THIS WARRANT AND THE SHARES OF COMMON STOCK  ISSUABLE UPON EXERCISE  HEREOF HAVE
NOT  BEEN  REGISTERED  UNDER  THE  SECURITIES  ACT  OF  1933,  AS  AMENDED  (THE
"SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD,  TRANSFERRED
OR OTHERWISE  DISPOSED OF UNLESS  REGISTERED  UNDER THE SECURITIES ACT AND UNDER
APPLICABLE  STATE  SECURITIES  LAWS OR AXM PHARMA,  INC.  SHALL HAVE RECEIVED AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO AXM PHARMA, INC. THAT REGISTRATION
OF SUCH  SECURITIES  UNDER  THE  SECURITIES  ACT AND  UNDER  THE  PROVISIONS  OF
APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.

                               WARRANT TO PURCHASE

                             SHARES OF COMMON STOCK

                                       OF

                                AXM PHARMA, INC.

                              Expires June 24, 2007


No.: W-04-__                                       Number of Shares: ___________
Date of Issuance: June 24, 2004


         FOR VALUE  RECEIVED,  subject to the provisions  hereinafter set forth,
the  undersigned,  AXM Pharma,  Inc., a Nevada  corporation  (together  with its
successors    and   assigns,    the    "Issuer"),    hereby    certifies    that
_______________________________   or  its  registered  assigns  is  entitled  to
subscribe  for and purchase,  during the Term (as  hereinafter  defined),  up to
____________________________________    (_____________)   shares   (subject   to
adjustment as  hereinafter  provided) of the duly  authorized,  validly  issued,
fully paid and  non-assessable  Common Stock of the Issuer, at an exercise price
per share equal to the Warrant Price then in effect,  subject,  however,  to the
provisions and upon the terms and conditions hereinafter set forth.  Capitalized
terms used in this  Warrant  and not  otherwise  defined  herein  shall have the
respective meanings specified in Section 9 hereof.

         1.  Term.  The term of this Warrant shall commence on June 24, 2004 and
shall expire at 5:00 p.m., eastern time, on June 24, 2007 (such period being the
"Term").

         2.  Method of Exercise Payment;  Issuance of New Warrant;  Transfer and
Exchange.

         (a)  Time of Exercise.  The purchase rights represented by this Warrant
may be exercised in whole or in part during the Term commencing on June 24, 2004
and expiring on June 24, 2007.


<PAGE>


         (b)  Method of Exercise.  The Holder hereof may exercise  this Warrant,
in whole or in part,  by the  surrender of this Warrant  (with the exercise form
attached hereto duly executed) at the principal office of the Issuer, and by the
payment  to the  Issuer  of an  amount of  consideration  therefor  equal to the
Warrant Price in effect on the date of such exercise multiplied by the number of
shares of  Warrant  Stock  with  respect  to which  this  Warrant  is then being
exercised, payable by certified or official bank check or by wire transfer to an
account designated by the Issuer.

         (c)  Issuance of Stock Certificates.  In the event of any  exercise  of
the rights  represented  by this Warrant in  accordance  with and subject to the
terms and conditions hereof, (i) certificates for the shares of Warrant Stock so
purchased  shall be dated the date of such  exercise and delivered to the Holder
hereof within a reasonable time, not exceeding three (3) Trading Days after such
exercise  or,  at  the  request  of the  Holder  (provided  that a  registration
statement under the Securities Act providing for the resale of the Warrant Stock
is then in effect), issued and delivered to the Depository Trust Company ("DTC")
account on the  Holder's  behalf via the  Deposit  Withdrawal  Agent  Commission
System ("DWAC")  within a reasonable  time, not exceeding three (3) Trading Days
after such  exercise,  and the Holder hereof shall be deemed for all purposes to
be the holder of the shares of Warrant Stock so purchased as of the date of such
exercise and (ii) unless this Warrant has  expired,  a new Warrant  representing
the  number of shares of  Warrant  Stock,  if any,  with  respect  to which this
Warrant  shall not then have been  exercised  shall also be issued to the Holder
hereof at the Issuer's expense within such time.

         (d)  Transferability of Warrant.  Subject to Section 2(f), this Warrant
may be transferred by a Holder without the consent of the Issuer. If transferred
pursuant to this  paragraph and subject to the  provisions of subsection  (f) of
this  Section 2, this Warrant may be  transferred  on the books of the Issuer by
the Holder hereof in person or by duly  authorized  attorney,  upon surrender of
this Warrant at the principal  office of the Issuer,  properly  endorsed (by the
Holder  executing an assignment in the form attached hereto) and upon payment of
any  necessary  transfer  tax or other  governmental  charge  imposed  upon such
transfer. This Warrant is exchangeable at the principal office of the Issuer for
Warrants  for the  purchase  of the same  aggregate  number of shares of Warrant
Stock, each new Warrant to represent the right to purchase such number of shares
of  Warrant  Stock as the  Holder  hereof  shall  designate  at the time of such
exchange.  All Warrants  issued on  transfers  or  exchanges  shall be dated the
Original  Issue Date and shall be identical  with this Warrant  except as to the
number of shares of Warrant Stock issuable pursuant thereto.

         (e)  Continuing Rights of Holder.  The  Issuer will, at the time  of or
at any time after each exercise of this Warrant,  upon the request of the Holder
hereof,  acknowledge in writing the extent, if any, of its continuing obligation
to afford to such  Holder all rights to which such Holder  shall  continue to be
entitled  after such  exercise  in  accordance  with the terms of this  Warrant,
provided  that if any such  Holder  shall  fail to make any  such  request,  the
failure shall not affect the continuing  obligation of the Issuer to afford such
rights to such Holder.


         (f)  Compliance with Securities Laws.


                                       2
<PAGE>


                  (i)  The  Holder  of  this  Warrant,   by  acceptance  hereof,
         acknowledges  that this  Warrant or the  shares of Warrant  Stock to be
         issued upon exercise  hereof are being acquired solely for the Holder's
         own  account  and  not as a  nominee  for  any  other  party,  and  for
         investment,  and that the  Holder  will not  offer,  sell or  otherwise
         dispose of this  Warrant  or any  shares of Warrant  Stock to be issued
         upon  exercise  hereof  except  pursuant to an  effective  registration
         statement, or an exemption from registration,  under the Securities Act
         and any applicable state securities laws.

                  (ii) Except as provided in paragraph (iii) below, this Warrant
         and all certificates  representing  shares of Warrant Stock issued upon
         exercise  hereof  shall  be  stamped  or  imprinted  with a  legend  in
         substantially the following form:

                  THIS  WARRANT  AND THE SHARES OF COMMON  STOCK  ISSUABLE  UPON
                  EXERCISE HEREOF HAVE NOT BEEN REGISTERED  UNDER THE SECURITIES
                  ACT OF 1933,  AS AMENDED (THE  "SECURITIES  ACT") OR ANY STATE
                  SECURITIES LAWS AND MAY NOT BE SOLD,  TRANSFERRED OR OTHERWISE
                  DISPOSED OF UNLESS  REGISTERED  UNDER THE  SECURITIES  ACT AND
                  UNDER  APPLICABLE  STATE  SECURITIES LAWS OR AXM PHARMA,  INC.
                  SHALL  HAVE   RECEIVED   AN  OPINION  OF  COUNSEL   REASONABLY
                  SATISFACTORY  TO AXM PHARMA,  INC. THAT  REGISTRATION  OF SUCH
                  SECURITIES  UNDER THE  SECURITIES ACT AND UNDER THE PROVISIONS
                  OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.

                  (iii)  The   Issuer   agrees  to  reissue   this   Warrant  or
         certificates  representing any of the Warrant Stock, without the legend
         set forth  above if at such time,  prior to making any  transfer of any
         such  securities,  the Holder shall give  written  notice to the Issuer
         describing  the manner and terms of such  transfer  and  removal as the
         Issuer may reasonably request.  Such proposed transfer and removal will
         not be  effected  until:  (a) either (i) the  Issuer  has  received  an
         opinion of counsel reasonably satisfactory to the Issuer, to the effect
         that the  registration of such  securities  under the Securities Act is
         not  required  in  connection  with  such  proposed  transfer,  (ii)  a
         registration  statement under the Securities Act covering such proposed
         disposition  has been  filed by the  Issuer  with  the  Securities  and
         Exchange  Commission and has become effective under the Securities Act,
         (iii) the Issuer has received other evidence reasonably satisfactory to
         the  Issuer  that  such  registration  and   qualification   under  the
         Securities Act and state securities laws are not required,  or (iv) the
         Holder  provides  the  Issuer  with  reasonable  assurances  that  such
         security can be sold pursuant to Rule 144 under the Securities Act; and
         (b) either (i) the Issuer has received an opinion of counsel reasonably
         satisfactory  to  the  Issuer,  to  the  effect  that  registration  or
         qualification  under the  securities or "blue sky" laws of any state is
         not required in  connection  with such  proposed  disposition,  or (ii)
         compliance with applicable state securities or "blue sky" laws has been
         effected or a valid exemption exists with respect  thereto.  The Issuer
         will respond to any such notice from a holder  within five (5) business


                                       3
<PAGE>

         days. In the case of any proposed transfer under this Section 2(f), the
         Issuer will use reasonable  efforts to comply with any such  applicable
         state securities or "blue sky" laws, but shall in no event be required,
         (x) to  qualify  to do  business  in any  state  where  it is not  then
         qualified,  (y) to take any action  that would  subject it to tax or to
         the  general  service  of  process  in any  state  where it is not then
         subject,  or (z) to comply with state  securities or "blue sky" laws of
         any state for which  registration by coordination is unavailable to the
         Issuer.  The  restrictions  on transfer  contained in this Section 2(f)
         shall be in  addition  to, and not by way of  limitation  of, any other
         restrictions  on  transfer  contained  in any  other  section  of  this
         Warrant.  Whenever a  certificate  representing  the  Warrant  Stock is
         required  to be issued  to a the  Holder  without a legend,  in lieu of
         delivering  physical  certificates   representing  the  Warrant  Stock,
         provided the Issuer's  transfer agent is  participating in the DTC Fast
         Automated  Securities  Transfer  program,  the  Issuer  shall  use  its
         reasonable  best efforts to cause its transfer agent to  electronically
         transmit the Warrant  Stock to the Holder by  crediting  the account of
         the  Holder's  Prime  Broker  with DTC  through its DWAC system (to the
         extent not  inconsistent  with any  provisions  of this  Warrant or the
         Purchase Agreement).

         (g) In no event may the  Holder  exercise  this  Warrant in whole or in
part unless the Holder is an  "accredited  investor" as defined in  Regulation D
under the Securities Act.

         3.  Stock Fully Paid; Reservation and Listing of Shares; Covenants.

         (a) Stock Fully Paid. The Issuer  represents,  warrants,  covenants and
agrees that all shares of Warrant Stock which may be issued upon the exercise of
this Warrant or otherwise  hereunder  will,  when issued in accordance  with the
terms of this  Warrant,  be duly  authorized,  validly  issued,  fully  paid and
non-assessable  and free from all taxes, liens and charges created by or through
the  Issuer.  The Issuer  further  covenants  and agrees  that during the period
within  which this Warrant may be  exercised,  the Issuer will at all times have
authorized  and  reserved  for the  purpose of the issue upon  exercise  of this
Warrant  a  sufficient  number of shares  of  Common  Stock to  provide  for the
exercise of this Warrant.

         (b) Reservation.  If any shares of Common Stock required to be reserved
for issuance  upon exercise of this Warrant or as otherwise  provided  hereunder
require registration or qualification with any governmental  authority under any
federal or state law before  such  shares may be so issued,  the Issuer  will in
good faith use its reasonable best efforts as  expeditiously  as possible at its
expense to cause such shares to be duly  registered or qualified.  If the Issuer
shall list any shares of Common  Stock on any  securities  exchange or market it
will, at its expense,  list thereon,  maintain and increase when  necessary such
listing,  of, all shares of Warrant Stock from time to time issued upon exercise
of this Warrant or as otherwise provided  hereunder  (provided that such Warrant
Stock  has been  registered  pursuant  to a  registration  statement  under  the
Securities  Act then in  effect),  and,  to the  extent  permissible  under  the
applicable securities exchange rules, all unissued shares of Warrant Stock which
are at any time issuable hereunder,  so long as any shares of Common Stock shall
be so  listed.  The  Issuer  will also so list on each  securities  exchange  or
market, and will maintain such listing of, any other securities which the Holder
of this  Warrant  shall be entitled to receive upon the exercise of this Warrant
if at the time  any  securities  of the  same  class  shall  be  listed  on such
securities exchange or market by the Issuer.


                                       4
<PAGE>


         (c) Covenants.  The Issuer shall not by any action  including,  without
limitation, amending the Articles of Incorporation or the by-laws of the Issuer,
or  through  any  reorganization,  transfer  of assets,  consolidation,  merger,
dissolution,  issue or sale of securities or any other action,  avoid or seek to
avoid the  observance or  performance  of any of the terms of this Warrant,  but
will at all times in good faith assist in the carrying out of all such terms and
in the taking of all such actions as may be necessary or  appropriate to protect
the rights of the Holder  hereof  against  dilution (to the extent  specifically
provided  herein)  or  impairment.   Without  limiting  the  generality  of  the
foregoing,  the Issuer will (i) not permit the par value,  if any, of its Common
Stock to exceed the then effective  Warrant Price,  (ii) not amend or modify any
provision  of the  Articles  of  Incorporation  or  by-laws of the Issuer in any
manner that would adversely  affect the rights of the Holders of the Warrants in
their capacity as Holders of the Warrants,  (iii) take all such action as may be
reasonably  necessary  in order that the Issuer may validly  and  legally  issue
fully  paid and  nonassessable  shares  of Common  Stock,  free and clear of any
liens,  claims,  encumbrances and  restrictions  (other than as provided herein)
upon the exercise of this Warrant,  and (iv) use its reasonable  best efforts to
obtain  all  such  authorizations,   exemptions  or  consents  from  any  public
regulatory body having  jurisdiction  thereof as may be reasonably  necessary to
enable the Issuer to perform its obligations under this Warrant.

         (d) Loss,  Theft,  Destruction  of  Warrants.  Upon receipt of evidence
satisfactory to the Issuer of the ownership of and the loss, theft,  destruction
or  mutilation  of any  Warrant  and,  in the  case of any such  loss,  theft or
destruction,  upon receipt of indemnity or security  satisfactory  to the Issuer
or, in the case of any such mutilation,  upon surrender and cancellation of such
Warrant,  the  Issuer  will  make and  deliver,  in lieu of such  lost,  stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same number of shares of Common Stock.

         4.  Adjustment of Warrant Price.  The price at which such shares may be
purchased upon exercise of this Warrant shall be subject to adjustment from time
to time as set forth in this Section 4. The Issuer shall give the Holder  notice
of any event  described  below  which  requires an  adjustment  pursuant to this
Section 4 in accordance with Section 5.

         (a) Recapitalization,  Reorganization, Reclassification, Consolidation,
Merger or Sale.

                  (i) In case the Issuer after the Original  Issue Date shall do
         any of the following (each, a "Triggering  Event"):  (a) consolidate or
         merge with or into another corporation where the holders of outstanding
         Voting Stock prior to such merger or  consolidation do not own over 50%
         of the outstanding  Voting Stock of the merged or  consolidated  entity
         immediately  after  such  merger or  consolidation,  or (b) sell all or
         substantially  all of its properties or assets to any other Person,  or
         (c) change the Common Stock to the same or  different  number of shares
         of  any  class  or  classes  of  stock,  whether  by  reclassification,
         exchange, substitution or otherwise (other than by way of a stock split
         or combination of shares or stock dividends or  distributions  provided
         for in  Section  4(b)  or  Section  4(c)),  or  (d)  effect  a  capital
         reorganization  (other than by way of a stock split or  combination  of
         shares or stock dividends or distributions provided for in Section 4(b)
         or Section 4(c)),  then, and in the case of each such Triggering Event,
         proper  provision  shall be made so that,  upon the basis and the terms
         and in the manner provided in this Warrant,  the Holder of this Warrant
         shall be  entitled  upon the  exercise  hereof  at any time  after  the


                                       5
<PAGE>

         consummation  of such  Triggering  Event, to the extent this Warrant is
         not exercised prior to such Triggering Event, to receive at the Warrant
         Price in effect at the time  immediately  prior to the  consummation of
         such  Triggering  Event in lieu of the Common Stock  issuable upon such
         exercise  of  this  Warrant  prior  to  such  Triggering   Event,   the
         securities,  cash and  property  to which such  Holder  would have been
         entitled upon the  consummation of such Triggering Event if such Holder
         had exercised the rights represented by this Warrant  immediately prior
         thereto,  subject to adjustments  (subsequent to such corporate action)
         as nearly  equivalent  as  possible  to the  adjustments  provided  for
         elsewhere in this Section 4.

                  (ii) Notwithstanding anything contained in this Warrant to the
         contrary,  a Triggering  Event shall not be deemed to have occurred if,
         prior to the consummation  thereof, each Person (other than the Issuer)
         which may be required to deliver any securities,  cash or property upon
         the  exercise  of this  Warrant as provided  herein  shall  assume,  by
         written  instrument  delivered to, and reasonably  satisfactory to, the
         Holder of this Warrant,  (A) the  obligations  of the Issuer under this
         Warrant  (and if the Issuer  shall  survive  the  consummation  of such
         Triggering  Event,  such assumption  shall be in addition to, and shall
         not release the Issuer from, any  continuing  obligations of the Issuer
         under this  Warrant) and (B) the  obligation  to deliver to such Holder
         such shares of securities,  cash or property as, in accordance with the
         foregoing  provisions  of this  subsection  (a),  such Holder  shall be
         entitled to receive,  and such Person shall have similarly delivered to
         such  Holder a written  acknowledgement  executed by the  President  or
         Chief Financial Officer of the Company, stating that this Warrant shall
         thereafter  continue  in full  force and  effect  and the terms  hereof
         (including,   without  limitation,   all  of  the  provisions  of  this
         subsection (a)) shall be applicable to the securities, cash or property
         which such Person may be required to deliver  upon any exercise of this
         Warrant or the exercise of any rights pursuant hereto.

                  (b) Stock Dividends,  Subdivisions and Combinations. If at any
time the Issuer shall:

                           (i)  make  or  issue  or set a  record  date  for the
         holders  of its  Common  Stock for the  purpose  of  entitling  them to
         receive a dividend  payable  in, or other  distribution  of,  shares of
         Common Stock,

                           (ii) subdivide its outstanding shares of Common Stock
         into a larger number of shares of Common Stock, or

                           (iii) combine its outstanding  shares of Common Stock
         into a smaller number of shares of Common Stock,

then (1) the  number  of  shares of Common  Stock  for  which  this  Warrant  is
exercisable immediately after the occurrence of any such event shall be adjusted
to equal the number of shares of Common Stock which a record  holder of the same
number of  shares  of  Common  Stock  for  which  this  Warrant  is  exercisable
immediately  prior to the  occurrence  of such event would own or be entitled to
receive  after the  happening of such event,  and (2) the Warrant  Price then in
effect  shall  be  adjusted  to  equal  (A) the  Warrant  Price  then in  effect


                                       6
<PAGE>

multiplied  by the number of shares of Common  Stock for which  this  Warrant is
exercisable  immediately  prior to the  adjustment  divided by (B) the number of
shares of Common Stock for which this Warrant is exercisable  immediately  after
such adjustment.

Notwithstanding  the  foregoing,  if such  record date shall have been fixed and
such dividend is not fully paid or if such distribution is not fully made on the
date fixed  therefor,  the  Warrant  Price  shall be  adjusted  pursuant to this
paragraph as of the time of actual payment of such dividends or distributions.

         (c) Certain Other  Distributions.  If at any time the Issuer shall make
or issue or set a record date for the determination of the holders of its Common
Stock for the  purpose  of  entitling  them to  receive  any  dividend  or other
distribution of:

                           (i) cash (other than a cash  dividend  payable out of
         earnings  or  earned  surplus  legally  available  for the  payment  of
         dividends under the laws of the  jurisdiction of  incorporation  of the
         Issuer),

                           (ii) any evidences of its indebtedness, any shares of
         stock of any class or any other  securities  or  property of any nature
         whatsoever  (other  than cash,  Convertible  Securities  or  Additional
         Shares of Common Stock), or

                           (iii) any warrants or other  rights to subscribe  for
         or purchase any evidences of its  indebtedness,  any shares of stock of
         any class or any other securities or property of any nature  whatsoever
         (other than cash, Convertible Securities or Additional Shares of Common
         Stock),

then (1) the  number  of  shares of Common  Stock  for  which  this  Warrant  is
exercisable  shall be  adjusted  to equal the product of the number of shares of
Common Stock for which this  Warrant is  exercisable  immediately  prior to such
adjustment  multiplied by a fraction (A) the numerator of which shall be the Per
Share Market Value of Common Stock at the date of taking such record and (B) the
denominator  of which  shall be such Per Share  Market  Value  minus the  amount
allocable to one share of Common Stock of any such cash so distributable  and of
the fair value (as  determined  in good faith by the Board of  Directors  of the
Issuer and supported by an opinion from an investment banking firm of recognized
national standing acceptable to (but not affiliated with) the Holder) of any and
all such  evidences  of  indebtedness,  shares of  stock,  other  securities  or
property or warrants or other  subscription or purchase rights so distributable,
and (2) the  Warrant  Price then in effect  shall be  adjusted  to equal (A) the
Warrant Price then in effect  multiplied by the number of shares of Common Stock
for which  this  Warrant  is  exercisable  immediately  prior to the  adjustment
divided  by (B) the number of shares of Common  Stock for which this  Warrant is
exercisable immediately after such adjustment.  A reclassification of the Common
Stock  (other  than a change in par value,  or from par value to no par value or
from no par value to par value)  into  shares of Common  Stock and shares of any
other class of stock shall be deemed a distribution by the Issuer to the holders
of its  Common  Stock of such  shares of such  other  class of stock  within the
meaning of this  Section  4(c) and, if the  outstanding  shares of Common  Stock
shall be changed into a larger or smaller  number of shares of Common Stock as a
part of such  reclassification,  such change  shall be deemed a  subdivision  or
combination,  as the case may be, of the  outstanding  shares  of  Common  Stock
within the meaning of Section 4(b).


                                       7
<PAGE>


Notwithstanding  the  foregoing,  if such  record date shall have been fixed and
such dividend is not fully paid or if such distribution is not fully made on the
date fixed  therefor,  the  Warrant  Price  shall be  adjusted  pursuant to this
Section  4(c)  as  of  the  time  of  actual   payment  of  such   dividends  or
distributions.

         (d) Issuance of Additional Shares of Common Stock.

                  (i) In the event the Issuer  shall at any time  following  the
Original Issue Date issue any Additional  Shares of Common Stock (otherwise than
as provided in the foregoing  subsections (a) through (c) of this Section 4), at
a price  per share  less  than the  Warrant  Price  then in  effect  or  without
consideration,  then the Warrant Price upon each such issuance shall be adjusted
to that price  determined by  multiplying  the Warrant Price then in effect by a
fraction:

                           (A) the  numerator of which shall be equal to the sum
                  of (x) the  number  of  shares  of  Outstanding  Common  Stock
                  immediately prior to the issuance of such Additional Shares of
                  Common  Stock  plus (y) the  number of shares of Common  Stock
                  (rounded  to the  nearest  whole  share)  which the  aggregate
                  consideration  for the total number of such Additional  Shares
                  of Common Stock so issued would  purchase at a price per share
                  equal to the Warrant Price then in effect, and

                           (B) the  denominator  of which  shall be equal to the
                  number of shares of Outstanding Common Stock immediately after
                  the issuance of such Additional Shares of Common Stock.

                  (ii) No adjustment of the number of shares of Common Stock for
which this Warrant  shall be  exercisable  shall be made under  paragraph (i) of
Section  4(d) upon the issuance of any  Additional  Shares of Common Stock which
are issued pursuant to the exercise of any Common Stock Equivalents, if any such
adjustment  shall  previously  have been made upon the  issuance  of such Common
Stock Equivalents (or upon the issuance of any warrant or other rights therefor)
pursuant to Section 4(e).

         (e)  Issuance of Common  Stock  Equivalents.  If at any time the Issuer
shall issue or sell any Common Stock  Equivalents,  whether or not the rights to
exchange or convert  thereunder are immediately  exercisable,  and the aggregate
price per share for which  Common  Stock is  issuable  upon such  conversion  or
exchange  plus the  consideration  received  by the Issuer for  issuance of such
Common Stock Equivalent divided by the number of shares of Common Stock issuable
pursuant to such Common Stock Equivalent shall be less than the Warrant Price in
effect  immediately  prior to the time of such issue or sale, then the number of
shares of Common  Stock for which this  Warrant is  exercisable  and the Warrant
Price then in effect  shall be adjusted as provided in Section 4(d) on the basis
that the maximum number of Additional Shares of Common Stock necessary to effect
the conversion or exchange of all such Common Stock  Equivalents shall be deemed
to have been issued and  outstanding  and the Issuer shall have  received all of
the consideration payable therefor, if any, as of the date of actual issuance of
such Common Stock Equivalents.  No further adjustment of the number of shares of
Common Stock for which this Warrant is exercisable and the Warrant Price then in
effect  shall be made under this  Section  4(e) upon the  issuance of any Common


                                       8
<PAGE>

Stock  Equivalents  which are issued pursuant to the exercise of any warrants or
other  subscription or purchase rights  therefor,  if any such adjustment  shall
previously  have been made upon the  issuance of such  warrants or other  rights
pursuant to this Section 4(e). No further adjustments of the number of shares of
Common Stock for which this Warrant is exercisable and the Warrant Price then in
effect shall be made upon the actual issue of such Common Stock upon  conversion
or exchange of such Common Stock Equivalents.

         (f) Superseding Adjustment. If, at any time after any adjustment of the
number of shares of Common Stock for which this Warrant is  exercisable  and the
Warrant  Price then in effect  shall have been made  pursuant to Section 4(e) as
the result of any  issuance  of Common  Stock  Equivalents,  and (i) such Common
Stock  Equivalents,  or the right of conversion or exchange in such Common Stock
Equivalents,  shall  expire,  and  all or a  portion  of such  or the  right  of
conversion  or exchange  with  respect to all or a portion of such Common  Stock
Equivalents,  as the case may be,  shall  not have been  exercised,  or (ii) the
consideration  per share for which shares of Common Stock are issuable  pursuant
to such  Common  Stock  Equivalents  shall  be  increased,  then  such  previous
adjustment  shall be rescinded and annulled and the Additional  Shares of Common
Stock which were deemed to have been issued by virtue of the computation made in
connection  with the  adjustment  so rescinded  and annulled  shall no longer be
deemed to have been issued by virtue of such computation. Upon the occurrence of
an event set forth in this  Section 4(f) above,  there shall be a  recomputation
made of the  effect of such  Common  Stock  Equivalents  on the  basis  of:  (i)
treating the number of Additional  Shares of Common Stock  theretofore  actually
issued or issuable pursuant to the previous exercise of Common Stock Equivalents
or any such right of conversion  or exchange,  as having been issued on the date
or dates of any such exercise and for the  consideration  actually  received and
receivable  therefor,  and (ii) treating any such Common Stock Equivalents which
then remain  outstanding as having been granted or issued  immediately after the
time of such increase of the consideration per share for which Additional Shares
of Common Stock are issuable  under such Common Stock  Equivalents;  whereupon a
new adjustment of the number of shares of Common Stock for which this Warrant is
exercisable  and the  Warrant  Price  then in  effect  shall be made,  which new
adjustment shall supersede the previous adjustment so rescinded and annulled.

         (h) Purchase of Common  Stock by the Issuer.  If the Issuer at any time
while this  Warrant is  outstanding  shall,  directly  or  indirectly  through a
Subsidiary or  otherwise,  purchase,  redeem or otherwise  acquire any shares of
Common Stock at a price per share greater than the Per Share Market Value,  then
the Warrant Price upon each such purchase,  redemption or  acquisition  shall be
adjusted  to that  price  determined  by  multiplying  such  Warrant  Price by a
fraction (i) the numerator of which shall be the number of shares of Outstanding
Common Stock immediately prior to such purchase, redemption or acquisition minus
the number of shares of Common Stock which the aggregate  consideration  for the
total number of such shares of Common Stock so  purchased,  redeemed or acquired
would purchase at the Per Share Market Value;  and (ii) the denominator of which
shall be the number of shares of Outstanding Common Stock immediately after such
purchase,  redemption or  acquisition.  For the purposes of this subsection (h),
the date as of which the Per Share Market  Price shall be computed  shall be the
earlier of (x) the date on which the Issuer shall enter into a firm contract for
the purchase, redemption or acquisition of such Common Stock, or (y) the date of
actual  purchase,  redemption  or  acquisition  of such  Common  Stock.  For the
purposes of this  subsection  (h), a purchase,  redemption or  acquisition  of a
Common  Stock  Equivalent  shall be deemed to be a  purchase  of the  underlying


                                       9
<PAGE>

Common Stock, and the computation  herein required shall be made on the basis of
the full exercise, conversion or exchange of such Common Stock Equivalent on the
date as of which such computation is required hereby to be made,  whether or not
such  Common  Stock   Equivalent  is  actually   exercisable,   convertible   or
exchangeable on such date.

         (i) Other Provisions  applicable to Adjustments under this Section. The
following  provisions  shall be applicable to the making of  adjustments  of the
number of shares of Common Stock for which this Warrant is  exercisable  and the
Warrant Price then in effect provided for in this Section 4:

                  (i)  Computation  of  Consideration.  To the  extent  that any
Additional  Shares of  Common  Stock or any  Common  Stock  Equivalents  (or any
warrants or other rights therefor) shall be issued for cash  consideration,  the
consideration  received by the Issuer  therefor  shall be the amount of the cash
received by the Issuer therefor,  or, if such Additional  Shares of Common Stock
or Common  Stock  Equivalents  are offered by the Issuer for  subscription,  the
subscription  price,  or, if such  Additional  Shares of Common  Stock or Common
Stock  Equivalents  are sold to  underwriters  or dealers  for  public  offering
without a subscription  offering, the initial public offering price (in any such
case  subtracting any amounts paid or receivable for accrued interest or accrued
dividends  and  without  taking  into  account any  compensation,  discounts  or
expenses  paid or  incurred  by the  Issuer for and in the  underwriting  of, or
otherwise in connection  with,  the issuance  thereof).  In connection  with any
merger or consolidation in which the Issuer is the surviving  corporation (other
than any consolidation or merger in which the previously  outstanding  shares of
Common  Stock of the Issuer  shall be changed to or  exchanged  for the stock or
other securities of another corporation),  the amount of consideration therefore
shall be,  deemed to be the fair value,  as  determined  reasonably  and in good
faith  by  the  Board,  of  such  portion  of the  assets  and  business  of the
nonsurviving  corporation as the Board may determine to be  attributable to such
shares of Common  Stock or Common  Stock  Equivalents,  as the case may be.  The
consideration for any Additional Shares of Common Stock issuable pursuant to any
warrants or other  rights to  subscribe  for or  purchase  the same shall be the
consideration  received by the Issuer for issuing such  warrants or other rights
plus the  additional  consideration  payable to the Issuer upon exercise of such
warrants or other rights.  The consideration for any Additional Shares of Common
Stock issuable  pursuant to the terms of any Common Stock  Equivalents  shall be
the consideration received by the Issuer for issuing warrants or other rights to
subscribe for or purchase such Common Stock Equivalents,  plus the consideration
paid or payable to the Issuer in respect of the  subscription for or purchase of
such  Common  Stock  Equivalents,  plus the  additional  consideration,  if any,
payable to the Issuer upon the exercise of the right of  conversion  or exchange
in such Common Stock Equivalents. In the event of any consolidation or merger of
the Issuer in which the Issuer is not the surviving  corporation or in which the
previously  outstanding  shares of Common  Stock of the Issuer  shall be changed
into or exchanged for the stock or other securities of another  corporation,  or
in the event of any sale of all or substantially all of the assets of the Issuer
for stock or other securities of any corporation,  the Issuer shall be deemed to
have issued a number of shares of its Common  Stock for stock or  securities  or
other  property  of the other  corporation  computed  on the basis of the actual
exchange ratio on which the transaction was predicated,  and for a consideration
equal to the fair market value on the date of such transaction of all such stock
or  securities  or other  property  of the other  corporation.  In the event any
consideration  received  by the Issuer for any  securities  consists of property
other than cash,  the fair  market  value  thereof at the time of issuance or as


                                       10
<PAGE>

otherwise  applicable  shall be as determined in good faith by the Board. In the
event Common Stock is issued with other shares or  securities or other assets of
the Issuer for consideration  which covers both, the  consideration  computed as
provided in this Section  4(i)(i) shall be allocated  among such  securities and
assets as determined in good faith by the Board.

                  (ii) When Adjustments to Be Made. The adjustments  required by
this  Section  4 shall be made  whenever  and as often  as any  specified  event
requiring an adjustment shall occur, except that any adjustment of the number of
shares of Common  Stock  for  which  this  Warrant  is  exercisable  that  would
otherwise be required may be postponed  (except in the case of a subdivision  or
combination  of shares of the Common Stock,  as provided for in Section 4(b)) up
to, but not beyond the date of exercise if such  adjustment  either by itself or
with other  adjustments  not  previously  made adds or  subtracts  less than one
percent (1%) of the shares of Common Stock for which this Warrant is exercisable
immediately prior to the making of such adjustment.  Any adjustment representing
a change  of less  than such  minimum  amount  (except  as  aforesaid)  which is
postponed shall be carried forward and made as soon as such adjustment, together
with other adjustments required by this Section 4 and not previously made, would
result in a minimum  adjustment  or on the date of exercise.  For the purpose of
any  adjustment,  any  specified  event shall be deemed to have  occurred at the
close of business on the date of its occurrence.

                  (iii) Fractional  Interests.  In computing  adjustments  under
this Section 4, fractional interests in Common Stock shall be taken into account
to the nearest one one-hundredth (1/100th) of a share.

                  (iv) When Adjustment Not Required.  If the Issuer shall take a
record of the holders of its Common Stock for the purpose of  entitling  them to
receive a dividend or distribution or subscription or purchase rights and shall,
thereafter and before the distribution to stockholders thereof,  legally abandon
its plan to pay or deliver such dividend, distribution, subscription or purchase
rights,  then thereafter no adjustment shall be required by reason of the taking
of such record and any such adjustment  previously made in respect thereof shall
be rescinded and annulled.

         (j) Form of Warrant  after  Adjustments.  The form of this Warrant need
not be changed because of any adjustments in the Warrant Price or the number and
kind of Securities purchasable upon the exercise of this Warrant.

         (k)  Escrow  of  Warrant   Stock.   If  after  any   property   becomes
distributable  pursuant to this  Section 4 by reason of the taking of any record
of the holders of Common  Stock,  but prior to the  occurrence  of the event for
which such record is taken, and the Holder exercises this Warrant, any shares of
Common Stock issuable upon exercise by reason of such adjustment shall be deemed
the  last  shares  of  Common   Stock  for  which  this   Warrant  is  exercised
(notwithstanding  any other provision to the contrary herein) and such shares or
other property shall be held in escrow for the Holder by the Issuer to be issued
to the Holder upon and to the extent that the event actually  takes place,  upon
payment of the current Warrant Price. Notwithstanding any other provision to the
contrary herein,  if the event for which such record was taken fails to occur or
is  rescinded,  then such  escrowed  shares shall be cancelled by the Issuer and
escrowed property returned.


                                       11
<PAGE>


         5. Notice of  Adjustments.  Whenever the Warrant Price or Warrant Share
Number  shall be adjusted  pursuant  to Section 4 hereof  (for  purposes of this
Section 5, each an  "adjustment"),  the Issuer  shall cause its Chief  Financial
Officer to prepare  and  execute a  certificate  setting  forth,  in  reasonable
detail,  the event requiring the adjustment,  the amount of the adjustment,  the
method by which such  adjustment was calculated  (including a description of the
basis on which the Board  made any  determination  hereunder),  and the  Warrant
Price and Warrant Share Number after giving effect to such adjustment, and shall
cause copies of such  certificate  to be delivered to the Holder of this Warrant
promptly after each adjustment. Any dispute between the Issuer and the Holder of
this Warrant with  respect to the matters set forth in such  certificate  may at
the option of the Holder of this  Warrant be  submitted  to one of the  national
accounting  firms  currently  known as the "big four"  selected  by the  Holder,
provided  that the Issuer shall have ten (10) days after  receipt of notice from
such Holder of its selection of such firm to object thereto,  in which case such
Holder shall select another such firm and the Issuer shall have no such right of
objection.  The firm  selected by the Holder of this  Warrant as provided in the
preceding  sentence shall be instructed to deliver a written  opinion as to such
matters to the Issuer and such Holder within  thirty (30) days after  submission
to it of such  dispute.  Such opinion  shall be final and binding on the parties
hereto.

         6.  Fractional  Shares.  No fractional  shares of Warrant Stock will be
issued in connection  with any exercise  hereof,  but in lieu of such fractional
shares,  the Issuer  shall make a cash payment  therefor  equal in amount to the
product of the applicable fraction multiplied by the Per Share Market Value then
in effect.

         7. Ownership Cap and Certain Exercise Restrictions. (a) Notwithstanding
anything to the contrary set forth in this  Warrant,  at no time may a Holder of
this Warrant exercise this Warrant if the number of shares of Common Stock to be
issued  pursuant to such exercise would exceed,  when  aggregated with all other
shares of Common  Stock owned by such Holder at such time,  the number of shares
of Common  Stock  which  would  result in such  Holder  beneficially  owning (as
determined  in  accordance  with Section 13(d) of the Exchange Act and the rules
thereunder)  in  excess of 4.9% of the then  issued  and  outstanding  shares of
Common Stock;  provided,  however,  that upon a holder of this Warrant providing
the Issuer with sixty-one (61) days notice  (pursuant to Section 13 hereof) (the
"Waiver  Notice")  that such Holder  would like to waive this  Section 7(a) with
regard to any or all  shares of Common  Stock  issuable  upon  exercise  of this
Warrant, this Section 7(a) will be of no force or effect with regard to all or a
portion of the Warrant referenced in the Waiver Notice; provided,  further, that
this provision  shall be of no further force or effect during the sixty-one (61)
days immediately preceding the expiration of the term of this Warrant.

                  (b) The Holder may not exercise  the Warrant  hereunder to the
extent  such  exercise  would  result  in the  Holder  beneficially  owning  (as
determined  in  accordance  with Section 13(d) of the Exchange Act and the rules
thereunder)  in  excess of 9.9% of the then  issued  and  outstanding  shares of
Common Stock, including shares issuable upon exercise of the Warrant held by the
Holder after application of this Section; provided,  however, that upon a holder
of this  Warrant  providing  the Company  with a Waiver  Notice that such holder
would like to waive this Section 7(b) with regard to any or all shares of Common
Stock  issuable upon exercise of this Warrant,  this Section 7(b) shall be of no


                                       12
<PAGE>

force or effect with regard to those shares of Warrant  Stock  referenced in the
Waiver Notice;  provided,  further,  that this provision  shall be of no further
force or effect  during  the  sixty-one  (61)  days  immediately  preceding  the
expiration of the term of this Warrant.

         8.  Definitions.  For the purposes of this Warrant, the following terms
have the following meanings:

                  "Additional Shares of Common Stock" means all shares of Common
         Stock  issued by the Issuer  after the  Original  Issue  Date,  and all
         shares of Other Common, if any, issued by the Issuer after the Original
         Issue Date,  except:  (i)  securities  issued  (other than for cash) in
         connection  with  a  merger,   acquisition,   or  consolidation,   (ii)
         securities  issued  pursuant  to a bona fide firm  underwritten  public
         offering of the Issuer's  securities,  (iii) securities issued pursuant
         to the conversion or exercise of convertible or excercisable securities
         issued or outstanding on or prior to the date hereof or issued pursuant
         to the  Purchase  Agreement,  (iv) the Warrant  Stock,  (v)  securities
         issued in connection with strategic license  agreements so long as such
         issuances are not for the purpose of raising capital, (vi) Common Stock
         issued or options to purchase  Common Stock granted or issued  pursuant
         to the Issuer's stock option plans and employee stock purchase plans as
         they now exist,  (vii) any warrants  issued to the placement  agent for
         the transactions contemplated by the Purchase Agreement, and (viii) the
         payment of any dividend on the Series C Convertible  Preferred Stock of
         the Issuer.

                  "Articles   of   Incorporation"    means   the   Articles   of
         Incorporation  of the Issuer as in effect on the  Original  Issue Date,
         and as hereafter from time to time amended,  modified,  supplemented or
         restated in  accordance  with the terms hereof and thereof and pursuant
         to applicable law.

                  "Board" shall mean the Board of Directors of the Issuer.

                  "Capital  Stock"  means and  includes  (i) any and all shares,
         interests,  participations  or other  equivalents  of or  interests  in
         (however designated)  corporate stock,  including,  without limitation,
         shares of preferred or preference stock, (ii) all partnership interests
         (whether  general or  limited)  in any Person  which is a  partnership,
         (iii) all membership  interests or limited  liability company interests
         in any  limited  liability  company,  and (iv) all equity or  ownership
         interests in any Person of any other type.

                  "Common  Stock"  means the Common  Stock,  par value $.001 per
         share,  of the Issuer and any other Capital Stock into which such stock
         may hereafter be changed.

                  "Common Stock  Equivalent"  means any Convertible  Security or
         warrant,  option  or  other  right to  subscribe  for or  purchase  any
         Additional Shares of Common Stock or any Convertible Security.

                  "Convertible  Securities"  means  evidences  of  Indebtedness,
         shares of Capital Stock or other  Securities which are or may be at any
         time convertible  into or exchangeable for Additional  Shares of Common
         Stock.  The term  "Convertible  Security"  means one of the Convertible
         Securities.


                                       13
<PAGE>


                  "Governmental Authority" means any governmental, regulatory or
         self-regulatory   entity,   department,   body,  official,   authority,
         commission, board, agency or instrumentality, whether federal, state or
         local, and whether domestic or foreign.

                  "Holders" mean the Persons who shall from time to time own any
         Warrant. The term "Holder" means one of the Holders.

                  "Independent Appraiser" means a nationally recognized or major
         regional  investment  banking  firm or firm  of  independent  certified
         public  accountants of recognized  standing (which may be the firm that
         regularly  examines  the  financial  statements  of the Issuer) that is
         regularly  engaged in the business of  appraising  the Capital Stock or
         assets of corporations  or other entities as going concerns,  and which
         is not affiliated with either the Issuer or the Holder of any Warrant.

                  "Issuer" means AXM Pharma, Inc., a Nevada corporation, and its
         successors.

                  "Majority  Holders"  means at any time the Holders of Warrants
         exercisable  for a majority  of the shares of  Warrant  Stock  issuable
         under the Warrants at the time outstanding.

                  "Original Issue Date" means June __, 2004.

                  "OTC  Bulletin  Board" means the  over-the-counter  electronic
         bulletin board.

                  "Other  Common" means any other Capital Stock of the Issuer of
         any class which shall be  authorized at any time after the date of this
         Warrant  (other  than  Common  Stock) and which shall have the right to
         participate  in the  distribution  of earnings and assets of the Issuer
         without limitation as to amount.

                  "Outstanding  Common  Stock"  means,  at any given  time,  the
         aggregate amount of outstanding  shares of Common Stock,  assuming full
         exercise,  conversion  or  exchange  (as  applicable)  of all  options,
         warrants and other Securities which are convertible into or exercisable
         or  exchangeable  for, and any right to subscribe for, shares of Common
         Stock that are outstanding at such time.

                  "Person" means an individual,  corporation,  limited liability
         company,  partnership,   joint  stock  company,  trust,  unincorporated
         organization,  joint venture, Governmental Authority or other entity of
         whatever nature.

                  "Per Share Market Value" means on any particular  date (a) the
         average of the closing bid price per share of the Common  Stock on such
         date on the  American  Stock  Exchange or another  registered  national
         stock exchange on which the Common Stock is then listed, or if there is
         no such price on such date,  then the  average of the closing bid price
         on such exchange or quotation system on the date nearest preceding such
         date,  or (b) if the Common  Stock is not listed  then on the  American
         Stock Exchange or any registered  national stock exchange,  the closing
         bid price for a share of Common Stock in the  over-the-counter  market,


                                       14
<PAGE>

         as  reported by the OTC  Bulletin  Board or in the  National  Quotation
         Bureau Incorporated or similar organization or agency succeeding to its
         functions of  reporting  prices) at the close of business on such date,
         or (c) if the Common  Stock is not then  reported  by the OTC  Bulletin
         Board  or  the  National  Quotation  Bureau  Incorporated  (or  similar
         organization  or  agency  succeeding  to  its  functions  of  reporting
         prices),  then the average of the "Pink Sheet"  quotes for the relevant
         conversion period, as determined in good faith by the holder, or (d) if
         the Common Stock is not then publicly traded the fair market value of a
         share  of  Common  Stock  as  determined  by an  Independent  Appraiser
         selected in good faith by the Majority  Holders.  The  determination of
         fair market value by an Independent  Appraiser  shall be based upon the
         fair market value of the Issuer  determined on a going concern basis as
         between a willing  buyer and a willing  seller and taking into  account
         all relevant  factors  determinative  of value,  and shall be final and
         binding on all  parties.  In  determining  the fair market value of any
         shares  of  Common  Stock,  no  consideration  shall  be  given  to any
         restrictions on transfer of the Common Stock imposed by agreement or by
         federal or state securities laws, or to the existence or absence of, or
         any limitations on, voting rights.

                  "Purchase  Agreement" means the Securities  Purchase Agreement
         dated as of June 24,  2004 among the Issuer and the  investors  a party
         thereto.

                  "Securities"  means  any  debt  or  equity  securities  of the
         Issuer, whether now or hereafter authorized, any instrument convertible
         into or  exchangeable  for  Securities  or a Security,  and any option,
         warrant or other right to purchase or acquire any Security.  "Security"
         means one of the Securities.

                  "Securities Act" means the Securities Act of 1933, as amended,
         or any similar federal statute then in effect.

                  "Subsidiary"  means  any  corporation  at  least  50% of whose
         outstanding  Voting  Stock  shall  at the  time be  owned  directly  or
         indirectly by the Issuer or by one or more of its  Subsidiaries,  or by
         the Issuer and one or more of its Subsidiaries.

                  "Term" has the meaning specified in Section 1 hereof.

                  "Trading  Day"  means (a) a day on which the  Common  Stock is
         traded on the American  Stock  Exchange,  or (b) if the Common Stock is
         not listed on the American  Stock  Exchange,  a day on which the Common
         Stock is traded on any other registered national stock exchange, or (c)
         if the  Common  Stock is not  traded on any other  registered  national
         stock  exchange,  a day on which the Common  Stock is traded on the OTC
         Bulletin  Board,  or (d) if the  Common  Stock is not traded on the OTC
         Bulletin  Board,  a day on which  the  Common  Stock is  quoted  in the
         over-the-counter  market as reported by the National  Quotation  Bureau
         Incorporated  (or any similar  organization  or agency  succeeding  its
         functions of reporting prices);  provided,  however,  that in the event
         that the Common  Stock is not listed or quoted as set forth in (a), (b)
         or (c) hereof,  then  Trading  Day shall mean any day except  Saturday,
         Sunday  and any day which  shall be a legal  holiday  or a day on which
         banking  institutions  in the  State  of New  York  are  authorized  or
         required by law or other government action to close.


                                       15
<PAGE>


                  "Voting  Stock" means,  as applied to the Capital Stock of any
         corporation, Capital Stock of any class or classes (however designated)
         having  ordinary  voting  power for the  election  of a majority of the
         members of the Board of  Directors  (or other  governing  body) of such
         corporation,  other than Capital Stock having such power only by reason
         of the happening of a contingency.

                  "Warrants"  means the Warrants issued and sold pursuant to the
         Purchase Agreement,  including,  without limitation,  this Warrant, and
         any other warrants of like tenor issued in substitution or exchange for
         any thereof  pursuant to the  provisions of Section 2(c),  2(d) or 2(e)
         hereof or of any of such other Warrants.

                  "Warrant  Price"  initially  means U.S. $5.50, as such Warrant
         Price  may be  adjusted  from  time to time as  shall  result  from the
         adjustments specified in this Warrant, including Section 4 hereto.

                  "Warrant Share Number" means at any time the aggregate  number
         of shares of Warrant  Stock  which may at such time be  purchased  upon
         exercise of this Warrant,  after giving effect to all prior adjustments
         and  increases  to such  number  made or  required to be made under the
         terms hereof.

                  "Warrant  Stock" means Common Stock  issuable upon exercise of
         any Warrant or Warrants or otherwise  issuable  pursuant to any Warrant
         or Warrants.

         10. Other Notices. In case at any time:

                           (A)      the Issuer shall make any  distributions  to
                                    the holders of Common Stock; or

                           (B)      the Issuer shall  authorize  the granting to
                                    all holders of its Common Stock of rights to
                                    subscribe  for or  purchase  any  shares  of
                                    Capital  Stock of any class or other rights;
                                    or

                           (C)      there shall be any  reclassification  of the
                                    Capital Stock of the Issuer; or

                           (D)      there shall be any capital reorganization by
                                    the Issuer; or

                           (E)      there  shall  be any  (i)  consolidation  or
                                    merger  involving  the  Issuer or (ii) sale,
                                    transfer  or  other  disposition  of  all or
                                    substantially all of the Issuer's  property,
                                    assets or business (except a merger or other
                                    reorganization  in which the Issuer shall be
                                    the surviving  corporation and its shares of
                                    Capital   Stock   shall   continue   to   be
                                    outstanding   and  unchanged  and  except  a
                                    consolidation,  merger,  sale,  transfer  or
                                    other  disposition  involving a wholly-owned
                                    Subsidiary); or


                                       16
<PAGE>


                           (F)      there  shall be a voluntary  or  involuntary
                                    dissolution,  liquidation  or  winding-up of
                                    the Issuer or any partial liquidation of the
                                    Issuer or  distribution to holders of Common
                                    Stock;

then, in each of such cases,  the Issuer shall give written notice to the Holder
of the date on which (i) the books of the Issuer  shall close or a record  shall
be taken for such dividend,  distribution  or  subscription  rights or (ii) such
reorganization,    reclassification,    consolidation,    merger,   disposition,
dissolution,  liquidation or  winding-up,  as the case may be, shall take place.
Such notice also shall  specify the date as of which the holders of Common Stock
of record shall  participate  in such  dividend,  distribution  or  subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities   or   other   property   deliverable   upon   such   reorganization,
reclassification,  consolidation, merger, disposition,  dissolution, liquidation
or  winding-up,  as the case may be. Such notice  shall be given at least twenty
(20) days prior to the record date or effective date for the event  specified in
such notice.

         11.  Amendment and Waiver.  Any term, covenant, agreement  or condition
in this Warrant may be amended,  or compliance  therewith may be waived  (either
generally   or  in  a   particular   instance   and  either   retroactively   or
prospectively),  by a written instrument or written instruments  executed by the
Issuer and the Majority Holders;  provided,  however,  that no such amendment or
waiver  shall  reduce the Warrant  Share  Number,  increase  the Warrant  Price,
shorten the period  during  which this  Warrant may be  exercised  or modify any
provision of this Section 11 without the consent of the Holder of this Warrant.

         12.  Governing  Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW  YORK,  WITHOUT  GIVING  EFFECT TO
PRINCIPLES OF CONFLICTS OF LAW.

         13. Notices.  Any and all notices or other communications or deliveries
required or permitted to be provided  hereunder shall be in writing and shall be
deemed given and  effective on the earlier of (i) the date of  transmission,  if
such  notice or  communication  is  delivered  via  facsimile  at the  facsimile
telephone  number  specified  for notice prior to 5:00 p.m.,  eastern time, on a
Trading Day, (ii) the Trading Day after the date of transmission, if such notice
or  communication  is delivered via facsimile at the facsimile  telephone number
specified for notice later than 5:00 p.m., eastern time, on any date and earlier
than 11:59 p.m., eastern time, on such date, (iii) the Trading Day following the
date  of  mailing,  if sent  by  overnight  delivery  by  nationally  recognized
overnight  courier  service  or (iv)  actual  receipt  by the party to whom such
notice is required to be given. The addresses for such  communications  shall be
with respect to the Holder of this Warrant or of Warrant  Stock issued  pursuant
hereto,  addressed to such Holder at its last known address or facsimile  number
appearing  on the books of the  Issuer  maintained  for such  purposes,  or with
respect to the Issuer, addressed to:







                                       17
<PAGE>


                                    AXM Pharma, Inc.
                                    3960 Howard Hughes Parkway
                                    Suite 500
                                    Las Vegas, Nevada 89109
                                    Attention:  Chet Howard, CFO
                                    Telecopier:  (702) 990-3501
                                    Telephone:  (702) 990-3659

Copies  of  notices  to the  Issuer  shall  be sent to Law  Offices  of Louis E.
Taubman,  P.C., 225 Broadway,  Suite 1200, New York, New York 10007,  Attention:
Louis E. Taubman, Esq., Telecopier:  (212) 202-6380,  Telephone: (212) 732-7184.
Copies of  notices to the Holder  shall be sent to  Jenkens &  Gilchrist  Parker
Chapin  LLP,  405  Lexington  Avenue,  New  York,  New  York  10174,  Attention:
Christopher S. Auguste, Telecopier:  (212) 704-6288,  Telephone: (212) 704-6000.
Any party  hereto may from time to time change its address for notices by giving
at least ten (10) days written notice of such changed address to the other party
hereto.  Copies sent to counsel shall not constitute notice for purposes of this
Agreement.

         14. Warrant Agent.  The Issuer may, by written notice to each Holder of
this  Warrant,  appoint an agent for the  purpose  of issuing  shares of Warrant
Stock on the exercise of this Warrant  pursuant to  subsection  (b) of Section 2
hereof,  exchanging this Warrant  pursuant to subsection (d) of Section 2 hereof
or replacing this Warrant pursuant to subsection (d) of Section 3 hereof, or any
of the foregoing, and thereafter any such issuance,  exchange or replacement, as
the case may be, shall be made at such office by such agent.

         15.  Remedies.  The Issuer  stipulates  that the remedies at law of the
Holder of this Warrant in the event of any default or threatened  default by the
Issuer in the performance of or compliance with any of the terms of this Warrant
are not and will not be adequate and that,  to the fullest  extent  permitted by
law,  such  terms may be  specifically  enforced  by a decree  for the  specific
performance  of any agreement  contained  herein or by an  injunction  against a
violation of any of the terms hereof or otherwise.

         16.  Successors  and  Assigns.  This  Warrant and the rights  evidenced
hereby  shall inure to the  benefit of and be binding  upon the  successors  and
assigns of the Issuer, the Holder hereof and (to the extent provided herein) the
Holders of Warrant Stock issued pursuant hereto, and shall be enforceable by any
such Holder or Holder of Warrant Stock.

         17.  Modification and Severability.  If, in any action before any court
or agency  legally  empowered to enforce any  provision  contained  herein,  any
provision  hereof is found to be  unenforceable,  then such  provision  shall be
deemed modified to the extent  necessary to make it enforceable by such court or
agency.  If any such provision is not  enforceable as set forth in the preceding
sentence,  the  unenforceability  of such  provision  shall not affect the other
provisions  of this  Warrant,  but this  Warrant  shall be  construed as if such
unenforceable provision had never been contained herein.

         18.  Headings.  The  headings of the  Sections of this  Warrant are for
convenience of reference  only and shall not, for any purpose,  be deemed a part
of this Warrant.


                                       18
<PAGE>



         IN WITNESS WHEREOF,  the Issuer has executed this Warrant as of the day
and year first above written.


                                     AXM PHARMA, INC.


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






















                                       19
<PAGE>



                                  EXERCISE FORM

                                AXM PHARMA, INC.

The  undersigned  _______________,  pursuant  to the  provisions  of the  within
Warrant,  hereby elects to purchase  _____ shares of Common Stock of AXM Pharma,
Inc. covered by the within Warrant.

Dated: _________________            Signature    ___________________________

                                    Address      ___________________________

                                                 ___________________________

Number of shares of Common Stock beneficially owned or deemed beneficially owned
by the Holder on the date of Exercise: _________________________


                                   ASSIGNMENT

FOR VALUE RECEIVED,  _________________  hereby sells, assigns and transfers unto
__________________  the within Warrant and all rights evidenced thereby and does
irrevocably constitute and appoint _____________, attorney, to transfer the said
Warrant on the books of the within named corporation.

Dated: _________________            Signature    ___________________________

                                    Address      ___________________________

                                                 ___________________________

                               PARTIAL ASSIGNMENT

FOR VALUE RECEIVED,  _________________  hereby sells, assigns and transfers unto
__________________  the right to  purchase  _________  shares of  Warrant  Stock
evidenced  by the within  Warrant  together  with all rights  therein,  and does
irrevocably  constitute and appoint  ___________________,  attorney, to transfer
that part of the said Warrant on the books of the within named corporation.

Dated: _________________            Signature    ___________________________

                                    Address      ___________________________

                                                 ___________________________

                           FOR USE BY THE ISSUER ONLY:





                                       20
<PAGE>


This Warrant No. W-___ canceled (or  transferred or exchanged) this _____ day of
___________,  _____,  shares  of Common  Stock  issued  therefor  in the name of
_______________,  Warrant No.  W-_____ issued for ____ shares of Common Stock in
the name of _______________.































                                       21