Exhibit 4.2


 


THE
SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR INVESTMENT AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THESE SECURITIES MAY NOT BE
SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER THE SECURITIES ACT OR UNDER STATE SECURITIES LAWS.  THIS WARRANT AND THE WARRANT SHARES ISSUABLE
UPON EXERCISE OF THIS WARRANT MAY NOT BE PLEDGED, SOLD, ASSIGNED,
TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO THE EXPRESS PROVISIONS
OF THIS WARRANT, AND NO SALE, ASSIGNMENT, TRANSFER, OR OTHER DISPOSITION OF
THIS WARRANT SHALL BE VALID OR EFFECTIVE UNLESS AND UNTIL SUCH PROVISIONS SHALL
HAVE BEEN COMPLIED WITH.


 


Date of Issuance:  October    ,
2005


 


ARIES VENTURES INC.


 


Common Stock Purchase Warrant


 


(Void after October     , 2008)


 


Aries Ventures Inc., a Nevada
corporation (the “Company”), for value received, hereby certifies and agrees
that                              
or its registered assigns (the “Registered Holder”), is entitled, subject to
the terms set forth below, to purchase from the Company, at any time or from
time to time on or after the date hereof (the “Date of Issuance”) and on or
before the third (3rd) anniversary of the Date of Issuance at not later than
5:00 p.m. New York time (such date and time, the “Expiration Time”),                                 (                 )
duly authorized, validly issued, fully paid and nonassessable shares of common
stock of the Company (the “Common Stock”) at an initial exercise price equal to
$1.75 per share, subject to adjustment in certain cases as described herein.
The shares purchasable upon exercise of this Warrant, and the purchase price
per share, are hereinafter referred to as the “Warrant Shares” and the “Exercise
Price,” respectively. The term “Warrant” as used herein shall include this
Warrant and any other warrants delivered in substitution or exchange therefor,
as provided herein.


 


This
Warrant is issued pursuant to Section 8.1 of that certain Subscription
Agreement of even date herewith by and among Cardium Therapeutics, Inc.
and certain investors set forth therein (the “Subscription Agreement”) that is
being executed and delivered in connection with that certain Confidential
Private Placement Memorandum of Cardium Therapeutics, Inc. dated July 1,
2005, as supplement by Supplement No. 1 dated September 29, 2005 (the
“Private Offering”).


 





















 


1.             Exercise.



 


(a)           This Warrant may be exercised by the Registered Holder, in whole or in
part, by surrendering this Warrant, with a Notice of Exercise in the form of Annex
A hereto (the “Notice of Exercise”) duly executed by such Registered Holder
or by such Registered Holder’s duly authorized attorney, at the principal
office of the Company set forth on the signature page hereto, or at such
other office or agency as the Company may designate in writing (the “Company’s
Office”), accompanied by payment in full, in lawful money of the United States,
of the Exercise Price payable in respect of the number of shares of Warrant
Shares purchased upon such exercise.


 


(b)           Each exercise of this Warrant shall be deemed to have been effected
immediately prior to the close of business on the day on which the Notice of
Exercise shall be dated and directed to the Company (as evidenced by the
applicable postmark or other evidence of transmittal) as provided in Section 1(a) hereof,
except
that, if such day is a date when the stock transfer books of the Company are
closed, such exercise shall be deemed to have been effected immediately prior
to the close of business on the next succeeding date on which the stock
transfer books are open. At such
time, the person or persons in whose name or names any certificates for Warrant
Shares shall be issuable upon such exercise as provided in Section 1(c) hereof
shall be deemed to have become the holder or holders of record of the Warrant
Shares represented by such certificates.


 


(c)           As soon as practicable after the exercise of this Warrant, in full or in
part, and in any event within ten (10) business days thereafter, the
Company, at its expense, will cause to be issued in the name of, and delivered
to, the Registered Holder, or as such Registered Holder (upon payment by such
Registered Holder of any applicable transfer taxes) may direct:


 


(i)            a certificate or certificates for the number of
full Warrant Shares to which such Registered Holder shall be entitled upon such
exercise plus, in lieu of any fractional share to which such Registered Holder
would otherwise be entitled, cash in an amount determined pursuant to Section 3
hereof; and


 


(ii)           in case such exercise is in part only, unless this Warrant has expired, a
new warrant or warrants (dated the date hereof) of like tenor, representing in
the aggregate on the face or faces thereof the number of Warrant Shares equal
(without giving effect to any adjustment therein) to the number of such shares
called for on the face of this Warrant minus the number of such shares
purchased by the Registered Holder upon such exercise as provided in Section 3
hereof.


 


(d)           Unless the Warrant
Shares have been registered under the Securities Act, upon exercise of all or a
portion of this Warrant and the issuance of any of the Warrant Shares, the
Company shall instruct its transfer agent, if any, to enter stop transfer
orders with respect to such shares, and all certificates representing shares of
Warrant Shares shall bear on the face thereof substantially the following
legend:


 


“THE SHARES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS


 


2





















 


AMENDED (THE “SECURITIES
ACT”), OR APPLICABLE STATE SECURITIES LAWS. SUCH SHARES MAY NOT BE
OFFERED, SOLD, ASSIGNED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS REGISTERED OR
QUALIFIED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, OR
PURSUANT TO AN EXEMPTION THEREFROM AND THE COMPANY RECEIVES AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY AND ITS LEGAL COUNSEL THAT SUCH SALE,
PLEDGE, ASSIGNMENT OR TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT.”


 


(e)           The issuance of any shares of Common Stock
pursuant to the terms of this Warrant shall at all times be subject to
compliance with applicable federal, state and foreign securities laws as then
in effect; provided, however, that any determination by the Company upon
receipt of a notice of exercise from the Registered Holder that the issuance of
such shares of Common Stock would not be in compliance with such laws, shall be
reasonable and made in good faith after consultation with Company’s legal
counsel and promptly communicated to the Registered Holder. The Company agrees
to cooperate with Registered Holder and legal counsel for Registered Holder to
attempt to resolve any such matters should they arise.


 


(f)            The
Warrant Shares are entitled to certain registration rights as contained in the
Subscription Agreement, the terms of which are hereby incorporated by this
reference, with the same force and effect as if specifically set forth herein.


 


2.             Shares to be Fully Paid; Reservation of Shares. The Company covenants and agrees that all shares
of Common Stock which may be issued upon the exercise of the rights represented
by this Warrant will, upon issuance by the Company, be validly issued, fully
paid and nonassessable, and free from preemptive rights and free from all
taxes, liens and charges with respect thereto. The Company further covenants
and agrees that, from and after the Date of Issuance and during the period
within which the rights represented by this Warrant may be exercised, the
Company will at all times have authorized, and reserve, free from preemptive
rights, out of its authorized but unissued shares of Common Stock, solely for
the purpose of effecting the exercise of this Warrant, a sufficient number of
shares of Common Stock to provide for the exercise of the rights represented by
this Warrant.


 


3.             Fractional Shares. The Company shall not be required upon the
exercise of this Warrant to issue any fractional shares, but shall make an
adjustment therefor in cash on the basis of the Market Value for each
fractional share of the Company’s Common Stock which would be issuable upon
exercise of this Warrant.  For purposes
hereof, the
Market Value per share of Common Stock shall be determined as follows:


 


(i)                                                             If the Common Stock is listed on a national
securities exchange, the Nasdaq National Market, the OTC Bulletin Board or
another nationally recognized trading system as of the Exercise Date, the
Market Value


 


3





















 


per
share of Common Stock shall be deemed to be the average of the high and low
reported sale prices per share of Common Stock thereon on the trading day
immediately preceding the Exercise Date (provided that if the Common
Stock is not so listed on such day, the Market Value per share of Common Stock
shall be determined pursuant to clause (ii)).


 


(ii)                                                          If
the Common Stock is not listed on a national securities exchange, the Nasdaq
National Market, the OTC Bulletin Board or another nationally recognized
trading system as of the Exercise Date, the Market Value per share of Common
Stock shall be deemed to be the amount most recently determined by the Board of
Directors of the Company or an authorized committee of the Board of Directors
of the Company (the “Board”) to represent the fair market value per share of
the Common Stock; and, upon request of the Registered Holder, the Board (or a
representative thereof) shall, as promptly as reasonably practicable but in any
event not later than 15 days after such request, notify the Registered Holder
of the Market Value per share of Common Stock. 
Notwithstanding the foregoing, if the Board has not made such a
determination within the three-month period prior to the Exercise Date, then (A) the
Board shall make, and shall provide or cause to be provided to the Registered
Holder notice of, a determination of the Market Value per share of the Common
Stock within 15 days of a request by the Registered Holder that it do so, and (B) the
exercise of this Warrant pursuant to this subsection (b)(ii) shall be
delayed until such determination is made and notice thereof is provided to the
Registered Holder.


 


4.             Restrictions on Transfer.


 


(a)           Warrant Register. The Company will maintain a register (the “Warrant Register”) containing
the names and addresses of the Registered Holder or Registered Holders. Any
Registered Holder of this Warrant or any portion thereof may change its address
as shown on the Warrant Register by written notice to the Company requesting
such change, and the Company shall promptly make such change. Until this
Warrant is transferred on the Warrant Register of the Company, the Company may
treat the Registered Holder as shown on the Warrant Register as the absolute
owner of this Warrant for all purposes, notwithstanding any notice to the
contrary, provided, however, that if and when this Warrant is properly assigned
in blank, the Company may, but shall not be obligated to, treat the bearer
hereof as the absolute owner hereof for all purposes, notwithstanding any
notice to the contrary.


 


(b)           Warrant Agent. The Company may, by written notice to the Registered Holder, appoint an
agent for the purpose of maintaining the Warrant Register referred to in Section 4(a) hereof,
issuing the Common Stock issuable upon the exercise of this Warrant, exchanging
this Warrant, replacing this Warrant or any or all of the foregoing.
Thereafter, any


 


4





















 


such registration, issuance, exchange, or replacement, as the case may be,
may be made at the office of such agent.


 


(c)           Securities Laws.  Neither this Warrant nor the Warrant Shares
have been registered under the Securities Act, or the securities laws of any
state in reliance upon an exemption from the registration requirements of such
act and said laws. The Company will not transfer this Warrant or the Warrant
Shares except as permitted under applicable federal and state securities laws,
pursuant to registration or exemption therefrom. The Company may require,
in its discretion, prior to any transfer, an opinion from counsel for the
Registered Holder, in a form acceptable to the Company’s Board of Directors and
the Company’s legal counsel, stating that the proposed transfer is exempt from
registration under the Securities Act and applicable state securities laws.


 


(d)           Investment
Representations.  The Registered Holder agrees and acknowledges this Warrant is
being acquired for the Registered Holder’s own account, for investment purposes
only, and such acquisition is not for the account of any other person, and not
with a view to a distribution, assignment or resale to others or to
fractionalization in whole or in part, and the Registered Holder further
represents, warrants and agrees that no other person has or will have a direct
or indirect beneficial interest in this Warrant and the Registered Holder will
not offer, sell, assign, pledge, hypothecate or otherwise transfer this Warrant
except in accordance with the Securities Act and applicable state securities
laws.


 


(e)           Conditions to Transfer.  Before any
proposed transfer, and as a condition thereto, if such transfer is not made
pursuant to an effective registration statement under the Securities Act, the
Registered Holder will, if requested by the Company, deliver to the Company (i) an
investment covenant signed by the proposed transferee, and (ii) an
agreement by the transferee to indemnify the Company to the same extent as set
forth in Section 4(f) hereof.


 


(f)            Transfer. Except
as specifically restricted hereby,
this Warrant and all rights hereunder may be transferred by the Registered
Holder, in whole or in part, upon the surrender of this Warrant with a properly
executed Assignment Form in substantially the form attached hereto as Annex
B (the “Assignment”) at the principal office of the Company.


 


(g)           Exchange of Warrant Upon a Transfer. On surrender of this Warrant and upon compliance with
the foregoing provisions, the Company, at its expense, shall execute and
deliver a new Warrant of like tenor in the name of the assignee named in the
Assignment, and this Warrant shall promptly be canceled.  Any assignment, transfer, pledge,
hypothecation or other disposition of this Warrant attempted contrary to the
provisions of this Warrant, or any levy of execution, attachment or other
process attempted upon this Warrant, shall be null and void and without effect.


 


5.             Adjustment.


 


(a)           Computation
of  Adjusted Exercise  Price. 
Except as hereinafter provided, in case the Company shall at any time
after the date hereof issue or sell any shares of its Stock (as defined in Section 5(i)),
other than the issuances or sales referred to in Section 5(h)


 


5





















 


hereof, for a
consideration per share less than the Exercise Price in effect immediately
prior to the issuance or sale of such shares, or without consideration, then
forthwith upon such issuance or sale, the Exercise Price shall (until another
such issuance or sale) be reduced to the price (calculated to the nearest full
cent) equal to the quotient derived by dividing (A) an amount equal to the
sum of (X) the product of (a) the Exercise Price in effect immediately
prior to such issuance or sale, multiplied by (b) the total number of
shares of Stock outstanding immediately prior to such issuance or sale, plus
(Y) the aggregate of the amount of all consideration, if any, received by the
Company upon such issuance or sale, by (B) the total number of shares of
Stock outstanding immediately after such issuance or sale; provided, however,
that in no event shall the Exercise Price be adjusted pursuant to this
computation to an amount in excess of the Exercise Price in effect immediately
prior to such computation, except in the case of a combination of outstanding
shares of Stock, as provided by Section 5(c) hereof.


 


For the purposes of this Section 5
the term Exercise Price shall mean the Exercise Price per share set forth on
the first page of this Warrant, as adjusted from time to time pursuant to
the provisions of this Section 5.


 


(i)            For
purposes of any computation to be made in accordance with this Section 5(a),
the following provisions shall be applicable:


 


(ii)           In
case of the issuance or sale of shares of Stock for a consideration part or all
of which shall be cash, the amount of the cash consideration, shall be deemed
to be the amount of cash received by the Company for such shares (or, if shares
of Stock are offered by the Company for subscription, the subscription price,
or, if either of such securities shall be sold to underwriters or dealers for
public offering without a subscription price, the public offering price, before
deducting therefrom any compensation paid or discount allowed in the sale,
underwriting or purchase thereof by underwriters or dealers or other persons or
entities performing similar services), or any expenses incurred in connection
therewith and less any amounts payable to security holders or any affiliate
thereof, including, without limitation, any employment agreement, royalty,
consulting agreement, covenant not to compete, earnout or contingent payment
right or similar arrangement, agreement or understanding, whether oral or
written; all such amounts shall be valued at the aggregate amount payable
thereunder whether such payments are absolute or contingent and irrespective of
the period or uncertainty of payment, the rate of interest, if any, or the
contingent nature thereof.


 


(iii)          In
case of the issuance or sale (otherwise than as a dividend or other
distribution on any stock of the Company) of shares of Stock for a consideration
part or all of which shall be other than cash, the amount of the consideration
therefor other than cash shall be deemed to be the value of such consideration
as determined in good faith by the Board of Directors of the Company.


 


(iv)          Shares
of Stock issuable by way of dividend or other distribution on any capital stock
of the Company shall be deemed to have been issued immediately after the
opening of business on the day following the record date for the determination
of stockholders entitled to receive such dividend or other distribution and
shall be deemed to have been issued without consideration.


 


6





















 


(v)           The
reclassification of securities of the Company other than shares of Stock into
securities including shares of Stock shall be deemed to involve the issuance of
such shares of Stock for consideration other than cash immediately prior to the
close of business on the date fixed for the determination of security holders
entitled to receive such shares, and the value of the consideration allocable
to such shares of Stock shall be determined as provided in Section 5(a)(iii).


 


(vi)          The
number of shares of Stock at any one time outstanding shall include the
aggregate number of shares issued or issuable (subject to readjustment upon the
actual issuance thereof) upon the exercise of then outstanding options, rights,
warrants, and convertible and exchangeable securities.


 


(b)           Options,
Rights, Warrants and Convertible and Exchangeable Securities.


 


(i)            Subject
to Section 5(h) hereof, in case the Company shall at any time after
the date hereof issue options, rights or warrants to subscribe for shares of
Stock, or issue any securities convertible into or exchangeable for shares of
Stock, for a consideration per share less than the Exercise Price in effect
immediately prior to the issuance of such options, rights, warrants or such
convertible or exchangeable securities, or without consideration, the Exercise
Price in effect immediately prior to the issuance of such options, rights,
warrants or such convertible or exchangeable securities, as the case may be,
shall be reduced to a price determined by making a computation in accordance
with the provisions of Section 5(a) hereof, provided that:


 


(ii)           The
aggregate maximum number of shares of Stock, as the case may be, issuable under
such options, rights or warrants shall be deemed to be issued and outstanding
at the time such options, rights or warrants were issued, for a consideration
equal to the minimum purchase price per share provided for in such options,
rights or warrants at the time of issuance, plus the consideration (determined
in the same manner as consideration received on the issue or sale of shares in
accordance with the terms of the Warrant), if any, received by the Company for
such options, rights or warrants.  The
aggregate maximum number of shares of Stock issuable upon conversion or
exchange of any convertible or exchangeable securities shall be deemed to be
issued and outstanding at the time of issuance of such securities, and for a
consideration equal to the consideration (determined in the same manner as
consideration received on the issue or sale of shares of Stock in accordance
with the terms of the Warrant) received by the Company for such securities, plus
the minimum consideration, if any, receivable by the Company upon the
conversion or exchange thereof.   If any
change shall occur in the price per share provided for in any of the options,
rights or warrants referred to in subsection, or in the price per share at
which the securities referred to in this subsection are exchangeable, such
options, rights or warrants or exchange rights, as the case may be, shall be
deemed to have expired or terminated on the date when such price change became
effective in respect to shares not theretofore issued pursuant to the exercise
or exchange thereof, and the Company shall be deemed to have issued upon such
date new options, rights or warrants or exchangeable securities at the new
price in respect of the number of shares issuable upon the exercise of such
options, rights or warrants or the conversion or exchange of such exchangeable
securities.


 


(c)           Subdivision
and Combination.  If the Company at
any time subdivides (by


 


7





















 


any stock split, stock dividend, recapitalization, reorganization,
reclassification or otherwise), the shares of Stock subject to acquisition
hereunder into a greater number of shares, then, after the date of record for
effecting such subdivision, the Exercise Price in effect immediately prior to
such subdivision will be proportionately reduced and the number of shares of
Common Stock subject to acquisition upon exercise of this Warrant will be
proportionately increased.  If the
Company at any time combines (by reverse stock split, recapitalization,
reorganization, reclassification or otherwise), the shares of Stock subject to
acquisition hereunder into a smaller number of shares, then, after the date of
record for effecting such combination, the Exercise Price in effect immediately
prior to such combination will be proportionately increased and the number of
shares of Common Stock subject to acquisition upon exercise of this Warrant
will be proportionately decreased.


 


(d)           Merger or Consolidation.  In case
of any consolidation of the Company with, or merger of the Company into any
other corporation in which the Company is not the surviving entity, or in case of any sale or conveyance of all or
substantially all of the assets of the Company other than in connection with a
plan of complete liquidation of the Company, then as a condition of such
consolidation, merger or sale or conveyance, adequate provision will be made
whereby the Registered Holder will have the right to acquire and receive upon
exercise of this Warrant in lieu of the shares of Common Stock immediately
theretofore subject to acquisition upon the exercise of this Warrant, such
shares of stock, securities or assets as may be issued or payable with respect
to or in exchange for the number of shares of Common Stock immediately
theretofore subject to acquisition and receivable upon exercise of this Warrant
had such consolidation, merger or sale or conveyance not taken place.  In any such case, the Company will make
appropriate provision to insure that the provisions of this Section 5
hereof will thereafter be applicable as nearly as may be in relation to any
shares of stock or securities thereafter deliverable upon the exercise of this
Warrant.  The Company shall not effect
any such consolidation, merger, sale, transfer or other disposition unless
prior to or simultaneously with the consummation thereof the successor
corporation (if other than the Company) resulting from such consolidation or
merger, or the corporation purchasing or otherwise acquiring such assets or
other appropriate corporation or entity shall assume the obligation to deliver
to the Registered Holder, at the last address of the Registered Holder
appearing on the books of the Company, such shares of stock, securities or
assets as, in accordance with the foregoing provisions, the Registered Holder
may be entitled to purchase, and the other obligations under this Warrant.  The provisions of this paragraph 5(d) shall
similarly apply to successive reorganizations, reclassifications, consolidations,
mergers, sales, transfers or other dispositions.


 


(e)           Notice of Adjustment. Upon the occurrence of any event which requires
any adjustment of the Exercise Price, then and in each such case the Company
shall give notice thereof to the Registered Holder, which notice shall state
the Exercise Price resulting from such adjustment and the increase or decrease,
if any, in the number of Warrant Shares purchasable at such price upon
exercise, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based.


 


(f)            Adjustment in Number of Securities.  Upon each
adjustment of the Exercise Price pursuant to the provisions of this Section 5,
the number of securities issuable upon the exercise of each Warrant shall be
adjusted to the nearest full amount by multiplying a number


 


8





















 


equal to the Exercise Price in effect immediately prior to such adjustment
by the number of Warrant Shares issuable upon exercise of the Warrants
immediately prior to such adjustment and dividing the product so obtained by
the adjusted Exercise Price.


 


(g)           No
Adjustment of Exercise Price in Certain Cases.  No adjustment of the Exercise Price shall be
made if the amount of said adjustment shall be less than two cents ($0.02) per
security issuable upon exercise of this Warrant; provided,
however, that in such case any adjustment that would otherwise be
required then to be made shall be carried forward and shall be made at the time
of and together with the next subsequent adjustment which, together with any
adjustment so carried forward, shall amount to at least two cents ($0.02) per
security issuable upon exercise of this Warrant.


 


(h)           No
Adjustment of Exercise Price in Certain Cases.  No adjustment of the Exercise Price shall be
made:


 


(i)            Upon issuance or sale
of this Warrant or Warrant Shares, or the other Warrants and Warrant Shares
issued in connection herewith, or shares of Common Stock issuable upon exercise
of other options, warrants and convertible securities outstanding as of the
date hereof, including, without limitation, those that are being issued in
connection with the closing of the Private Offering.


 


(ii)           Upon the issuance or
sale of any shares of capital stock, or the grant of options exercisable
therefor, issued or issuable after the date of this Warrant, to directors,
officers, employees, advisers and consultants of the Company or any subsidiary
pursuant to any incentive or non-qualified stock option plan or agreement,
stock purchase plan or agreement, stock restriction agreement or restricted
stock plan, employee stock ownership plan (ESOP), consulting agreement, stock
appreciation right (SAR), stock depreciation right (SDR), bonus stock
arrangement, or such other similar compensatory options, issuances,
arrangements, agreements or plans approved by the Board of Directors.


 


(iii)          Upon
the issuance of any shares of capital stock or the grant of warrants or options
(or the exercise thereof) as consideration for mergers, acquisitions, strategic
alliances and other commercial transactions, other than in connection with a
financing transaction.


 


(iv)          If
the amount of said adjustment shall be less than two cents ($0.02) per security
issuable upon exercise of this Warrant, provided, however,
that in such case any adjustment that would otherwise be required then to be
made shall be carried forward and shall be made at the time of and together
with the next subsequent adjustment which, together with any adjustment so
carried forward, shall amount to at least two cents ($0.02) per security
issuable upon exercise of this Warrant.


 


(i)            Definition
of Stock.  For the purpose of this
Agreement, the term “Stock” shall mean (i) the class of stock designated
as Common Stock in the Certificate of Incorporation of the Company as may be
amended as of the date hereof, or (ii) any other class of stock resulting
from successive changes or reclassifications of such Common Stock consisting
solely


 


9





















 


of changes in par value, or from par value to no par value, or from no
par value to par value.


 


6.             No Impairment. The Company will not, by amendment of its charter or through
reorganization, consolidation, merger, dissolution, sale of assets or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant but will at all times carry out all such terms and
take all such action as may be reasonably necessary or appropriate in order to
protect the rights of the holder of this Warrant against impairment.


 


7.             Liquidating Dividends and Other Distributions. If the Company pays a dividend or makes a
distribution on the Common Stock payable otherwise than in cash out of earnings
or earned surplus (determined in accordance with generally accepted accounting
principles) except for a stock dividend payable in shares of Common Stock (a “Liquidating
Dividend”) or otherwise distributes to its stockholders any assets, properties,
rights, evidence of indebtedness, securities whether issued by the Company or
by another, or any other thing of value, then the Company will pay or
distribute to the Registered Holder of this Warrant, upon the exercise hereof,
in addition to the Warrant Shares purchased upon such exercise, either (i) the
Liquidating Dividend that would have been paid to such Registered Holder if he
had been the owner of record of such Warrant Shares immediately prior to the
date on which a record is taken for such Liquidating Dividend or, if no record
is taken, the date as of which the record holders of Common Stock entitled to
such dividends or distribution are to be determined or (ii) the same
property, assets, rights, evidences of indebtedness, securities or any other
thing of value that the Registered Holder would have been entitled to receive
at the time of such distribution as if the Warrant had been exercised
immediately prior to such distribution.


 


8.             Notices of Record Date, Etc.  In case:


 


(a)           the Company shall take a record of the holders of its Common Stock (or
other stock or securities at the time deliverable upon the exercise of this
Warrant) for the purpose of entitling or enabling them to receive any dividend
or other distribution, or to receive any right to subscribe for or purchase any
shares of stock of any class or any other securities, or to receive any other
right; or of any capital reorganization of the Company, any reclassification of
the capital stock of the Company, any consolidation or merger of the Company
with or into another corporation (other than a consolidation or merger in which
the Company is the surviving entity), or any transfer of all or substantially
all of the assets of the Company; or of the voluntary or involuntary
dissolution, liquidation or winding-up of the Company, then, and in each such case,
the Company will mail or cause to be mailed to the Registered Holder of this
Warrant a notice specifying, as the case may be, (i) the date on which a
record is to be taken for the purpose of such dividend, distribution or right,
and stating the amount and character of such dividend, distribution or right,
or (ii) the effective date on which such reorganization, reclassification,
consolidation, merger, transfer, dissolution, liquidation or winding-up is to
take place, and the time, if any is to be fixed, as of which the holders of
record of Common Stock (or such other stock or securities at the time
deliverable upon the exercise of this Warrant) shall be entitled to exchange
their shares of Common Stock (or such other stock or securities) for securities
or other property deliverable upon such reorganization, reclassification,
consolidation, merger, transfer, dissolution, liquidation or winding-up. The
Company will use its reasonable best efforts to cause


 


10





















 


such notice to be mailed at least ten (10) days prior to the record
date or effective date for the event specified in such notice unless such prior
notice is waived by the Registered Holder.


 


9.             No Rights of Stockholders.  Subject
to other sections of this Warrant, the Registered Holder shall not be entitled
to vote, to receive dividends or subscription rights, nor shall anything
contained herein be construed to confer upon the Registered Holder, as such,
any of the rights of a stockholder of the Company, including without limitation
any right to vote for the election of directors or upon any matter submitted to
stockholders, to give or withhold consent to any corporate action (whether upon
any recapitalization, issuance of stock, reclassification of stock, change of
par value or change of stock to no par value, consolidation, merger,
conveyance, or otherwise), to receive notices, or otherwise, until the Warrant
shall have been exercised as provided herein.


 


10.           Replacement of Warrant. Upon receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant
and (in the case of loss, theft or destruction) upon delivery of an indemnity
agreement reasonably satisfactory to the Company, or (in the case of mutilation)
upon surrender and cancellation of this Warrant, the Company will issue, in
lieu thereof, a new Warrant of like tenor.


 


11.           Mailing of Notices, Etc. All notices and other communications from the
Company to the Registered Holder of this Warrant shall be mailed by first-class
certified or registered mail, postage prepaid, to the address furnished to the
Company in writing by the last Registered Holder of this Warrant who shall have
furnished an address to the Company in writing. All notices and other communications
from the Registered Holder of this Warrant or in connection herewith to the
Company shall be mailed by first-class certified or registered mail, postage
prepaid, to the Company at its principal office set forth below. If the Company
should at any time change the location of its principal office to a place other
than as set forth below, then it shall give prompt written notice to the
Registered Holder of this Warrant and thereafter all references in this Warrant
to the location of its principal office at the particular time shall be as so
specified in such notice.


 


12.           Change or Waiver. Any term of this Warrant may be changed or waived only by an instrument
in writing signed by the party against which enforcement of the change or
waiver is sought.


 


13.           Headings. The headings in this Warrant are for purposes of reference only and
shall not limit or otherwise affect the meaning of any provision of this
Warrant.


 


14.           Severability.  If any provision of this Warrant
shall be held to be invalid and unenforceable, such invalidity or
unenforceability shall not affect any other provision of this Warrant.


 


15.           Governing
Law and Submission to Jurisdiction. This Warrant will be governed by and
construed in accordance with the laws of the State of New York without regard
to principles of conflict or choice of laws of any jurisdiction.  The parties hereby agree that any action,
proceeding or claim against it arising out of, or relating in any way to this
Warrant shall


 


11





















 


be brought and enforced in the courts of the State of New York, and
irrevocably submit to such jurisdiction, which jurisdiction shall be exclusive.


 


16.           Supplements
and Amendments.  The Company and the
Registered Holder may from time to time supplement or amend this Warrant in
order to cure any ambiguity, to correct or supplement any provision contained
herein which may be defective or inconsistent with any provision herein, or to
make any other provisions in regard to matters or questions arising hereunder
which the Company and the Holder may deem necessary or desirable.


 


17.           Successors.  All the covenants and provisions of this
Warrant shall be binding upon and inure to the benefit of the Company and the
Registered Holder and their respective successors and assigns hereunder.


 


18.           Benefits
of this Warrant.  Nothing in this
Warrant shall be construed to give to any person, entity or corporation other
than the Company and the Registered Holder of this Warrant any legal or
equitable right, remedy or claim under this Warrant; and this Warrant shall be
for the sole and exclusive benefit of the Company and the Registered Holder of
this Warrant.


 


21.           Interpretation.  All capitalized terms not defined herein or
in Annex A or B hereto shall have the meaning assigned to such term in the
Subscription Agreement.


 


12





















 


IN WITNESS WHEREOF, ARIES VENTURES INC.
has caused this Warrant to be signed by its duly authorized officer under its
corporate seal and to be dated on the day and year first written above.


 


 


	
   

  	
  ARIES VENTURES INC.,

  
	
   

  	
  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Printed Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  11622 El Camino
  Real

  
	
   

  	
   

  	
  San Diego, CA
  92130

  
									



 


13





















 


ANNEX A


 


NOTICE OF EXERCISE FORM


 


	
  To:

  	
   

  	
  Dated:

  



 


In accordance with the Warrant enclosed with this Notice
of Exercise Form, the undersigned hereby irrevocably elects to purchase                           
shares of common stock (“Common Stock”) of Aries Ventures Inc.  (“Company”) and encloses herewith $               
in cash, certified or official bank check or checks or other immediately
available funds, which sum represents the aggregate Exercise Price (as defined
in the Warrant) for the number of shares of Common Stock to which this Notice
of Exercise Form relates, together with any applicable taxes payable by
the undersigned pursuant to the Warrant.


 


The
undersigned hereby represents, warrants to, and agrees with, the Company that:


 


(i)            He is
acquiring the Warrant Shares for his own account and not with a view towards
the distribution thereof;


 


(ii)           He has
received a copy of all reports and documents required to be filed by the
Company with the United States Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934, as amended, within the last 12 months and
all reports issued by the Company to its stockholders;


 


(iii)          He
understands that he must bear the economic risk of the investment in the
Warrant Shares, which cannot be sold unless they are registered under the
Securities Act of 1933 (the “1933 Act”) or an exemption therefrom is available
thereunder; and


 


(iv)          He is aware
that the Company shall place stop transfer orders with its transfer agent
against the transfer of the Warrant Shares in the absence of registration under
the 1933 Act or an exemption therefrom as provided herein.


 


 


	
   

  	
  Signature:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
				



 





















 


ANNEX B


 


ASSIGNMENT FORM


 


FOR VALUE RECEIVED,                                        
hereby sells, assigns and transfers all of the rights of the undersigned under
the attached Warrant with respect to the number of shares of Common Stock
covered thereby set forth below, unto:


 


	
  Name of Assignee

  	
   

  	
  Address

  	
   

  	
  No. of Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Dated:


 


 


Signature: 


 


Dated:


 


 


Witness: