hereof may be
changed,  waived,  discharged  or  terminated  only by an  instrument in writing
signed by the party against which enforcement of the same is sought.

      11. Notices.  Except as otherwise  expressly  provided herein, all notices
and other  communications  provided for hereunder shall be in writing (including
telegraphic,  telex, telecopier or cable communication) and mailed, telegraphed,
telexed, telecopied,  cabled or delivered to the applicable party at its address
specified  opposite its  signature  below,  or at such other address as shall be
designated by such party in a written notice to the other.  All such notices and
communications shall, when mailed, telegraphed, telexed, telecopied or cabled or
sent by overnight courier,  be effective when deposited in the mails,  delivered
to the telegraph company,  cable company or overnight  courier,  as the case may
be, or sent by telex or telecopier.

      12. Descriptive Headings. The descriptive headings of the several sections
of this Warrant are inserted for  convenience  only and do not constitute a part
of this Warrant.

      13.  Governing  Law.  THIS WARRANT AND THE RIGHTS AND  OBLIGATIONS  OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF CALIFORNIA.

      14. Binding  Effect on Successors.  This Warrant shall be binding upon any
entity succeeding the Company by merger,  consolidation or acquisition of all or
substantially  all of the Company's  assets,  and all of the  obligations of the
Company  relating to the Common Stock issuable upon the exercise of this Warrant
shall  survive the  exercise,  and  termination  of this  Warrant and all of the

                                      -6-
<PAGE>

covenants  and  agreements  of the  Company  shall  inure to the  benefit of the
successors and assigns of the Holder.

      15.  Severability.  In case any one or more of the provisions contained in
this Warrant  shall be invalid,  illegal or  unenforceable  in any respect,  the
validity,  legality and  enforceability  of the remaining  provisions  contained
herein shall not in any way be affected or impaired  thereby.  The parties shall
endeavor  in  good  faith  negotiations  to  replace  the  invalid,  illegal  or
unenforceable  provisions  with valid  provisions,  the economic effect of which
comes as close as  possible  to that of the  invalid,  illegal or  unenforceable
provisions.

      16. Lost  Warrants or Stock  Certificates.  The Company  covenants  to the
Holder that upon receipt of evidence  reasonably  satisfactory to the Company of
the  loss,  theft,  destruction,  or  mutilation  of this  Warrant  or any stock
certificate  and,  in the case of any such  loss,  theft  or  destruction,  upon
receipt of an indemnity  reasonably  satisfactory to the Company, or in the case
of any such mutilation upon surrender and  cancellation of such Warrant or stock
certificate,  the  Company  will  make  and  deliver  a  new  Warrant  or  stock
certificate,  of like tenor, in lieu of the lost, stolen, destroyed or mutilated
Warrant or stock certificate.

                            [Signature Page Follows]

                                      -7-
<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Warrant to be executed and
delivered  by its  duly  authorized  officer  on the day and  year  first  above
written.

                                        NUWAY MEDICAL, INC.

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

                                           Address: 2603 Main Street, Suite 1155
                                                    Irvine, California 92614
                                                    Attention: Dennis Calvert
                                                    Facsimile: 949 666-7297

ACKNOWLEDGED AND ACCEPTED:

XXXXX

By:
   -----------------------
   Name:
   Title:

Address:

                                      -8-
<PAGE>

                                    EXHIBIT A

                               NOTICE OF EXERCISE

TO:   NUWAY MEDICAL, INC.

      (1) The undersigned hereby elects to purchase __________ shares of Common
Stock of NUWAY MEDICAL, INC. pursuant to the terms of the attached Warrant, and,
unless such Warrant allows the exercise to be "cashless," tenders herewith
payment of the Warrant Price for such shares in full.

      (2) Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:

                                           -------------------------------------
                                                          (Name)

                                           -------------------------------------
                                                          (Name)

      (3) Please issue a new Warrant for the unexercised portion of the attached
Warrant in the name of the undersigned or in such other name as is specified
below:

                                           -------------------------------------
                                                          (Name)

                                           -------------------------------------
                                                          (Name)

                                           -------------------------------------
                                                          (Signature)

                                           -------------------------------------
                                                          (Date)

<PAGE>

                                    EXHIBIT B

                               NOTICE OF TRANSFER
                  (To be signed only upon transfer of Warrant)

      FOR VALUE RECEIVED,  the undersigned  hereby sells,  assigns and transfers
unto  ____________________________________________  the right represented by the
attached  Warrant to  purchase  __________  shares of the Common  Stock of NUWAY
MEDICAL,   INC.,   to  which  the  attached   Warrant   relates,   and  appoints
_____________________  as Attorney to transfer  such right on the books of NUWAY
MEDICAL, INC., with full power of substitution in the premises.

      Dated:
            ------------------------

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

                                          --------------------------------------

                                          --------------------------------------
                                                         (Address)

Signed in the presence of:
                          ----------------------------

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