REGISTRATION RIGHTS AGREEMENT

         This  Registration  Rights  Agreement (the  "Agreement")  is made as of
December 30, 2003, by and between AXM Pharma,  Inc., a Nevada  corporation  (the
"Company"), and those persons whose names appear on Schedule A, as such Schedule
A is amended from time to time (collectively, the "Investors").

                                   WITNESSETH:
                                   ----------

         WHEREAS,  the Company has entered into a Securities Purchase Agreement,
dated December 30, 2003, with each of the Investors (the "Purchase  Agreement"),
pursuant to which each  Investor has agreed to purchase  shares of the Company's
Series B Preferred Sock ("Shares") and warrants to purchase the Company's Common
Stock (defined below) for $3.00 per share,  subject to adjustment  ("Warrants"),
as set forth in the Purchase Agreement; and

         WHEREAS,  as a  condition  to  the  consummation  of  the  transactions
contemplated by the Purchase Agreement,  the Company has agreed to grant certain
registration  rights to the Investors on the terms and  conditions  set forth in
this Agreement.

         NOW, THEREFORE,  in consideration of the premises and mutual agreements
contained herein, the parties hereto agree as follows:

         1.  Definitions.  The following terms used in this Agreement shall have
the meanings set forth below:

                   1.1 "Commission" means the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.

                   1.2  "Common  Stock" shall mean the common  stock,  par value
$.001  per  share,   of  the   Company,   or  in  the  case  of  a   conversion,
reclassification  or exchange (or any other  adjustment  or  readjustment  under
Section 5 of the Warrants) of such shares such Common Stock, shares of the stock
issued or issuable in respect of such shares of Common Stock, and all provisions
of this  Agreement  shall be  applied  appropriately  thereto  and to any  stock
resulting therefrom.

                  1.3 "Exchange Act" means the Securities  Exchange Act of 1934,
as amended, or any similar federal statute enacted hereafter,  and the rules and
regulations  of the  Commission  thereunder,  all as the same shall be in effect
from time to time.

                  1.4 "Form SB-2" means such form under the Securities Act as in
effect on the date  hereof or any  registration  form under the  Securities  Act
subsequently  adopted by the Commission which permits inclusion or incorporation
of substantial  information by reference to other documents filed by the Company
with the Commission.


<PAGE>


                  1.5 "Other  Stockholders"  means any other stockholders of the
Company (including any other investors) who are granted registration rights that
would affect the rights granted to the Investors under this Agreement.

                  1.6 "Person"  shall mean any  individual,  firm,  corporation,
partnership,  limited liability company,  trust,  incorporated or unincorporated
association,  joint venture,  joint stock  company,  government (or an agency or
political subdivision thereof) or other entity of any kind.

                  1.7 "Register," "Registered" and "Registration" shall refer to
a  registration  effected by preparing  and filing a  registration  statement in
compliance   with  the  Securities  Act  and  the  declaration  or  ordering  of
effectiveness of such registration statement by the Commission.

                  1.8 "Registrable  Securities" means the shares of Common Stock
issuable upon the conversion of the Series B Preferred Stock and/or the exercise
of the Warrants purchased pursuant to the Purchase Agreement.

                  1.9 "Registration Expenses" means all expenses incurred by the
Company in  compliance  with  Section 3 of this  Agreement,  including,  without
limitation,  all registration and filing fees, listing fees,  printing expenses,
fees and disbursements of counsel and accountants for the Company, blue sky fees
and expenses,  the expenses of any special audits incident to or required by any
such  registration  and the expense of any "comfort  letters" (but excluding the
compensation  of regular  employees of the  Company,  which shall be paid in any
event by the Company).

                  1.10  "Securities  Act" means the  Securities  Act of 1933, as
amended,  or any similar federal statute  enacted  hereafter,  and the rules and
regulations  of the  Commission  thereunder,  all as the same shall be in effect
from time to time.

                  1.11  "Selling  Expenses"  means all  selling  commissions  or
underwriter's discounts applicable to the sale of Registrable Securities.

         2. Registration.  The Company will file, six months of the date of this
Agreement (the "Filing  Date"),  a registration  statement on Form SB-2 (or such
other form as is appropriate)  registering the offer and sale of the Registrable
Securities  by the holders  thereof and  containing  the "Plan of  Distribution"
attached hereto as Schedule B.


<PAGE>


         3. Expenses of  Registration.  All  Registration  Expenses  incurred in
connection with any registration,  qualification or compliance  pursuant to this
Agreement will be borne by the Company,  and all Selling  Expenses will be borne
by the Investors.

         4. Registration Procedures.

                  4.1 With respect to the  registration  effected by the Company
pursuant  to  this  Agreement,  the  Company  will  confirm  initiation  of  the
registration  by giving written  notice of initiation and completion  thereof to
all of the Investors and will, at its expense:

                           (a)  Keep  the  registration  statement  continuously
effective for a period of 24 months or until all of the  Registrable  Securities
are freely tradable under the Securities Act, whichever occurs first;  provided,
however, that the Company will keep such registration  effective for longer than
24 months if the costs and expenses  associated with such extended  registration
are borne by the selling Investors; and provided further that in the case of any
registration  of  Registrable  Securities  on Form SB-2 which are intended to be
offered on a continuous or delayed  basis,  such 24-month  period shall,  at the
cost  and  expense  of the  Company,  be  extended,  if  necessary,  to keep the
registration statement effective until all such Registrable Securities are sold,
provided that Rule 415, or any successor rule under the Securities Act,  permits
an offering on a  continuous  or delayed  basis,  and  provided,  further,  that
applicable  rules  and  regulations  under  the  Securities  Act  governing  the
obligation  to file a  post-effective  amendment  permit,  in lieu of  filing  a
post-effective  amendment which (y) includes any prospectus  required by Section
10(a)(3) of the Securities  Act or (z) reflects  facts or events  representing a
material or fundamental  change in the information set forth in the registration
statement,  the incorporation by reference of information  otherwise required to
be included in such post-effective  amendment covered by (y) and (z) above to be
contained  in  periodic  reports  filed  pursuant  to Section 13 or 15(d) of the
Exchange Act in the registration statement;

                           (b)  Prepare  and  file  with  the  Commission   such
amendments  and  supplements to such  registration  statement and the prospectus
used in  connection  with such  registration  statement  as may be  necessary to
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement;

                           (c) Furnish such number of prospectuses and other
documents  incident  thereto,  including  any  amendment of or supplement to the
prospectus, as an Investor from time to time may reasonably request;

                           (d)  Notify  each  seller of  Registrable  Securities
covered by the  registration  statement at any time when a  prospectus  relating
thereto is required to be delivered under the Securities Act of the happening of
any event as a result  of which  the  prospectus  included  in the  registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material  fact  required to be stated  therein or  necessary to
make the  statements  therein not  misleading  or incomplete in the light of the
circumstances then existing,  and at the request of any such seller, prepare and
furnish to such seller a reasonable  number of copies of a  supplement  to or an
amendment  of  such  prospectus  as may be  necessary  so  that,  as  thereafter
delivered to the purchasers of such shares, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to


<PAGE>

be stated therein or necessary to make the statements  therein not misleading or
incomplete in the light of the circumstances then existing;

                           (e) List all such Registrable  Securities  registered
in the registration on each securities exchange or automated quotation system on
which the Common Stock of the Company is then listed;

                           (f) Provide a transfer  agent and  registrar  for all
Registrable  Securities and a CUSIP number for all such Registrable  Securities,
not later than the effective date of the registration;

                           (g) Make available for inspection by any Investor and
any attorney or  accountant  retained by any such  Investor,  all  financial and
other records,  pertinent corporate documents and properties of the Company, and
cause the Company's officers and directors to supply all information  reasonably
requested by any such  Investor,  attorney or accountant in connection  with the
registration statement;

                           (h) Furnish to each selling  Investor  upon request a
signed counterpart, addressed to each such selling Investor, of

                                    (i) an opinion of counsel  for the  Company,
                           dated  the   effective   date  of  the   registration
                           statement  in  form  reasonably  acceptable  to  such
                           Investor and its counsel, and

                                    (ii)   "comfort"   letters   signed  by  the
                           Company's  independent  public  accountants  who have
                           examined  and  reported  on the  Company's  financial
                           statements included in the registration statement, to
                           the extent permitted by the standards of the American
                           Institute of Certified Public  Accountants,  covering
                           such matters as are  customarily  covered in opinions
                           of  issuer's  counsel  and   accountants'   "comfort"
                           letters  delivered to  underwriters  in  underwritten
                           public offerings of securities;

                           (i) Furnish to each selling  Investor  upon request a
copy  of  all  documents  filed  with  and  all  correspondence  from  or to the
Commission in connection with the offering; and

                           (j) Make  available to its  stockholders,  as soon as
reasonably practicable, an earnings statement covering the period of at least 12
months,  but not more than 18 months,  beginning  with the first month after the
effective date of the  registration  statement,  which earnings  statement shall
satisfy the provisions of Section 11(a) of the Securities Act.

                  4.2 It shall be a condition  precedent to the  obligations  of
the  Company to take any action  pursuant  to this  Agreement  in respect of the
Registrable  Securities of any Investor that such Investor  shall furnish to the
Company such information regarding itself and the Registrable Securities held by
it as  the  Company  shall  reasonably  request  and as  shall  be  required  in
connection with the action to be taken by the Company.


<PAGE>


                  4.3 In  connection  with the  preparation  and  filing  of the
registration statement under this Agreement, the Company will give the Investors
on whose  behalf such  Registrable  Securities  are to be  registered  and their
respective  counsel and  accountants the opportunity to review and make comments
to the registration  statement,  each prospectus  included therein or filed with
the Commission,  and each amendment thereof or supplement thereto, and will give
each such  Investor  such  access to the  Company's  books and  records and such
opportunities  to discuss the  business of the Company  with its  officers,  its
counsel and the independent  public accountants who have certified the Company's
financial statements, as shall be necessary, in the opinion of such Investors or
their  counsel,  in order to conduct a  reasonable  and  diligent  investigation
within the meaning of the Securities Act.


         5.       Indemnification.

                  5.1 To the extent permitted by law, the Company will indemnify
and hold harmless each Investor,  each of its officers,  directors and partners,
and each Person, if any, controlling such Investor,  against all losses, claims,
damages and  liabilities  (or actions,  proceedings  or  settlements  in respect
thereof),  joint  or  several,  to which  they  may  become  subject  under  the
Securities  Act or  otherwise,  insofar  as such  losses,  claims,  damages,  or
liabilities  (or actions,  proceedings or settlements in respect  thereof) arise
out of or are based upon any untrue  statement or alleged untrue  statement,  or
any  misstatement of a material fact or alleged  misstatement of a material fact
contained in the  registration  statement,  including any  prospectus,  offering
circular or other  document,  notification  or the like,  or any  amendments  or
supplements  thereto, or arise out of or are based upon the omissions or alleged
omission  to state  therein a material  fact  required  to be stated  therein or
necessary to make the statements therein not misleading, or any violation by the
Company of the Securities Act or any rule or regulation thereunder applicable to
the  Company  and  relating  to action or  inaction  required  of the Company in
connection  with  the  registration,   qualification  or  compliance;  and  will
reimburse each such Investor, each of its officers,  directors and partners, and
each Person, if any, controlling such Investor,  for any legal or other expenses
reasonably  incurred and as incurred by them in connection with investigating or
defending  or  settling  any such loss,  claim,  damage,  liability,  or action;
provided, however, that the Company shall not be liable in any such case for any
such loss, claim, damage,  liability, or action to the extent that it arises out
of or is based upon an untrue  statement or alleged untrue statement or omission
or alleged  omission or  misstatement or alleged  misstatement  made in reliance
upon and based upon written  information  furnished to the Company expressly for
use in connection  with such  registration  by any such Investor or  controlling
Person.

                  5.2 To the extent  permitted by law, each  Investor  severally
but not jointly  will,  if  Registrable  Securities  held by such  Investor  are
included  in the  securities  as to which  the  registration,  qualification  or
compliance is being effected,  indemnify and hold harmless the Company,  each of
its  directors  and officers who have signed the  registration  statement,  each
Person, if any, who controls the Company (other than such Investor),  each other
such  Investor and each of their  officers,  directors  and  partners,  and each
Person  controlling  such  Investor  or other  stockholder,  against all losses,
claims,  damages and  liabilities  (or actions,  proceedings  or  settlements in
respect thereof) to which the Company or any such director, officer, controlling


<PAGE>

Person,  agent or  attorney  may become  subject,  under the  Securities  Act or
otherwise,  insofar as such losses, claims, damages, or liabilities (or actions,
proceedings or  settlements  in respect  thereof) arise out of or are based upon
any untrue  statement or alleged untrue  statement or misstatement of a material
fact or alleged  misstatement  of a material fact contained in the  registration
statement, including any prospectus or any amendments or supplements thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a  material  fact  required  to be  stated  therein  or  necessary  to make  the
statements  therein not misleading,  in each case to the extent, but only to the
extent,  that such untrue  statement or alleged untrue  statement or omission or
alleged  omission  or  misstatement  or  alleged  misstatement  was made in such
registration  statement,  prospectus,  or amendments or supplements  thereto, in
reliance upon and in conformity  with written  information  with respect to such
Investor  furnished by such Investor  expressly for use in connection  with such
registration;  and each such Investor will reimburse any legal or other expenses
reasonably  incurred by the Company,  each of its directors  and officers,  each
other  Investor  and each of their  officers,  directors  and  partners and each
Person controlling such other Investor or other stockholder for any legal or any
other expenses reasonably incurred in connection with investigating or defending
any such loss,  claim,  damage,  liability,  or action, in each case only to the
extent that such untrue  statement  or alleged  untrue  statement or omission or
alleged omission is made in the  registration  statement,  prospectus,  offering
circular or other  document  in reliance  upon and in  conformity  with  written
information  furnished  to  the  Company  by  such  Investor  and  stated  to be
specifically for use therein. Notwithstanding anything to the contrary contained
herein,  no Investor  shall be liable  under this  Section 5.2 for any amount in
excess  of the  net  proceeds  to  such  Investor  as a  result  of the  sale of
Registrable Securities pursuant to such registration statement.

                  5.3 Promptly after receipt by an indemnified  party under this
paragraph of notice of the commencement of any action,  such  indemnified  party
will, if a claim in respect thereof is to be made against any indemnifying party
under  this  paragraph,   notify  the  indemnifying  party  in  writing  of  the
commencement  thereof  and the  indemnifying  party  shall  have  the  right  to
participate in, and, to the extent the  indemnifying  party so desires,  jointly
with any other  indemnifying  party similarly given notice to assume the defense
thereof with counsel mutually  satisfactory to the parties;  provided,  however,
that if the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably concluded
that there may be reasonable  defenses  available to it which are different from
or additional to those available to the indemnifying  party, or if the interests
of the indemnified party may reasonably be deemed to conflict with the interests
of the indemnifying  party, the indemnified party shall have the right to select
a separate counsel and to assume such legal defense and otherwise to participate
in the  defense  of such  action,  with the  expense  and fees of such  separate
counsel and other expenses  relating to such  participation  to be reimbursed by
the indemnifying party as incurred.  The failure to notify an indemnifying party
promptly of the  commencement of any such action,  if prejudicial to his ability
to defend such action, shall not relieve such indemnifying party of liability to
the indemnified party under this paragraph,  but such liability shall be reduced
in accordance with the extent of such prejudice.

         6.  Information  by the  Investor.  Each Investor  holding  Registrable
Securities to be included in the  registration  will furnish to the Company such
information  regarding  such  Investor  and the  distribution  proposed  by such


<PAGE>

Investor  as  the  Company  may  reasonably  request  in  writing  and as may be
reasonably  required by  applicable  law in  connection  with any  registration,
qualification or compliance referred to in this Agreement.

         7. Transfer or Assignment.  The rights to cause the Company to register
securities  granted by the  Company  under this  Agreement  may be  assigned  or
otherwise  transferred  by any Investor or by any  subsequent  transferee of any
such rights without the written consent of the Company.

         8. No Conflict of Rights. The Company will not hereafter enter into any
agreement with respect to its securities  which is inconsistent  with the rights
granted to the Investors in this Agreement.  Without  limiting the generality of
the  foregoing,  the Company will not hereafter  enter into any  agreement  with
respect to its securities  which grants or modifies any existing  agreement with
respect to its securities to grant to any holder of its securities in connection
with an incidental  registration of such securities  equal or higher priority to
the rights granted to the Investors in this Agreement.

         9. Exchange Act  Compliance.  So long as the Company remains subject to
the  reporting  requirements  of the Exchange  Act,  the Company  shall file the
reports required to be filed by it under the Securities Act and the Exchange Act
and the rules and  regulations  adopted by the Commission  thereunder,  and will
take  all  actions  reasonably   necessary  to  enable  holders  of  Registrable
Securities to sell such securities without registration under the Securities Act
within the  limitation of the  provisions  of (a) Rule 144 under the  Securities
Act,  as such Rule may be  amended  from time to time,  (b) Rule 144A  under the
Securities  Act, as such Rule may be amended from time to time, if applicable or
(c) any similar rules or regulations  hereunder adopted by the Commission.  Upon
the request of any Investor  holding  Registrable  Securities,  the Company will
deliver to such Investor a written  statement as to whether it has complied with
such requirements.

         10. Miscellaneous.

                  10.1  Directly  or  Indirectly.  Where any  provision  in this
Agreement  refers to action to be taken by any  person,  or which such person is
prohibited from taking, such provision will be applicable whether such action is
taken directly or indirectly by such person.

                  10.2 Governing Law. This Agreement will be deemed to have been
made and  delivered  in New York,  New York and will be governed as to validity,
interpretation,  construction, effect and all other respects by internal laws of
the State of New York.  The  Company  and  Investor  agree that any legal  suit,
action or  proceeding  arising  out of or relating  to this  Agreement  shall be
instituted  exclusively before the United States District Court for the Southern
District of New York or the courts of the State of New York  located in New York
County.

                  10.3  Section  Headings.  The  headings  of the  sections  and
subsections of this Agreement are inserted for  convenience  only and may not be
deemed to constitute a part thereof.


<PAGE>


                  10.4  Notices.  All  communications  and  notices  under  this
Agreement  must be in  writing  and  delivered  by hand or mailed  by  overnight
courier that can provide receipt of delivery or by registered or certified mail,
postage prepaid:



If to the Company:                  AXM Pharma, Inc.
                                    4695 Macarthur Court, 11th Floor
                                    Newport Beach, California  92660
                                    Attention:  Peter Cunningham, President
                                    Telecopier:  (949) 798-5501
                                    Telephone:  (949) 798-5587

with copies (which copies
shall not constitute notice
to the Company) 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


If to any Investor:                 To the address set forth in the Purchase
                                    Agreement


                  10.5   Successors and Assigns. This Agreement  will  inure  to
the  benefit of and be binding  upon the  successors  and assigns of each of the
parties.

                  10.6   Entire Agreement; Amendment and Waiver.  This Agreement
constitutes  the entire  understanding  of the  parties  hereto  relating to the
subject matter hereof and supersedes all prior agreements or understandings with
respect to the subject matter hereof among such parties.

                  10.7   Counterparts;  Fax Execution.  This  Agreement  may  be
executed in one or more  counterparts,  each of which will be deemed an original
and all of which  together will be considered one and the same  agreement.  This
Agreement  may be executed by fax  delivery  of a signed  signature  page to the
other parties and such fax execution will be effective for all purposes.

                  10.8   Severability. Any provision of this Agreement which  is
determined to be illegal, prohibited or unenforceable in any jurisdiction shall,
as to such  jurisdiction,  be  ineffective  to the  extent  of such  illegality,
prohibition or unenforceability  without  invalidating the remaining  provisions
hereof which shall be severable and enforceable according to their terms and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.


<PAGE>




                            [SIGNATURE PAGE FOLLOWS]


         EXECUTED:

                         AXM PHARMA, INC.



                         By:____________________________
                             Name: Peter Cunningham
                                Title: President


                         BANYAN ASIA LIMITED

                              By:    BANYAN FUND MANAGEMENT, LLC,
                                     its  General Partner



                              By: _____________________________
                                         S.P. Wijegoonaratna,
                                         Managing Member


                         BANYAN MAC 24, LTD.

                              By:    BANYAN FUND MANAGEMENT, LLC,
                                     its  General Partner



                              By: _____________________________
                                         S.P. Wijegoonaratna,
                                         Managing Member


<PAGE>


                                   SCHEDULE A
                                LIST OF INVESTORS


Banyan Asia Limited
780 Third Avenue, 44th Floor
New York, NY 10017
Attn: Stephen J. Lemanski

Banyan Mac 24, Ltd.
780 Third Avenue, 44th Floor
New York, NY 10017
Attn: Stephen J. Lemanski















<PAGE>


                                   SCHEDULE B
                              PLAN OF DISTRIBUTION

         We are  registering the shares of common stock on behalf of the selling
stockholders. The shares of common stock may be sold in one or more transactions
at fixed  prices,  at  prevailing  market  prices at the time of sale, at prices
related to the  prevailing  market prices,  at varying prices  determined at the
time of sale,  or at negotiated  prices.  These sales may be effected at various
times  in one or  more of the  following  transactions,  or in  other  kinds  of
transactions:

o        transactions on any national securities  exchange or U.S.  inter-dealer
         system of a registered  national  securities  association  on which the
         common stock may be listed or quoted at the time of sale;

o        in the over-the-counter market;

o        in  private  transactions  and  transactions  otherwise  than on  these
         exchanges or systems or in the over-the-counter market;

o        in connection with short sales of the shares;

o        by pledge to secure or in payment of debt and other obligations;

o        through the  writing of  options,  whether the options are listed on an
         options exchange or otherwise;

o        in connection with the writing of non-traded and  exchange-traded  call
         options,  in hedge transactions and in settlement of other transactions
         in standardized or over-the-counter options; or

o        through a combination of any of the above transactions.

         Each selling stockholder and its successors, including its transferees,
pledgees or donees or their  successors,  may sell the common stock  directly to
the purchaser or through underwriters, broker-dealers or agents, who may receive
compensation  in the form of  discounts,  concessions  or  commissions  from the
selling   stockholder  or  the  purchaser.   These  discounts,   concessions  or
commissions as to any particular  underwriter,  broker-dealer or agent may be in
excess of those customary in the types of transactions involved.

         In addition,  any securities  covered by this prospectus  which qualify
for sale pursuant to Rule 144 of the  Securities  Act may be sold under Rule 144
rather than pursuant to this prospectus.

         We entered into a registration  rights agreement for the benefit of the
selling  stockholders to register the common stock under applicable  federal and
state  securities  laws.  The   registration   rights  agreement   provides  for
cross-indemnification  of the  selling  stockholders  and us and our  respective


<PAGE>

directors,  officers and  controlling  persons against  specific  liabilities in
connection  with the offer and sale of the common stock,  including  liabilities
under the Securities Act. We will pay substantially all of the expenses incurred
by the selling  stockholders  incident to the  registration  of the offering and
sale of the common stock.