AMENDMENT NO. 2
                                       TO
                               TERM LOAN AGREEMENT


      This AMENDMENT NO. 2 TO TERM LOAN AGREEMENT (this "Amendment") is dated to
be effective as of July 29, 2005, and is entered into between NUWAY MEDICAL,
INC., a corporation organized under the laws of the state of Delaware (the
"Borrower"), and AUGUSTINE II, LLC, a limited liability company formed under the
laws of the State of Delaware (the "Lender").
                                   BACKGROUND:

      Borrower and Lender are parties to that certain Term Loan Agreement dated
as of June 10, 2003, as amended by that certain Amendment No. 1 to Term Loan
Agreement dated effective March 30, 2004 (the Term Loan Agreement, as so
amended, the "Agreement"). Pursuant to the Agreement, Borrower and Lender have
also entered into that certain Pledge Agreement dated as of June 10, 2003 (the
"Pledge Agreement"), and Borrower previously has delivered to Lender an Amended
and Restated Convertible Term Note (the "Existing Note") and Amended and
Restated Warrant to Purchase Common Stock No. AG-1 (the "Existing Warrant"),
each dated as of March 30, 2004 (the Pledge Agreement, Existing Note and
Existing Warrant, together with the Agreement, the "Loan Documents"). Borrower
has requested that Lender extend the maturity date of the term loan evidenced by
the Loan Documents, and in consideration of Lender's willingness to do so has
agreed to issue an additional Warrant.

      Capitalized terms used herein shall have the meanings ascribed to such
terms in the Agreement.

      NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged:

      1. Extension of Maturity Date. The Term Loan Maturity Date is hereby
extended to May 1, 2006, and the last sentence of Section 1.2 of the Agreement
is amended accordingly.

      2. Amended Note. The Existing Note shall be replaced by the Second Amended
and Restated Term Note in the form attached hereto as Exhibit A (the "Second
Amended Note"), and upon delivery of the executed Amended Note to Lender, Lender
shall deliver the Existing Note to Borrower. Thereafter, all references in the
Agreement to "Term Note" shall be deemed to be references to the Amended Note.

      3. Additional Warrant. The Borrower shall issue to the Lender an
additional warrant number AG-II that allows the Lender to purchase up to
8,000,000 shares of the Borrower's common stock for $0.005 per share. (the
"Second Warrant") The value of this warrant is $40,000. Thereafter, all
references in the Agreement to "Warrant" shall be deemed to be references
collectively to the Existing Warrant, and the Second Warrant.

<PAGE>

      3. Representations, Warranties and Covenants.

            The representations of Borrower in the Agreement and the other Loan
Documents, as amended hereby, are true and correct as of the date hereof as
though each of said representations and warranties was made on the date hereof
except for those representations and warranties which are made as of a specified
date in the applicable Loan Document.


      4. Amendment Supplementary. This Amendment, the Second Amended Note and
the Second Warrant are supplementary to the Loan Documents. All of the
provisions of the Loan Documents, including without limitation the right to
declare principal and accrued interest due for any cause specified in the Loan
Documents, shall remain in full force and effect except as expressly modified.
The Agreement and the other Loan Documents and all rights and powers created
thereby and thereunder or under such other documents are in all respects
ratified and confirmed. From and after the date hereof, the Agreement and the
other Loan Documents shall be deemed to be amended and modified as herein
provided, but, except as so amended and modified, the Agreement and the other
Loan Documents shall continue in full force and effect and the Agreement, the
other Loan Documents, this Amendment, the Second Amended Note and the Second
Warrant shall be read, taken and construed as one and the same instrument. On
and after the date hereof, any references in the Loan Documents to the Agreement
shall mean the Agreement as amended hereby, any references to the Note shall
mean the Second Amended Note and any references to the Warrant shall mean the
Existing Warrant and the Second Warrant.

      6. Waiver of Claims. Borrower hereby acknowledges, agrees and affirms that
it possesses no claims, defenses, offsets, recoupment or counterclaims of any
kind or nature against or with respect to the enforcement of the Agreement, or
any other Loan Document or any amendments thereto (collectively, the "Claims"),
nor does Borrower now have knowledge of any facts that would or might give rise
to any Claims. If facts exist as of the date of this Amendment which would or
could give rise to any Claim against or with respect to the enforcement of the
Agreement, or any other Loan Document, as amended by the amendments and/or
restatements thereto, Borrower hereby unconditionally, irrevocably and
unequivocally waives and fully releases any and all such Claims as if such
Claims were the subject of a lawsuit, adjudicated to final judgment from which
no appeal could be taken and therein dismissed with prejudice. In furtherance of
the intention of the parties, Borrower hereby expressly waives any and all
rights conferred upon it by the provisions of any applicable law which would
provide that "A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of executing the
release which, if known by him, must have materially affected his settlement
with the debtor." Borrower hereby understands and acknowledges the significance
and consequences of the foregoing release and waiver.

      7. Representation by Counsel. Borrower hereby represents that it has been
represented by competent counsel of its choice in the negotiation and execution
of this Amendment; that it has read and fully understands the terms hereof, that


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<PAGE>

Borrower and its counsel have been afforded an opportunity to review, negotiate
and modify the terms of this Amendment, and that it intends to be bound hereby.

      8. Counterparts. This Amendment may be executed in one or more
counterparts, which counterparts, when taken together and collated shall
constitute one agreement.


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

                                          NUWAY MEDICAL, INC.

                                                /s/Dennis Calvert
                                          By:
                                               ------------------------------
                                                Dennis Calvert, President


                                          AUGUSTINE II, LLC

                                          By:   AUGUSTINE CAPITAL MANAGEMENT,
                                                L.L.C., its manager

                                          By:
                                               ------------------------------
                                                Thomas F. Duszynski
                                                Member and Authorized Officer