Document:

TERM LOAN AGREEMENT

                            Dated as of June 10, 2003

     This TERM LOAN AGREEMENT  (this  "Agreement") is entered into between NUWAY
MEDICAL,  INC., a corporation  organized under the laws of the state of Delaware
(the  "Borrower"),  and AUGUSTINE II, LLC, a limited  liability  company  formed
under the laws of the State of Delaware (the "Lender").  Capitalized  terms used
herein  shall  have the  meanings  ascribed  to such  terms in Section 8 of this
Agreement.

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

                                SECTION 1. LOAN

SECTION 1.1. TERM LOAN.  Subject to the terms and conditions of this  Agreement,
the Lender  agrees to make loans to the  Borrower,  and the  Borrower  agrees to
borrow from the Lender, in the aggregate principal amount of four hundred thirty
thousand dollars ($420,000) (collectively, the "Term Loan"). The principal shall
be loaned as follows:  $250,000 on the date  hereof,  or as soon  thereafter  as
reasonably  practicable,  $100,000  on July 1, 2003 and the balance on August 1,
2003.  The Lender  hereby agrees to make such loans to the Borrower on the dates
so indicated,  with such payments to be made in immediately  available funds via
wire transfer or cashiers checks.

SECTION 1.2.  TERM NOTE.  The Term Loan shall be evidenced by a promissory  note
(the "Term  Note"),  substantially  in the form of  Exhibit A, with  appropriate
insertions, dated the date hereof, payable to the order of the Lender and in the
initial principal amount of $250,000.  The Term Note shall be revised to reflect
the additional loan installments  required to be made hereunder as and when such
loans are made.  The Term Loan shall be due and payable on FEBRUARY  29, 2004 or
at an earlier  date as provided  in Section 3.2 hereof (the "Term Loan  Maturity
Date").

                          SECTION 2. INTEREST AND FEES

SECTION  2.1.  INTEREST.  The  Borrower  agrees to pay  interest  on the  unpaid
principal amount of the Term Loan from time to time outstanding hereunder at the
following rates per year,  compounded monthly (with the result that the interest
accrued during each month is added to the principal  amount of the Term Loan and
subsequent  interest  shall be  calculated  in the same manner on the  increased
principal amount of the Term Loan):

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

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

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

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

                      SECTION 3. PAYMENTS AND PREPAYMENTS

     SECTION 3.1. PAYMENTS.

          (a) Place of Payment.  All payments of principal,  interest,  fees and
     other amounts payable hereunder,  shall be made to the Lender at its office
     at 141 West Jackson Boulevard, Suite 2182, Chicago, Illinois 60604.

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

     SECTION 3.2. PREPAYMENT.

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

          (b) Mandatory Prepayment.

               (i)  Within  thirty  (30)  days  following  the  last day of each
               calendar quarter during the term of this Agreement,  the Borrower
               shall make a prepayment of the Term Loan equal to the  Borrower's
               net income before  depreciation for such calendar  quarter,  less
               the ordinary  operating  expenses paid by the Borrower as well as
               its taxes  payable  during  that  period,  all as  determined  in
               accordance  with GAAP,  up to the total amount then due under the
               Term Loan.

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

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

                    (B) any insurance payouts or condemnation  awards payable by
                    reason of theft, loss,  destruction,  damage,  taking or any

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

                   SECTION 4. REPRESENTATIONS AND WARRANTIES

     To induce the Lender to make the Term Loan,  the  Borrower  represents  and
warrants to the Lender that (except in each case as  otherwise  disclosed in the
Borrower's  filings  with the SEC and except with  respect to any  matters  with
respect to the delisting of the Borrower's shares from the Nasdaq):

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

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

     SECTION 4.3. FINANCIAL STATEMENTS. The Borrower's audited consolidating and
consolidated  financial statements as at December 31, 2002, copies of which have
been furnished to the Lender, have been prepared in conformity with GAAP applied
on a basis  consistent  with that of the preceding  fiscal year,  and accurately
present the financial  condition of the Borrower and its subsidiaries as at such
dates and the results of their operations for the respective periods then ended.
Since the date of those financial statements, no material, adverse change in the
business,  properties,  assets,  operations,  conditions  or  prospects  of  the
Borrower or any subsidiary has occurred.  There is no known contingent liability
of the  Borrower or any  subsidiary  which is not  reflected  in such  financial
statements.

     SECTION 4.4. TAXES. The Borrower and its subsidiaries  have filed or caused
to be filed all  federal,  state and local tax returns  which are required to be
filed,  and  have  paid or have  caused  to be paid  all  taxes as shown on such

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returns or on any  assessment  received  by them,  to the extent that such taxes
have become due,  except as follows:  Borrower  has not filed its annual  report
with  the  Delaware  Secretary  of  State,  and owes to the  State  of  Delaware
approximately $6,400 in taxes for fiscal year 2002.

     SECTION 4.5.  LIENS.  None of the assets of the Borrower or any  subsidiary
thereof are subject to any  mortgage,  pledge,  title  retention  lien, or other
lien, encumbrance or security interest.

     SECTION  4.6.  ADVERSE  CONTRACTS.  Neither  the  Borrower  nor  any of its
subsidiaries is a party to any agreement or instrument or subject to any charter
or other  corporate  restriction,  nor is it subject to any judgment,  decree or
order of any court or governmental  body,  which may have a material and adverse
effect on the business, property, assets, operations, conditions or prospects of
the  Borrower  and its  subsidiaries  taken as a whole or on the  ability of the
Borrower to perform its obligations  under this Agreement,  the Term Note or the
Warrant.  Neither  the  Borrower  nor  any of its  subsidiaries  has,  nor  with
reasonable  diligence  should  have had,  knowledge  of or notice  that it is in
default in the performance, observance or fulfillment of any of the obligations,
covenants  or   conditions   contained  in  any  such   agreement,   instrument,
restriction, judgment, decree or order.

     SECTION 4.7.  REGULATION U. The Borrower is not engaged principally in, nor
is one of the Borrower's important activities,  the business of extending credit
for the purpose of purchasing or carrying  "margin  stock" within the meaning of
Regulation U of the Board of Governors of the Federal  Reserve System as now and
from time to time hereinafter in effect.

     SECTION  4.8.   LITIGATION  AND  CONTINGENT   LIABILITIES.   No  litigation
(including   derivative  actions),   arbitration   proceedings  or  governmental
proceedings  are  pending  or  threatened  against  the  Borrower  or any of its
subsidiaries which would (singly or in the aggregate),  if adversely determined,
have a  material  and  adverse  effect  on  the  business,  properties,  assets,
operations, conditions or prospects of the Borrower or any subsidiary.

                              SECTION 5. COVENANTS

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

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

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

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

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

     SECTION 5.3. USE OF PROCEEDS.

          (a) Use of Proceeds. The Borrower shall use the proceeds from the Term
     Loan solely for operating  costs,  including  but not limited to,  employee
     salaries and costs  associated with filing and obtaining SEC  effectiveness
     of the registration statement relating to the Lender's resale of the Common
     Stock  underlying  the  warrants  issued  by the  Borrower  on this date to
     Lender.

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

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

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

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

                        SECTION 6. CONDITIONS OF LENDING

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

     SECTION 6.1.  DOCUMENTATION.  In addition to the  conditions  precedent set
forth in Section 6.2 and Section 6.3, the  obligation  of the Lender to make the
Term Loan is  subject to the  conditions  precedent  that the Lender  shall have

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received all of the following, each duly executed and dated a date acceptable to
the Lender, in form and substance satisfactory to the Lender and its counsel, at
the expense of the Borrower,  and in such number of signed  counterparts  as the
Lender may request  (except for the Term Note, of which only the original  shall
be signed):

          (a) Agreement. This Agreement;

          (b) Note. The Term Note;

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

          (d) Pledge  Agreements.  Duly executed  pledge  agreements in form and
     substance  satisfactory  to the  Lender (a "Pledge  Agreement")  by (i) New
     Millennium  Capital  Partners,  LLC (a  "Pledgor")  in favor of the Lender,
     together with stock powers executed in blank, pledging all of its ownership
     interest in the pledged capital stock of the Borrower, and (ii) by Borrower
     (a  "Pledgor")  in  favor  of the  Lender,  pledging  all of its  ownership
     interest in NuWay Sports, LLC, a California limited liability company;

          (e) UCC Financing Statements.  Such duly executed financing statements
     and other documents  together with such other acts and things as the Lender
     may have  required  to  establish  and  maintain a valid lien and  security
     interest in the collateral described in the Pledge Agreement;

          (f)  Warrant.   A  duly   executed   warrant  in  form  and  substance
     satisfactory  to the Lender by the  Borrower  in favor of the  Lender  (the
     "Warrant"); and

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

     SECTION 6.2. REPRESENTATIONS AND WARRANTIES; NO DEFAULT.

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

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

     SECTION 6.3. NO MATERIAL ADVERSE CHANGE.  No material adverse change in, or
effect  on, (a) the  business,  assets,  properties,  operations,  condition  or

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prospects of the Borrower or any of its  subsidiaries  or (b) the ability of the
Borrower to perform its obligations  under this Agreement,  the Term Note or the
Warrant,  in all  cases  whether  due to a  single  circumstance  or event or an
aggregation of circumstances or events, shall have occurred.

                               SECTION 7. DEFAULT

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

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

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

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

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

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

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

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     subsidiary  and any  ERISA  Affiliate  have  incurred  on the  date of such
     withdrawal)  exceeds $100,000;  or (iv) any "reportable"  event shall occur
     under  ERISA  in  respect  of any  employee  benefit  plan  maintained  for
     employees of the Borrower or any subsidiary; or

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

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

          (i) Pledge  Agreement.  The Pledge  Agreement  shall be  repudiated or
     become unenforceable or incapable of performance; any Person other than the
     Lender shall obtain a security  interest or lien in the collateral  pledged
     pursuant to the Pledge Agreement; any court shall determine that the Lender
     does  not  have  a  first  priority  perfected  security  interest  in  the
     collateral pledge pursuant to the Pledge Agreement; or

          (j)  Warrant.   A  default  by  the  Borrower  in  the  observance  or
     performance of any of the covenants or conditions  contained in the Warrant
     or the Warrant  shall cease to be in full force and effect or the  Borrower
     shall so state in writing; or

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

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

     SECTION  7.2.  REMEDIES.  Upon the  occurrence  of any Event of Default set
forth in subsections (a)-(k) of Section 7.1 and during the continuance  thereof,
the Lender or any other  holder of the Term Note may  declare  the Term Note and
any  other  amounts  owed to the  Lender  to be  immediately  due  and  payable,
whereupon the Term Note and any other amounts owed to the Lender shall forthwith
become due and payable. Upon the occurrence of any Event of Default set forth in

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

                             SECTION 8. DEFINITIONS

     SECTION 8.1. GENERAL. As used herein:

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

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

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

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

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

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

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

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

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

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

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

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

          (m)  "Pledge  Agreement"  shall have the  meaning set forth in Section
     6.1(d).

          (n) "Pledgor" shall have the meaning set forth in Section 6.1(d).

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

          (p) "Term Loan" shall have the meaning set forth in Section 1.1.

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

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

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

          (t) "Warrant" shall have the meaning set forth in Section 6.1(f).

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

                                       10
<PAGE>

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

                            SECTION 9. MISCELLANEOUS

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

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

          (a) if to the  Lender  to 141  West  Jackson  Boulevard,  Suite  2182,
     Chicago,  Illinois  60604,  Attention:  John T. Porter,  telecopy No. (312)
     427-5396,

          (b) if to the Borrower to 23461 South Pointe, Suite 200, Laguna Hills,
     California 92653, Attention:  Dennis Calvert,  telecopy No. (949) 454-9066,
     copy to John R. Browning, Esq, telecopy No. (949) 770-8666.

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

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

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

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

     SECTION 9.6.  CAPTIONS.  Captions in this Agreement are for  convenience of
reference  only and  shall not  define  or limit any of the terms or  provisions

                                       11
<PAGE>

hereof.  References  herein to Sections or provisions  without  reference to the
document in which they are contained are references to this Agreement.

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

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

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

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

     SECTION 9.11.  SUBMISSION TO  JURISDICTION;  VENUE. To induce the Lender to
make the Term  Loan,  as  evidenced  by the Term  Note and this  Agreement,  the
Borrower  irrevocably  agrees that,  subject to the  Lender's  sole and absolute
election, all suits, actions or other proceedings in any way, manner or respect,
arising out of or from or related to this  Agreement,  the Term Note, the Pledge
Agreement, the Warrant or any document executed in connection herewith, shall be
subject to  litigation  in courts  having  sites within  Illinois.  The Borrower
hereby consents and submits to the  jurisdiction of any local,  state or federal
court located within said city and state.  The Borrower  hereby waives any right
it may have to trial by jury,  to  transfer  or  change  the  venue of any suit,
action  or other  proceeding  brought  against  the  Borrower  by the  Lender in
accordance with this Section 9.11, or to claim that any such proceeding has been
brought in an inconvenient forum.

                            [SIGNATURE PAGE FOLLOWS]

                                       12
<PAGE>

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

                            NUWAY MEDICAL, INC.

                            By:
                                 ---------------------------------------------

                            Its:
                                  --------------------------------------------

                            AUGUSTINE II, LLC

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

                            By:
                                 ---------------------------------------------

                            Its:
                                  --------------------------------------------Exhibit 10.2

         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.

                        WARRANT TO PURCHASE COMMON STOCK

                                  June 10, 2003

WARRANT NO. AG-1

         THIS CERTIFIES THAT, for value  received,  AUGUSTINE II, LLC, a limited
liability company formed under the laws of the State of Delaware (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"),
commencing  at the time  periods  prescribed  herein  and  ending  at 5:00  p.m.
Chicago,  Illinois  time on the fifth  (5th)  calendar  anniversary  of the date
hereof, 6,158,381 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 $0.16.  The number of Shares and
the  Warrant  Price are subject to  adjustment  from time to time as provided in
Section 5 of this  Warrant,  however  the  number of shares  that are  issued or
potentially  issued to the Holder  shall  never be equal to or exceed 20% of the
issued and outstanding common shares as of the date of this agreement,  which is
equal to 30,791,911.

         This Warrant is issued in connection with and as consideration  for the
funds  received  by the Company set forth on the face of the Term Note dated the
date hereof and issued by the  Company in favor of the  Holder,  which Term Note
has been issued  pursuant to that  certain  Term Loan  Agreement  dated the date
hereof between the Company and the Holder.  Three million six hundred sixty-five
thousand seven hundred three  (3,665,703)  warrants are exercisable upon funding
by Holder of the first  installment  pursuant  to the Term Loan  Agreement.  One
million four hundred sixty-six thousand two hundred eighty-one (1,466,281) shall
not be exercisable  unless and until the Holder funds the second  installment of
$100,000  pursuant to the Term Loan Agreement (it being understood that in event
that the  Holder  fails  to fund  the  installment  required  by the  Term  Loan
Agreement  within ten (10) days following the funding date  prescribed  therein,
the right to exercise this warrant in relation to such shares is cancelled). The
balance  of  the  warrants  (one  million  twenty-six   thousand  three  hundred
ninety-seven  (1,026,397))  shall not be exercisable  until the Holder funds the
final installment  pursuant to the Term Loan Agreement (it being understood that
in event that the Holder fails to fund the installment required by the Term Loan
Agreement  within ten (10) days following the funding date  prescribed  therein,
the right to exercise this warrant in relation to such shares is cancelled).

         1. Method of Exercise;  Payment;  Issuance of New Warrant. 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

<PAGE>

(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  (provided,  however,  this clause (ii) shall not be applicable if
the Holder is making a cashless exercise pursuant to Section 2 of this Warrant).
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  five (5) 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,  unless a cashless  exercise is being
made in  accordance  with Section 2 of this Warrant,  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.

         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 the Warrants if and to the extent that the issuance to the
Holder of shares of Common Stock upon such exercise of the Warrants would result
in the  Holder  being  deemed the  "beneficial  owner" of 5% or more of the then
outstanding  shares of Common Stock of the Company within the meaning of Section
13(d)  of the  Securities  Exchange  Act of  1934,  as  amended,  and the  rules
promulgated thereunder.

         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. Exercise.  The Holder shall pay the Warrant Price to the Company for
each  Warrant that it  exercises  if as of the Term Loan  Maturity  Date (a) the
registration  statement  to be filed by the  Company  with  the  Securities  and
Exchange  Commission (the "SEC") to register the Holder's  re-sale of the Common
Stock  underlying  the Warrant has been  declared  effective by the SEC; (b) the
closing bid price of the Common  Stock of the Company as  published in Bloomberg
for each  trading  day within the  thirty  calendar  days prior to the Term Loan
Maturity  Date has  equaled or exceeded  $0.60 per share;  and (c) the volume of
trading of the Common Stock of the Company as  published  in Bloomberg  for each
trading day within the thirty calendar days prior to the Term Loan Maturity Date
has equaled or exceeded 100,000 shares.  If all of such conditions are not fully
satisfied  by the Term  Loan  Maturity  Date,  then in lieu of  exercising  this
Warrant  by payment  in cash or check,  the Holder may elect to pay the  Warrant
Price by reducing the number of Shares issuable upon exercise of this Warrant in
accordance with the following formula:

                               X =    Y(A-B)
                                    ---------
                                        A

Where:      X   =    the number of Shares to be issued to the Holder.

            Y   =    the number of Shares  requested to be exercised under this
                     Warrant.

            A   =    the Fair Market Value of one (1) Share of Common Stock as
                     of the date such  Warrant is exercised.

            B   =    the Warrant Price.

                                     - 2 -
<PAGE>

"Fair  Market  Value" of the  Company's  Common  Stock  means the average of the
closing bid prices of the Common Stock as  published  in  Bloomberg  for the ten
trading days prior to the date of determination of fair market value.

         3. 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.

         4.  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.

         5. 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:

                  (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  5(a) or 5(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.

                                     - 3 -
<PAGE>

            (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  5(a) above,  a dividend  or  distribution
provided for in Section 5(b) above, or a reorganization,  merger,  consolidation
or sale of assets,  provided for in Section  5(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 5(a)
above,  a dividend or  distribution  provided  for in Section  5(b) above,  or a
reclassification  or exchange of shares provided for in Section 5(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 5(e) shall  similarly  apply to successive
reorganizations, mergers, consolidations and sales.

            (f)  Adjustment of Warrant Price for Matching  Purposes.  (i) In the
event that the Company shall issue Common Stock or rights, warrants,  options or
convertible or exchangeable securities entitling the holder thereof to subscribe
for or purchase,  convert into or exchange for Common Stock, in any such case at
a price per share less than $0.16, then the Warrant Price in effect  immediately
prior to such  earliest  date shall be adjusted so that the Warrant  Price shall
equal  the  price   determined  by  multiplying  the  Warrant  Price  in  effect
immediately prior to such earliest date by the fraction:

         (x) whose  numerator  shall be the  number  of  shares of Common  Stock
         outstanding  on such date plus the number of shares which the aggregate
         offering  price of the total number of shares so offered would purchase
         at the then applicable Warrant Price (such amount,  with respect to any
         such  rights,   warrants,   options  or  convertible  or   exchangeable
         securities,  determined  by  multiplying  the  total  number  of shares
         subject thereto by the exercise price of such rights, warrants, options
         or convertible or  exchangeable  securities and dividing the product so
         obtained by the then applicable Warrant Price), and

         (y) whose  denominator  shall be the  number of shares of Common  Stock
         outstanding on such date plus the number of additional shares of Common
         Stock to be issued or  distributed  or receivable  upon exercise of any
         such right, warrant, option or convertible or exchangeable security.

Such  adjustment  shall be made  successively  whenever  any such Common  Stock,
rights,  warrants,  options or convertible or exchangeable securities are issued
or distributed.  In determining whether any rights,  warrants or options entitle
the holders to  subscribe  for or purchase  shares of Common  Stock at less than

                                     - 4 -
<PAGE>

$0.16, and in determining the aggregate offering price of shares of Common Stock
so issued or  distributed,  there shall be taken into account any  consideration
received by the Company for such Common Stock,  rights,  warrants,  options,  or
convertible  or  exchangeable  securities.  If any  right,  warrant,  option  or
convertible or  exchangeable  security to purchase or acquire Common Stock,  the
issuance of which  resulted in an adjustment  in the Warrant  Price  pursuant to
this subsection (i) shall expire and shall not have been exercised,  the Warrant
Price shall  immediately upon such expiration be recomputed to the Warrant Price
which would have been in effect had the  adjustment  of the  Warrant  Price made
upon the issuance of such right, warrant,  option or convertible or exchangeable
security  been made on the  basis of  offering  for  subscription,  purchase  or
issuance,  as the case may be,  only of that  number of  shares of Common  Stock
actually  purchased or issued upon the actual  exercise of such right,  warrant,
option or convertible or exchangeable securities.

                         (ii)  No  adjustment  in the  Warrant  Price  shall  be
required unless the adjustment would require an increase or decrease of at least
1% in the Warrant Price then in effect; provided,  however, that any adjustments
that by reason of this Section 5(f) are not required to be made shall be carried
forward and taken into account in any subsequent  adjustment.  All  calculations
under this Section 5(f) shall be made to the nearest cent or nearest  1/100th of
a share.

                         (iii)  Notwithstanding  anything  to the  contrary  set
forth in this Section  5(f),  no  adjustment  shall be made to the Warrant Price
upon (A) the issuance of shares of Common Stock pursuant to any  compensation or
incentive plan for officers, directors, employees or consultants of the Company,
or (B) the  issuance  of Common  Stock upon the  conversion  or  exercise of the
options, warrants or rights of the Company outstanding as of the date hereof.

            (g) 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
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.

            (h) Notice of  Adjustments.  Whenever this Warrant shall be adjusted
pursuant to this Section 5, 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.

         6. 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 5 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.

                                     - 5 -
<PAGE>

            (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.

         7.  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;

                  (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.

                                     - 6 -
<PAGE>

         8. 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.

         9. 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.

         10. 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 Articles 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

            (e)   Capitalization.   As  of  the   date  of  this   Warrant   the
capitalization of the Company is as follows:

                                     - 7 -
<PAGE>

                  (i) Common Stock. A total of 100,000,000  authorized shares of
                  Common  Stock,  of which  30,791,911  shares  were  issued and
                  outstanding.  All  of  such  outstanding  shares  are  validly
                  issued, fully paid and non-assessable. No shares of the Common
                  Stock are held in the Company's treasury.

                  (ii) Preferred Stock. A total of 25,000,000  authorized shares
                  of Preferred  Stock,  of which 559,322  shares were issued and
                  outstanding.

                  (iii) Options, Warrants,  Reserved Shares. Except as disclosed
                  in the Form  10-KSB for the period  ended  December  31,  2002
                  filed by the Company,  or the Form 10-QSB filed by the Company
                  (or  provided to the Holder if not filed) for the period ended
                  March 31, 2003,  there are no outstanding  options,  warrants,
                  rights   (including   conversion  or  preemptive   rights)  or
                  agreements for the purchase or acquisition from the Company of
                  any shares of its capital stock or any securities  convertible
                  into or ultimately  exchangeable or exercisable for any shares
                  of the  Company's  capital  stock.  No shares of the Company's
                  outstanding  capital  stock,  or stock issuable upon exercise,
                  conversion or exchange of any outstanding options, warrants or
                  rights, or other stock issuable by the Company, are subject to
                  any rights of first  refusal or other rights to purchase  such
                  stock  (whether in favor of the Company or any other  person),
                  pursuant to any agreement,  commitment or other  obligation of
                  the Company.

         11.   Registration   Rights.  If  the  Company  proposes  to  file  any
registration  statement  under the Act (other than Form S-8), with respect to an
offering  of any  equity  securities,  then the  Company  shall  give the Holder
written notice of such proposed  filing as soon as practicable  (but in no event
less than thirty (30) days before the  anticipated  initial  filing date of such
registration statement),  and such notice shall offer the Holder the opportunity
to register  such number of Shares as the Holder shall  request (the  "Piggyback
Shares").  The Company shall bear all costs of registering the Piggyback Shares,
except for underwriting  discounts or commissions if the registration  statement
relates to an underwritten  offering.  Any  registration  rights granted by this
paragraph  expire when shares  issued  pursuant to this  Warrant  Agreement  are
eligible for sale under Rule 144(k) of the Securities Act of 1933.

         12.  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.

         13. 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.

         14.  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.

         15.  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 ILLINOIS.

                                     - 8 -
<PAGE>

         16. 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
covenants  and  agreements  of the  Company  shall  inure to the  benefit of the
successors and assigns of the Holder.

         17.  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.

         18. 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]

                                     - 9 -
<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:      ________________________
                                    Title:     ________________________

                               Address:        23461 South Pointe, Suite 200
                                               Laguna Hills, California 92653
                                               Attention:________________
                                               Facsimile:________________

ACKNOWLEDGED AND ACCEPTED:

AUGUSTINE II, LLC

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

         By:
            -----------------------------------------
         Name:  John T. Porter
         Title:  President

Address:          141 West Jackson Boulevard, Suite 2182
                  Chicago, Illinois 60604
                  Attention:  John T. Porter
                  Facsimile:  (312) 427-5396

                                     - 10 -
<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)

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

                                        ----------------------------------------
                                                      (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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