8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): June 3, 2008

ONSTREAM MEDIA CORPORATION

(Exact Name of Registrant as Specified in Charter)

Florida

(State of Jurisdiction of Incorporation)

000-22849	65-0420146
(Commission File Number)	(I.R.S. Employer Identification No.)

1291 SW 29 Avenue, Pompano Beach, Florida 33069

(Address of Principal Executive Offices) (Zip Code)

(954) 917-6655

(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[]Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[]Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[]Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[]Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01	Entry into a Material Definitive Agreement
Item 3.02	Unregistered Sales of Equity Securities

In December 2007, we entered into an equipment financing line of credit arrangement with several individuals under which we could borrow up to an aggregate of $1.5 million for equipment purchases. As of April 3, 2008, we had not drawn any funds under this arrangement and accordingly we notified the individuals that we were canceling the line of credit arrangement as of that date so that we might put together an alternative financing structure for the same purpose - financing software and equipment purchased by us both prior to and after the date of the financing - and up to the same dollar amount.

Commencing June 3, 2008 we received an aggregate of $950,000 from 6 accredited individuals and other entities (the “Lenders”), under a software and equipment financing arrangement which also allows for total borrowings of up to $1.5 million. We issued Notes to those Lenders, which are secured by specifically designated software and equipment owned by us with a cost basis of approximately $1.5 million, as well as a subordinated lien on certain of our other assets to the extent that the designated software and equipment, or other software and equipment added to the collateral at a later date, is not considered sufficient security for the loan. Under this arrangement, the Lenders will receive 10,000 restricted ONSM common shares for each $100,000 (one “Unit”) lent to us, as well as interest at 12% per annum. Interest is payable every 6 months in cash or at our option, in restricted ONSM common shares, based on a conversion price equal to seventy-five percent (75%) of the average ONSM closing price for the thirty (30) trading days prior to the date the applicable payment is due. The first interest payment date is October 31, 2008.

We may prepay the Notes, which have a three (3) year maturity date, at any time upon ten (10) days' prior written notice to the Lenders during which time the Lender may choose to convert the Note. In the event of such repayment, all interest accrued and due for the remaining unexpired loan period is due and payable and may be paid in cash or restricted ONSM common shares in accordance with the above formula.

The outstanding principal is due on demand in the event a payment default is uncured ten (10) business days after written notice. Lenders holding in excess of 50% of the outstanding principal amount of the Notes may declare a default and may take steps to amend or otherwise modify the terms of the Notes and related security agreement.

The Notes may be converted to restricted ONSM common shares at any time six (6) months after issuance and prior to their three (3) year maturity date, at the Lender’s option, based on a conversion price equal to seventy-five percent (75%) of the average ONSM closing price for the thirty (30) trading days prior to the date of conversion, but in no event may the conversion price be less than $0.80 per share. In the event the Notes are converted prior to maturity, interest on the Notes for the remaining unexpired loan period will be due and payable in additional restricted ONSM common shares in accordance with the same formula. Notwithstanding the above, we have the right in our sole discretion to allow the Lender to convert the Note into restricted ONSM common shares during the first six months after issuance for any reason.

47,500 restricted ONSM common shares will be issued and $66,500 (7%) will be paid in cash (and/or restricted ONSM common shares using a conversion formula similar to those above) to placement agents for their services in connection with this $950,000 financing tranche.

All of the financing transaction securities were offered and sold without such offers and sales being registered under the Securities Act of 1933, as amended (together with the rules and regulations of the Securities and Exchange Commission (the "SEC") promulgated thereunder, the "Securities Act"), in reliance on exemptions therefrom as provided by Section 4(2) and Regulation D of the Securities Act of 1933, for securities issued in private transactions to accredited investors.

Item 9.01           Financial Statements and Exhibits

(d) Exhibits

Exhibit No.	Description
4.1	Form of 12% Convertible Secured Note
10.1	Form of Subscription Agreement for 12% Convertible Secured Notes
10.2	Form of Security Agreement for 12% Convertible Secured Notes

The foregoing descriptions are qualified in their entirety by reference to the full text of such exhibits.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ONSTREAM MEDIA CORPORATION
	By:  /s/ Robert E. Tomlinson
June 6, 2008	Robert E. Tomlinson, CFO

EX-4.1

Exhibit 4.1

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO COUNSEL TO THE ISSUER THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS IS AVAILABLE.

PROMISSORY NOTE

$_________ __________, 2008

1. Amount; Obligation to Pay; Interest Rate. FOR VALUE RECEIVED, as hereinafter set forth and at the times hereinafter stated, ONSTREAM MEDIA CORPORATION, a Florida corporation (the “Maker”), whose address is1291 SW 29 Avenue, Pompano Beach, Florida 33069, promises to pay to the order of __________ (the "Payee"), whose address is __________, an amount equal to __________ Dollars ($_____), subject to the provisions set forth below.

2. Interest Rate. Interest shall accrue on the outstanding principal balance under this Note from the date of issuance of this Note until this Note is paid in full at the rate of 12.0% per year.

3. Terms. Accrued interest only shall be paid in semi annual installments commencing on October 31^st, 2008, and continuing on each April 30^th, and October 31^st thereafter (each an "Interest Payment Date") until __________, 2011 (the "Maturity Date"), on which date all outstanding principal and accrued but unpaid interest shall be paid in full in one balloon payment. At the election of Maker any interest payments hereunder may be made in shares of Maker's common stock (the "Common Stock") at a price per share of Common Stock equal to 75% of the average closing price of a share of Common Stock on Maker's principal trading market over the 30 consecutive trading days ending on the trading day that is immediately prior to the Interest Payment Date in question. Interest shall be paid within ten (10) business days after the end of each payment date noted above.

4. Prepayment. After ten days prior written notice to Payee, Maker may prepay this Note by paying Payee an amount equal to the total amount Maker would pay Payee throughout the term of the Note including all interest payments, if the Note was paid in full at Maturity, less any amounts already paid as of the date of prepayment by Maker to Payee under this Note.

5. Security. This Note is one of a series of notes with identical terms issued in connection with a private placement of said securities by Maker (the "Private Placement"). The obligations of Maker under this Note shall be secured by the grant of a security interest in certain assets of Maker pursuant to the terms of a security agreement entered into concurrently herewith.

6. Conversion.

(a) Voluntary Conversion. At any time after six months from the date of issuance of this Note until this Note is no longer outstanding, all outstanding principal, accrued and unpaid interest, and interest to be accrued (i.e. all additional interest that has yet to accrue, but that would accrue on the full principal amount of this Note if this Note remained outstanding until the Maturity Date) under this Note (collectively, the "Conversion Amount") shall be convertible, in whole, but not in part, (unless the Company in its sole discretion allows a partial conversion) into shares of Common Stock at the option of the Payee, at any time (subject to the conversion limitations set forth in Section 6(c) of the Note). The Company will have the right in its sole discretion to allow Payee the ability to convert the Note prior to the six months for any reason. The Payee shall effect a conversion by delivering to the Company a written notice of conversion (a “Notice of Conversion”), specifying therein the date on which such conversion shall be effected (such date, the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered hereunder. Once the Company receives the Notice of Conversion, the Company will have 5 days to issue the underlying shares. Once the physical certificate is created, the Payee shall be required to physically surrender this Note to the Company. Upon the receipt of the Note by the Company, the Company shall deliver the Stock Certificate to the Payee within three days. In the event of any dispute or discrepancy, the records of the Company shall be controlling and determinative in the absence of manifest error.

(b) Conversion Price. The conversion price shall be equal to 75% of the average closing price of a share of Common Stock on Maker's principal trading market over the 30 consecutive trading days ending on the trading day that is immediately prior to the Conversion Date; subject, however, to a floor conversion price of $0.80 (subject to adjustment for forward and reverse stock splits, recapitalizations and the like) (the “Conversion Price”).

(c) Conversion Limitations.

(i) The Payee shall not be entitled to convert on a Conversion Date that amount of the Note in connection with that number of shares of Common Stock that would be in excess of the sum of (i) the number of shares of common stock owned by the Payee on a Conversion Date; and (ii) the number of shares of Common Stock issuable upon the conversion of the Note with respect to which the determination of this provision is being made on a Conversion Date, which would result in beneficial ownership by the Payee and its Affiliates of more than 4.99% of the outstanding shares of common stock of the Company on such Conversion Date.  For the purposes of the provision to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13d-3 thereunder.  Subject to the foregoing, the Payee shall not be limited to aggregate conversions of only 4.99% and aggregate conversions by the Payee may exceed 4.99%.  The Payee may waive the conversion limitation described in this paragraph 6(c), in whole or in part, upon and effective after 61 days prior written notice to the Company.  The Payee may decide whether to convert a Note to achieve an actual 4.99% ownership position.

(ii) Notwithstanding anything herein to the contrary, if the Company has not obtained shareholder approval, then the Company may not issue, upon conversion of the Note, a number of shares of Common Stock which, when combined with all shares of Common Stock issued in connection with the Private Placement (upon conversion of other Notes issued in the Private Placement, or otherwise), would exceed 19.99% of the number of shares of Common Stock outstanding on the Trading Day immediately preceding the date of the initial closing of the Private Placement under which the Notes are being issued (subject to adjustment for forward and reverse stock splits, recapitalizations and the like).

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(d) Mechanics of Conversion.

(i) Conversion Shares Issuable Upon Conversion of Principal Amount. The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by the quotient obtained by dividing (x) the Conversion Amount by (y) the Conversion Price.

(ii) Reservation of Shares Issuable Upon Conversion. The Maker covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of this Note and payment of interest on this Note, each as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Payee (and the other holders of the Notes), not less than such aggregate number of shares of the Common Stock as shall be issuable (taking into account the adjustments and restrictions of Section 6) upon the conversion of the outstanding principal amount of this Note and payment of interest hereunder. The Maker covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.

(iii) Fractional Shares. Upon a conversion hereunder the Maker shall not be required to issue stock certificates representing fractions of shares of Common Stock, but may if otherwise permitted, make a cash payment in respect of any final fraction of a share based on the Conversion Price at such time.

7. Place of Payment; Holidays. All payments on this Note shall be made to Payee at the address stated above, or at such other address as Payee shall designate in writing. If the prescribed date of payment of any of the principal or interest hereon is a Saturday, Sunday or legal holiday, such payment shall be due on the next succeeding business day.

8. Events of Default and Acceleration. The occurrence of any of the following events, followed by receipt by Maker of written notice of default from the holders of Notes constituting a majority of the then outstanding principal amount of the outstanding Notes ("Majority Holders"), shall constitute an “Event of Default” hereunder: (a) Maker's failure to pay any amount due under the Notes within 10 business days of the date it is due; (b) bankruptcy, reorganization, insolvency or liquidation proceedings or other proceedings for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against Maker and, if instituted against Maker, Maker shall by any action or answer approve of, consent to or acquiesce in any such proceedings or admit the material allegations of, or default in answering a petition filed in any such proceeding or such proceedings shall not be dismissed within thirty (30) calendar days thereafter; or (c) Maker shall materially breach any of the terms of the Notes. Upon the occurrence of an Event of Default the entire unpaid principal balance of this Note, with interest, fees and charges accrued hereon, shall become immediately due and payable. However, Maker shall have a grace period of five (5) business days after receipt of written notice describing the alleged breach in which to cure any such alleged breach and an Event of Default shall not be deemed to have occurred until and unless the item is uncured as of the expiration of the five (5) business day cure period.

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9. Waiver. Except as may be required by law, Maker, both before and after maturity, hereby expressly waives all protest, notice of protest, demand for payment, and presentment for payment.

10. Parties in Interest. This Note may not be assigned by Maker or Payee without the prior written consent of the other party. This Note will be binding in all respects upon Maker and inure to the benefit of Payee and its permitted successors and assigns.

11. Choice of Law; Venue. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of Florida, without regard to the principles of conflicts of law thereof. Each party agrees that all proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Note (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in Broward County, Florida. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in Broward County, Florida for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such proceeding is improper. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such 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 Note 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 parties hereto hereby irrevocably waive, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby.

12. Severability. If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law.

13. Notice. All notices and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given one (1) business day after receipt, or, if sent by facsimile, upon receipt of a confirmation of delivery.

THIS NOTE REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

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IN WITNESS WHEREOF, Maker has executed this Note effective as of the date first set forth above.

MAKER:
ONSTREAM MEDIA CORPORATION
By:	________________________________
Name:	Robert E. Tomlinson
Its:	CFO

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EX-10.1

EXHIBIT 10.1

SUBSCRIPTION AGREEMENT

Name of Subscriber ________________________

Onstream Media Corporation

1291 S.W. 29th Avenue

Pompano Beach, Florida 33069

Ladies and Gentlemen:

1.Subscription. I (sometimes referred to herein as the "Investor") hereby subscribe for and agree to purchase ___ Unit(s) (as defined below) of Onstream Media Corporation, a Florida corporation (the "Company”), on the terms and conditions described herein and in the Term Sheet of the Company and the Exhibits thereto (collectively, the “Offering Documents”), each dated April __, 2008, together with all supplements, if any, relating to this offering. Terms not defined herein are as defined in the Offering Documents. The purchase price per Unit is $100,000 although the Company reserves the right to sell fractional units. The Maximum Offering is $1,500,000. There is no minimum offering.

THE AGGREGATE AMOUNT SUBSCRIBED FOR HEREBY IS $___________.

2.Description of Units. Each Unit consists of (i) an interest bearing secured convertible note in principal amount of $100,000 (the “Notes”), and (ii) 10,000 shares of Company common stock, par value $.001 per share (“Shares”) (collectively, the Note and Shares are referred to as a “Unit”).

3.Purchase.

(a)I hereby tender to the Company cash or a certified check or wire transfer (information to be provided to me on my request) made payable to the order of Onstream Media Corporation in the amount indicated above, an executed copy of this Subscription Agreement and an executed copy of my Investor Questionnaire. The wire information is:

Onstream Media Corporation

ABA#: ________________

AC #: _________________

Ref: Subscription Agreement from (indicate name of subscriber)

(b)This offering will continue until the earlier of (a) the sale of 15 Units, or (b) May 15, 2008, unless extended without notice by the Company for up to two additional 30-day periods (the “Termination Date”). Prior to the Termination Date and as there is no minimum offering, payments delivered herewith will be immediately released to the Company upon acceptance of the subscription. Upon the earlier of a closing for my subscription or completion of the offering, I will be notified promptly by the Company as to whether my subscription has been accepted by the Company.

4.Acceptance or Rejection of Subscription.

(a)I understand and agree that the Company reserves the right to reject this subscription for the Units, in whole or in part, for any reason and at any time prior to the Closing, notwithstanding prior receipt by me of notice of acceptance of my subscription.

(b)In the event of the rejection of this subscription, my subscription payment will be promptly returned to me without interest or deduction and this Subscription Agreement shall have no force or effect. In the event my subscription is accepted and the offering is completed, the funds specified above shall be released to the Company.

5.Closing. The closing ("Closing") of this offering may occur any time and from time to time after the Company has received and accepted subscriptions before the Termination Date. The Units subscribed for herein shall not be deemed issued to or owned by me until one copy of this Subscription Agreement has been executed by me and countersigned by the Company and the Closing with respect to such Units has occurred.

6.Disclosure. Because this offering is limited to accredited investors as defined in Section 2(15)of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 501promulgated thereunder, in reliance upon the exemption contained in Section 4(2) of the Securities Act and applicable state securities laws, the Units are being sold without registration under the Securities Act. I acknowledge receipt of the Offering Documents, including the Company's Annual Report on Form 10-KSB for the year ended September 30, 2007 and its Quarterly Report on Form 10-QSB for the period ending December 31, 2007 and all related documents and represent that I have carefully reviewed and understand the Offering Documents and its exhibits. I have received all information and materials regarding the Company that I have requested.

I fully understand that the investment or Units involve a high degree of risk. I fully understand the nature of the risks involved in purchasing the Units and I am qualified by my knowledge and experience to evaluate investments of this type. I have carefully considered the potential risks relating to the Company and purchase of its Units and have, in particular, reviewed each of the risks set forth in the Offering Documents. Both my advisors and I have had the opportunity to ask questions of and receive answers from representatives of the Company or persons acting on its behalf concerning the Company and the terms and conditions of a proposed investment in the Company and my advisors and I have also had the opportunity to obtain additional information necessary to verify the accuracy of information furnished about the Company. Accordingly, I have independently evaluated the risks of purchasing the Units.

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7.Investor Representations and Warranties. I acknowledge, represent and warrant to, and agree with, the Company as follows:

(a)I am aware that my investment involves a high degree of risk as disclosed in the Offering Documents and have read carefully the Offering Documents.

(b)I acknowledge and am aware that there is no assurance as to the future performance of the Company.

(c)I acknowledge that there may be certain adverse tax consequences to me in connection with my purchase of Units, and the Company has advised me to seek the advice of experts in such areas prior to making this investment.

(d)I am purchasing the Units for my own account for investment purposes and not with a view to or for sale in connection with the distribution of the Units, the Notes, the Shares, or the shares of Common Stock issuable upon conversion of the Notes and in payment of interest, nor with any present intention of selling or otherwise disposing of all or any part of the foregoing securities. I agree that I must bear the entire economic risk of my investment for an indefinite period of time because, among other reasons, the Units have not been registered under the Securities Act or under the securities laws of any state and, therefore, cannot be resold, pledged, assigned or otherwise disposed of unless they are subsequently registered under the Securities Act and under applicable securities laws of certain states or an exemption from such registration is available. Furthermore, I hereby acknowledge and agree that I will not, except in compliance with law, sell, transfer, pledge, encumber, give or otherwise dispose of, either publicly or privately, the Units, the Notes, the Shares, or the shares of Common Stock issuable upon conversion of the Notes and in payment of interest. I hereby authorize the Company to place a legend denoting the restrictions on the Units that may be issued to me, as well as the Notes, Shares, and shares of Common Stock issuable upon conversion of the Notes and in payment of interest.

(e)I recognize that the Units, as an investment, involve a high degree of risk including, but not limited to, the risk of economic losses from operations of the Company and the total loss of my investment. I believe that the investment in the Units is suitable for me based upon my investment objectives and financial needs, and I have adequate means for providing for my current financial needs and contingencies and have no need for liquidity with respect to my investment in the Company.

(f)I have been given access to full and complete information regarding the Company and have utilized such access to my satisfaction for the purpose of obtaining information in addition to, or verifying information included in, the Offering Documents and related documents, and I have either met with or been given reasonable opportunity to meet with officers of the Company for the purpose of asking questions of, and receiving answers from, such officers concerning the terms and conditions of the offering of the Units and the business and operations of the Company and to obtain any additional information, to the extent reasonably available.

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(g)I have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Units and have obtained, in my judgment, sufficient information from the Company to evaluate the merits and risks of an investment in the Company. I have not utilized any person as my purchaser representative as defined in Regulation D under the Securities Act in connection with evaluating such merits and risks.

(h)I have relied solely upon my own investigation in making a decision to invest in the Company.

(i)I have received no representation or warranty from the Company or any of its officers, directors, employees or agents in respect of my investment in the Company and I have received no information (written or otherwise) from them relating to the Company or its business other than as set forth in the Offering Documents. I am not participating in the offer as a result of or subsequent to: (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio or (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.

(j)I have had full opportunity to ask questions and to receive satisfactory answers concerning the offering and other matters pertaining to my investment and all such questions have been answered to my full satisfaction.

(k)I have been provided an opportunity to obtain any additional information concerning the offering and the Company and all other information to the extent the Company possesses such information or can acquire it without unreasonable effort or expense.

(l)I am an "accredited investor" as defined in Section 2(15) of the Securities Act and in Rule 501 promulgated thereunder. I can bear the entire economic risk of the investment in the Units for an indefinite period of time and I am knowledgeable about and experienced in investments in the equity securities of non-publicly traded companies, including early stage companies. I am acquiring the Units for my own account for investment purposes only and not with a view to the resale or distribution of such securities within the meaning of the Securities Act of 1933, as amended. I am not acting as an underwriter or a conduit for sale to the public or to others of unregistered securities, directly or indirectly, on behalf of the Company or any person with respect to such securities.

(m)I understand that (i) the Units and the underlying securities have not been registered under the Securities Act, or the securities laws of certain states in reliance on specific exemptions from registration, (ii) no securities administrator of any state or the federal government has recommended or endorsed this offering or made any finding or determination relating to the fairness of an investment in the Company and (iii) the Company is relying on my representations and agreements for the purpose of determining whether this transaction meets the requirements of the exemptions afforded by the Securities Act and certain state securities laws.

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(n)I understand that (i) since neither the offer nor sale of the Units has been registered under the Securities Act or the securities laws of any state, the Units may not be sold, assigned, pledged or otherwise disposed of unless they are so registered or an exemption from such registration is available, and (ii) it is not anticipated that there will be any market for the resale of the Units.

(o)I have been urged to seek independent advice from my professional advisors relating to the suitability of an investment in the Company in view of my overall financial needs and with respect to the legal and tax implications of such investment.

(p)If the Investor is a corporation, company, trust, employee benefit plan, individual retirement account, Keogh Plan, or other tax-exempt entity, it is authorized and qualified to become an Investor in the Company and the person signing this Subscription Agreement on behalf of such entity has been duly authorized by such entity to do so.

(q)The information contained in my Investor Questionnaire, as well as any information which I have furnished to the Company with respect to my financial position and business experience, is correct and complete as of the date of this Subscription Agreement and, if there should be any material change in such information prior to the Closing of the offering, I will furnish such revised or corrected information to the Company.

(r)Neither the Investor or any person acting on its behalf or at its direction will engage in any short sale hypothecation or other similar transaction with the Company's Common Stock.

I hereby acknowledge and am aware that except for any rescission rights that may be provided under applicable laws, I am not entitled to cancel, terminate or revoke this subscription, and any agreements made in connection herewith shall survive my death or disability.

8.Indemnification. I hereby agree to indemnify and hold harmless the Company and its officers, directors, stockholders, employees, agents, and counsel against any and all losses, claims, demands, liabilities, and expenses (including reasonable legal or other expenses, including reasonable attorneys' fees) incurred by each such person in connection with defending or investigating any such claims or liabilities, whether or not resulting in any liability to such person, to which any such indemnified party may become subject under the Securities Act, under any other statute, at common law or otherwise, insofar as such losses, claims, demands, liabilities and expenses (a) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact made by me and contained in this Subscription Agreement or my Investor Questionnaire, or (b) arise out of or are based upon any breach by me of any representation, warranty, or agreement made by me contained herein or therein.

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9.Severability. In the event any parts of this Subscription Agreement are found to be void, the remaining provisions of this Subscription Agreement shall nevertheless be binding with the same effect as though the void parts were deleted.

10.Choice of Law and Jurisdiction. This Subscription Agreement shall be governed by the laws of the State of Florida as applied to contracts entered into and to be performed entirely within the State of Florida. Any action arising out of this Subscription Agreement shall be brought exclusively in a court of competent jurisdiction in Broward County, Florida, and the parties hereby irrevocably waive any objections they may have to venue in Broward County, Florida.

11.Counterparts. This Subscription Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. The execution of this Subscription Agreement may be by actual or facsimile signature.

12.Benefit. This Subscription Agreement shall be binding upon and inure to the benefit of the parties hereto.

13.Notices and Addresses. All notices, offers, acceptance and any other acts under this Subscription Agreement (except payment) shall be in writing, and shall be sufficiently given if delivered to the addresses by registered mail or by Federal Express or similar courier delivery or by facsimile delivery confirmed by either of the two preceding methods, as follows:

Investor:	At the address designated on the signature page of this Subscription Agreement.
The Company:	Onstream Media Corporation
	1291 S.W. 29th Avenue
	Pompano Beach, Florida 33069
	Fax No. (954) 917-6660
With a copy to:	Arnstein & Lehr LLP
	200 East Las Olas Boulevard, Suite 1700
	Fort Lauderdale, Florida 33301
	Attention: Joel D. Mayersohn, Esq.
	Tel. No. (954) 713-7614
	Fax No. (953) 713-7700

or to such other address as any of them, by notice to the others may designate from time to time. The transmission confirmation receipt from the sender's facsimile machine shall be conclusive evidence of successful facsimile delivery. Time shall be counted to, or from, as the case may be, the delivery in person or by mailing.

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14.Entire Agreement. This Subscription Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior oral and written agreements between the parties hereto with respect to the subject matter hereof. This Subscription Agreement may not be changed, waived, discharged, or terminated orally but, rather, only by a statement in writing signed by the party or parties against which enforcement or the change, waiver, discharge or termination is sought.

15.Section Headings. Section headings herein have been inserted for reference only and shall not be deemed to limit or otherwise affect, in any matter, or be deemed to interpret in whole or in part, any of the terms or provisions of this Subscription Agreement.

16.Survival of Representations, Warranties and Agreements. The representations, warranties and agreements contained herein shall survive the delivery of, and the payment for, the Units.

17.Acceptance of Subscription. The Company may accept this Subscription Agreement at any time for all or any portion of the Units subscribed for by executing a copy hereof as provided and notifying me within a reasonable time thereafter.

RESIDENTSOFALLSTATES: THE UNITS OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE UNITS ARE SUBJECT TO REGISTRATIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE UNITS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE OFFERING DOCUMENTS. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

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THE AGGREGATE AMOUNT SUBSCRIBED FOR HEREBY IS $___________.

Manner in Which Title is to be Held. (check one)

___ Individual Ownership

___ Community Property

___ Joint Tenant with Right of Survivorship (both parties must sign)

___ Partnership

___ Tenants in common

___ Corporation

___ Trust

___ IRA or Keough

___ Other (please indicate)

	Dated: ____________________________
INDIVIDUAL INVESTORS	ENTITY INVESTORS
______________________________
______________________	Name of entity, if any
Signature (Individual)
	By:  ______________________________
	*Signature
______________________	Its   ______________________________
Signature (Joint)	Title
(all record holders must sign)
______________________
Name(s) Typed or Printed	Name Typed or Printed
Address to Which Correspondence	Address to Which Correspondence
Should be Directed	Should be Directed
______________________	______________________
______________________	______________________
City, State and Zip Code	City, State and Zip Code
______________________	______________________
Tax Identification or	Tax Identification or
Social Security Number	Social Security Number

* If Units are being subscribed for by any entity, the Certificate of Signatory on the next page must also be completed

The foregoing subscription is accepted and the Company hereby agrees to be bound by its terms.

	ONSTREAM MEDIA CORPORATION
Dated: ________________	By: ______________________________
	Randy Selman, President

CERTIFICATE OF SIGNATORY

(To be completed if Units are being subscribed for by an entity)

I, _______________________________, the ____________________________

(name of signatory)(title)

of______________________________ "Entity"), a __________________________

(name of entity)

_________________________________________

(type of entity)

hereby certify that I am empowered and duly authorized by the Entity to execute the Subscription Agreement and to purchase the Units, and certify further that the Subscription Agreement has been duly and validly executed on behalf of the Entity and constitutes a legal and binding obligation of the Entity.

IN WITNESS WHEREOF, I have set my hand this ___ day of _________, 2008.

 ______________________________

(Signature)

EX-10.2

Exhibit 10.2

SECURITY AGREEMENT

This SECURITY AGREEMENT (this “Agreement”) is made and entered into this April ___, 2008, between the investors set forth on Schedule A attached hereto (the "Secured Parties"), and Onstream Media Corporation, a Florida corporation (the "Debtor").

WITNESSETH

Pursuant to the terms of that certain Term Sheet ("Term Sheet") the Debtor has issued to the Secured Parties promissory notes in the total principal amount of up to ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000) (the "Notes"). In order to secure the obligations of the Debtor under the Notes the Debtor has agreed to grant the Secured Parties an undivided security interest in certain assets of Debtor.

In consideration of the mutual covenants contained herein and other good and valuable consideration, the parties hereto agree as follows:

1.Grant of Security Interest. In consideration of and as an inducement to the Secured Parties to invest in the Notes, Debtor hereby grants the Secured Parties an undivided security interest (the “Security Interest”) in (i) the equipment and software described on the attached Schedule B, and any proceeds and products therefrom, and (ii) in the event the foregoing is insufficient to satisfy the payment of the Obligations, then the Secured Parties shall have a further undivided security interest in all other assets of the Debtor and any proceeds and products therefrom, excluding those assets related to the Debtor's accounts receivable, customer contracts, insurance policies on such accounts (the "Collateral").

2.The Obligations. The Security Interest herein granted shall secure full payment and performance of Debtor’s obligations under the Notes (collectively, the “Obligations”).

3.Covenants of Debtor. So long as the Obligations remain unpaid, Debtor will perform and observe each of their covenants to the Secured Parties as set forth herein, and (a) will defend the Collateral against the claims and demands of all other parties; (b) will notify the Secured Parties promptly in writing of any change in its address; (b) without the written consent of Secured Parties holding a majority of the then outstanding principal amount of the Notes ("Majority of SP's") will not permit anything to be done that may impair the value of such Collateral or the security intended to be afforded by this Agreement outside normal wear and tear; (c) will keep and maintain the Collateral in good order and repair at all times, normal wear and tear excepted; and (d) in connection herewith will do such other things as the Majority of SP's may reasonably request to protect the Collateral and the Secured Parties' security interest.

4.Events of Default. Debtor shall be in default (each, an “Event of Default”) under this Agreement upon the happening of any one or more of the following events, circumstances or conditions, and the subsequent receipt by Debtor of written notice of default from the Majority of SP's: (a) an Event of Default shall occur as specified in the Note; or (b) failure by Debtor to materially comply with or perform any provision of this Agreement. However, Debtor shall have a grace period of five (5) business days after receipt of written notice describing the alleged breach in which to cure any such alleged breach and an Event of Default shall not be deemed to have occurred until and unless the item is uncured as of the expiration of the five (5) business day cure period.

5.Remedies. Upon the happening of any Event of Default, the Secured Parties’ rights with respect to the Collateral shall be those of a secured party under the Uniform Commercial Code of the State of Florida, as now in effect or hereinafter amended (the “Florida Uniform Commercial Code”). The Secured Parties shall also have any additional rights granted herein. All Secured Parties shall be treated the same by the Debtor in the event of an Event of Default, and all such rights of Secured Parties set forth in this Section 5 shall be administered by the Majority of SP's. Notwithstanding the foregoing, in the event the Secured Parties take action hereunder against the Collateral in satisfaction of the Obligations, the Secured Parties shall first proceed against only the Collateral described in Section 1(i) hereof, and if, and only if, the proceeds therefrom are insufficient to satisfy the Obligations, the Secured Parties may take action against the Collateral described in Section 1(ii) hereof.

6.Miscellaneous.

(a)The terms “Secured Parties," and “Debtor” as used in this Agreement include the heirs, personal representatives, and successors or assigns of those parties, as applicable.

(b)This Agreement is a continuing agreement which shall remain in force and effect until all of the Obligations and any extensions or renewals together with all interest thereon shall be paid in full.

(c)This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which taken together shall constitute one agreement.

(d)Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provisions shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

(e)Notices required under this Agreement shall be deemed to have been adequately given if delivered by registered mail or sent by electronic transmission with evidence of sending and receipt at the addresses set forth below or such other address as such party may from time to time designate in writing.

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The Debtor:	Onstream Media Corp.
	1291 SW 29 Avenue,
	Pompano Beach, Florida 33069
	Attn: Robert E. Tomlinson, CFO
The Secured Parties:	As set forth on Schedule A

(f)No failure to exercise and no delay in exercising any right, power or privilege granted under this Agreement shall operate as a waiver of such right, power or privilege. No single or partial exercise of any right, power or privilege granted under this Agreement shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies provided in this Agreement are cumulative and are not exclusive of any rights or remedies provided by law.

(g)This Agreement shall be governed by and construed in accordance with the procedural and substantive laws of Florida without regard for its conflicts-of-laws rules. Any action to enforce or interpret this agreement shall be brought in the appropriate court in Broward County, Florida.

(h)This Agreement and the Notes express the entire understanding of the parties and supersede all prior and contemporaneous agreements and undertakings of the parties with respect to the subject matter of this Agreement.

(i)This Agreement and the rights hereunder shall not be assignable without the prior written consent of the parties hereto. Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties hereto and their respective successors and assigns.

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

Onstream Media Corporation
By:	__________________________
Name:	Robert E. Tomlinson
Title:	CFO

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