exv4w2






Exhibit 4.2




ARCADIA RESOURCES, INC.

FORM OF

WARRANT TO PURCHASE COMMON STOCK




Warrant No.:                     

Number of Shares of Common Stock:                     

Date of Issuance: November ___, 2009 (“Issuance Date”)




     Arcadia Resources, Inc., a Nevada corporation (the “Company”), hereby certifies that,
for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
[INVESTOR NAME], the registered holder hereof or its permitted assigns (the “Holder”), is
entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price
(as defined below) then in effect, upon compliance with the provisions of Section 1(a) and, to the
extent applicable Section 1(d) hereof, at any time or times on or after May ___, 2010 [the date that
is 6 months and one day following the Issuance Date] (the “Exercisability Date”), but not
after 11:59 p.m., New York time, on the Expiration Date (as defined below), [                    
(                    )]1 fully paid nonassessable shares of Common Stock (as defined below)
(the “Warrant Shares”). Except as otherwise defined herein, capitalized terms in this
Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued in
exchange, transfer or replacement hereof, the “Warrant”), shall have the meanings set forth
in Section 15. This Warrant is the Warrant to purchase Common Stock issued pursuant to (i)
Section 2 of that certain Subscription Agreement (the “Subscription Agreement”), dated as
of November ___, 2009 (the “Subscription Date”), by and between the Company and the Holder
(the “Subscription Agreement”) and (ii) the Company’s Registration Statement on Form S-3
(File number 333-160928) (the “Registration Statement”).



     1. EXERCISE OF WARRANT.



          (a) Mechanics of Exercise. Subject to the terms and conditions hereof, this Warrant
may be exercised by the Holder on any day on or after the Exercisability Date, in whole or in part,
by (i) delivery of a written notice, in the form attached hereto as Exhibit A (the “Exercise
Notice”), of the Holder’s election to exercise this Warrant and (ii) (A) payment to the Company
of an amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as
to which this Warrant is being exercised (the “Aggregate Exercise Price”) in cash or by
wire transfer of immediately available funds or (B) provided the conditions for cashless exercise
set forth in Section 1(d) are satisfied, written notice to the Company that this Warrant is
being exercised pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder
shall not be required to deliver the original Warrant in order to effect an exercise hereunder.
Execution and delivery of the Exercise Notice with respect to less than all of the Warrant Shares
shall have the same effect as cancellation of the original Warrant and issuance of a new Warrant
evidencing the right to purchase the remaining number of Warrant Shares. On or before the first
(1st) Business Day following the date on which the Company has received each of the Exercise Notice
and the Aggregate Exercise Price (or notice of a Cashless Exercise) (the “Exercise Delivery
Documents”), the Company shall transmit by facsimile an acknowledgment of confirmation of
receipt of the Exercise Delivery Documents to the Holder and [                                        ] (the
“Transfer Agent”). On or before the third (3rd) Business Day following the date on which
the Company has received all of the Exercise Delivery Documents (the “Share Delivery
Date”), the Company shall (x) provided that the Transfer Agent is participating in The
Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program, upon the
request of the Holder, credit such aggregate number of Warrant Shares to






 




			
	1	 	Insert a number of shares equal to 45% of the number of
shares of Common Stock purchased under the Subscription Agreement.




 









 









which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s
balance account with DTC through its Deposit Withdrawal Agent Commission system, or (y) if the
Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue
and dispatch by overnight courier to the address as specified in the Exercise Notice, a
certificate, registered in the Company’s share register in the name of the Holder or its designee,
for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise. Upon
delivery of the Exercise Delivery Documents, the Holder shall be deemed for all corporate purposes
to have become the holder of record of the Warrant Shares with respect to which this Warrant has
been exercised, irrespective of the date such Warrant Shares are credited to the Holder’s DTC
account or the date of delivery of the certificates evidencing such Warrant Shares, as the case may
be. If this Warrant is submitted in connection with any exercise pursuant to this Section
1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is
greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall
as soon as practicable and in no event later than three (3) Business Days after any exercise and at
its own expense, issue a new Warrant (in accordance with Section 7(d)) representing the
right to purchase the number of Warrant Shares purchasable immediately prior to such exercise under
this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised.
No fractional shares of Common Stock are to be issued upon the exercise of this Warrant, but rather
the number of shares of Common Stock to be issued shall be rounded up to the nearest whole number.
The Company shall pay any and all taxes which may be payable with respect to the issuance and
delivery of Warrant Shares upon exercise of this Warrant.




          (b) Exercise Price. For purposes of this Warrant, “Exercise Price” means
$0.95, subject to adjustment as provided herein.




          (c) Company’s Failure to Timely Deliver Securities. If the Company shall fail for any
reason or for no reason to issue to the Holder within three (3) Business Days of receipt of the
Exercise Delivery Documents in compliance with the terms of this Section 1, a certificate
for the number of shares of Common Stock to which the Holder is entitled and register such shares
of Common Stock on the Company’s share register or to credit the Holder’s balance account with DTC
for such number of shares of Common Stock to which the Holder is entitled upon the Holder’s
exercise of this Warrant, and if on or after such Trading Day the Holder purchases (in an open
market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
Holder of shares of Common Stock issuable upon such exercise that the Holder anticipated receiving
from the Company (a “Buy-In”), then the Company shall, within three (3) Business Days after
the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount
equal to the Holder’s total purchase price (including brokerage commissions, if any) for the shares
of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s obligation
to deliver such certificate (and to issue such Warrant Shares) shall terminate, or (ii) promptly
honor its obligation to deliver to the Holder a certificate or certificates representing such
Warrant Shares and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In
Price over the product of (A) such number of shares of Common Stock, times (B) the Closing Bid
Price on the date of exercise.




          (d) Cashless Exercise. Notwithstanding anything contained herein to the contrary, if
and only if either (i) a registration statement covering the Warrant Shares that are the subject of
the Exercise Notice (the “Unavailable Warrant Shares”), or (ii) an exemption from
registration, is not available for the resale of such Unavailable Warrant Shares, the Holder may,
in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash
payment otherwise contemplated to be made to the Company upon such exercise in payment of the
Aggregate Exercise Price, elect instead to receive upon such exercise the “Net Number” of shares of
Common Stock determined according to the following formula (a “Cashless Exercise”):




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   Net Number =




                              



                         For purposes of the foregoing formula:




	 	A = 	 	 the total number of shares with respect to which this Warrant is then being
exercised.
	 
	 	B = 	 	 the arithmetic average of the Closing Sale Prices of
the shares of Common Stock for the five (5) consecutive Trading Days
ending on the date immediately preceding the date of the Exercise Notice.
	 
	 	C = 	 	 the Exercise Price then in effect for the applicable Warrant
Shares at the time of such exercise.





          (e) Rule 144. For purposes of Rule 144(d) promulgated under the Securities Act of
1933, as amended, it is intended that the Warrant Shares issued in a Cashless Exercise shall be
deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be
deemed to have commenced, on the date this Warrant was originally issued pursuant to the
Subscription Agreement.




          (f) Disputes. In the case of a dispute as to the determination of the Exercise Price
or the arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the Holder
the number of Warrant Shares that are not disputed, and all such disputes shall be resolved
pursuant to Section 12.




          (g) Beneficial Ownership. The Company shall not effect the exercise of this Warrant,
and the Holder shall not have the right to exercise this Warrant, to the extent that after giving
effect to such exercise, such Person (together with such Person’s affiliates) would beneficially
own in excess of 4.99% (the “Maximum Percentage”) of the shares of Common Stock outstanding
immediately after giving effect to such exercise. For purposes of the foregoing sentence, the
aggregate number of shares of Common Stock beneficially owned by such Person and its affiliates
shall include the number of shares of Common Stock issuable upon exercise of this Warrant with
respect to which the determination of such sentence is being made, but shall exclude shares of
Common Stock which would be issuable upon (i) exercise of the remaining, unexercised portion of
this Warrant beneficially owned by such Person and its affiliates and (ii) exercise or conversion
of the unexercised or unconverted portion of any other securities of the Company beneficially owned
by such Person and its affiliates (including, without limitation, any convertible notes or
convertible preferred stock or warrants) subject to a limitation on conversion or exercise
analogous to the limitation contained herein. Except as set forth in the preceding sentence, for
purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended. For purposes of this Warrant, in
determining the number of outstanding shares of Common Stock, the Holder may rely on the number of
outstanding shares of Common Stock as reflected in (1) the Company’s most recent Form 10-K, Form
10-Q, Current Report on Form 8-K or other public filing with the Securities and Exchange
Commission, as the case may be, (2) a more recent public announcement by the Company or (3) any
other notice by the Company or the Transfer Agent setting forth the number of shares of Common
Stock outstanding. To the extent that the limitation contained in this Section 1(g)
applies, the determination of whether this Warrant is exercisable (in relation to other securities
owned by such Holder) and of which a portion of this Warrant is exercisable shall be in the sole
discretion of a Holder, and the submission of an Exercise Notice shall be deemed to be each
Holder’s determination of whether this Warrant is exercisable (in relation to other securities
owned by such Holder) and of which portion of this Warrant is exercisable, in each case subject to
such aggregate percentage limitation, and the Company shall have no obligation to verify or confirm
the accuracy of such determination. For any reason at any time, upon the written or oral




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request of the Holder, the Company shall within two (2) Business Days confirm orally and in
writing to the Holder the number of shares of Common Stock then outstanding. In any case, the
number of outstanding shares of Common Stock shall be determined after giving effect to the
conversion or exercise of securities of the Company, including this Warrant, by the Holder and its
affiliates since the date as of which such number of outstanding shares of Common Stock was
reported. By written notice to the Company, the Holder may from time to time increase or decrease
the Maximum Percentage to any other percentage not in excess of 4.99% specified in such notice;
provided, however, that (i) any such increase will not be effective until the
sixty-first (61st) day after such notice is delivered to the Company, and (ii) any such increase or
decrease will apply only to the Holder. The provisions of this paragraph shall be construed and
implemented in a manner otherwise than in strict conformity with the terms of this Section
1(g) to correct this paragraph (or any portion hereof) which may be defective or inconsistent
with the intended beneficial ownership limitation herein contained or to make changes or
supplements necessary or desirable to properly give effect to such limitation.




     2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and the
number of Warrant Shares shall be adjusted from time to time as follows:



          (a) Adjustment upon Subdivision or Combination of Common Stock. If the Company at any
time on or after the Subscription Date subdivides (by any stock split, stock dividend,
recapitalization, reorganization, scheme, arrangement or otherwise) one or more classes of its
outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect
immediately prior to such subdivision will be proportionately reduced and the number of Warrant
Shares will be proportionately increased. If the Company at any time on or after the Subscription
Date combines (by any stock split, stock dividend, recapitalization, reorganization, scheme,
arrangement or otherwise) one or more classes of its outstanding shares of Common Stock into a
smaller number of shares, the Exercise Price in effect immediately prior to such combination will
be proportionately increased and the number of Warrant Shares will be proportionately decreased.
Any adjustment under this Section 2(a) shall become effective at the close of business on
the date the subdivision or combination becomes effective.




          (b) Other Events. If any event occurs of the type contemplated by the provisions of
this Section 2 but not expressly provided for by such provisions (including, without
limitation, the granting of stock appreciation rights, phantom stock rights or other rights with
equity features, other than Options or Purchase Rights (which are covered by Section 4(a) hereof)),
then the Company’s Board of Directors will make an appropriate adjustment in the Exercise Price and
the number of Warrant Shares so as to protect the rights of the Holder; provided,
however, that no such adjustment pursuant to this Section 2(b) will increase the
Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant to this
Section 2.




     3. RIGHTS UPON DISTRIBUTION OF ASSETS. If the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets) to holders of shares of Common
Stock, by way of return of capital or otherwise (including, without limitation, any distribution of
cash, stock or other securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a
“Distribution”), at any time after the issuance of this Warrant, then, in each such case:



          (a) any Exercise Price in effect immediately prior to the close of business on the record date
fixed for the determination of holders of shares of Common Stock entitled to receive the
Distribution shall be reduced, effective as of the close of business on such record date, to a
price determined by multiplying such Exercise Price by a fraction of which (i) the numerator shall
be the Closing Bid Price of the shares of Common Stock on the Trading Day immediately preceding
such record date minus the value of the Distribution (as determined in good faith by the Company’s
Board of



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Directors) applicable to one share of Common Stock, and (ii) the denominator shall be the
Closing Bid Price of the shares of Common Stock on the Trading Day immediately preceding such
record date; and




          (b) the number of Warrant Shares shall be increased to a number of shares equal to the number
of shares of Common Stock obtainable immediately prior to the close of business on the record date
fixed for the determination of holders of shares of Common Stock entitled to receive the
Distribution multiplied by the reciprocal of the fraction set forth in the immediately preceding
paragraph (a); provided, however, that in the event that the Distribution is of
shares of Common Stock (or common stock) (“Other Shares of Common Stock”) of a company
whose common shares are traded on a national securities exchange or a national automated quotation
system, then the Holder may elect to receive a warrant to purchase Other Shares of Common Stock in
lieu of an increase in the number of Warrant Shares, the terms of which shall be identical to those
of this Warrant, except that such warrant shall be exercisable into the number of shares of Other
Shares of Common Stock that would have been payable to the Holder pursuant to the Distribution had
the Holder exercised this Warrant immediately prior to such record date and with an aggregate
exercise price equal to the product of the amount by which the exercise price of this Warrant was
decreased with respect to the Distribution pursuant to the terms of the immediately preceding
paragraph (a) and the number of Warrant Shares calculated in accordance with the first part of this
paragraph (b).




     4. PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.



          (a) Purchase Rights. In addition to any adjustments pursuant to Section 2
above, if at any time the Company grants, issues or sells any Options, Convertible Securities or
rights to purchase stock, warrants, securities or other property pro rata to the record holders of
any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be
entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase
Rights which the Holder could have acquired if the Holder had held the number of shares of Common
Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on the
exercise of this Warrant) immediately before the date on which a record is taken for the grant,
issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the
record holders of shares of Common Stock are to be determined for the grant, issue or sale of such
Purchase Rights.




          (b) Fundamental Transactions. The Company shall not enter into or be a party to a
Fundamental Transaction unless (i) the Successor Entity assumes in writing all of the obligations
of the Company under this Warrant pursuant to a written agreement and (ii) the Successor Entity is
a company that has a class of equity securities registered pursuant to the Securities Exchange Act
of 1934, as amended, and such security is listed or quoted on a national securities exchange,
national automated quotation system or the OTC Bulletin Board. Upon the occurrence of any
Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that
from and after the date of such Fundamental Transaction, the provisions of this Warrant referring
to the “Company” shall refer instead to the Successor Entity), and may exercise every right and
power of the Company and shall assume all of the obligations of the Company under this Warrant with
the same effect as if such Successor Entity had been named as the Company herein. Upon consummation
of the Fundamental Transaction, the Successor Entity shall deliver to the Holder written
confirmation that there shall be issued upon exercise of this Warrant at any time after the
consummation of the Fundamental Transaction, in lieu of the shares of the Common Stock (or other
securities, cash, assets or other property) purchasable upon the exercise of this Warrant prior to
such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property
whatsoever (including warrants or other purchase or subscription rights) which the Holder would
have been entitled to receive upon the happening of such Fundamental Transaction had this Warrant
been exercised immediately prior to such Fundamental Transaction, as adjusted in accordance with
the provisions of this Warrant. In addition to and not in substitution for any other rights
hereunder, prior to



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the consummation of any Fundamental Transaction pursuant to which holders of shares of Common
Stock are entitled to receive securities or other assets with respect to or in exchange for shares
of Common Stock (a “Corporate Event”), the Company shall make appropriate provision to
insure that the Holder will thereafter have the right to receive upon an exercise of this Warrant
at any time after the consummation of the Fundamental Transaction but prior to the Expiration Date,
in lieu of the shares of the Common Stock (or other securities, cash, assets or other property)
purchasable upon the exercise of this Warrant prior to such Fundamental Transaction, such shares of
stock, securities, cash, assets or any other property whatsoever (including warrants or other
purchase or subscription rights) which the Holder would have been entitled to receive upon the
happening of such Fundamental Transaction had this Warrant been exercised immediately prior to such
Fundamental Transaction, as adjusted in accordance with the provisions of this Warrant. Provision
made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to
the Holder. If holders of Common Stock are given any choice as to the securities, cash or property
to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to
the consideration it receives upon any exercise of this Warrant following such Fundamental
Transaction. The provisions of this Section shall apply similarly and equally to successive
Fundamental Transactions and Corporate Events and shall be applied without regard to any
limitations on the exercise of this Warrant.




          (c) Black-Scholes Value. Notwithstanding the provisions of Section 4(b), the Company
shall have the right to require that the Holder waive the requirements of Section 4(b) (the
“Waiver”) in exchange for a payment of cash in an amount equal to the Black-Scholes Value
of the remaining unexercised portion of this Warrant on the date of such Fundamental Transaction,
with the Waiver becoming effective, and this Warrant cancelled, concurrently with such payment of
such cash amount (the “Fundamental Transaction Amount”) to the Holder upon closing the
Fundamental Transaction. Notwithstanding anything to the contrary in this Section 4(c), in no event
may the Company effect a Fundamental Transaction with a non-publicly traded Successor Entity when
the consideration paid upon closing the Fundamental Transaction is anything other than cash.
Notwithstanding anything further to the contrary in this Section 4(c), but subject to the ownership
limitation set forth in Section 1(g), until such time that the Holder receives the Fundamental
Transaction Amount (at which point this Warrant shall be cancelled), this Warrant may be exercised,
in whole or in part, by the Holder prior to closing the Fundamental Transaction, into Common Stock
pursuant to Section 1(a).




     5. NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by
amendment of its Articles of Incorporation, Bylaws or through any reorganization, transfer of
assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or
any other voluntary action, avoid or seek to avoid the observance or performance of any of the
terms of this Warrant, and will at all times in good faith carry out all the provisions of this
Warrant and take all action as may be required to protect the rights of the Holder. Without
limiting the generality of the foregoing, the Company (i) shall not increase the par value of any
shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then
in effect, (ii) shall take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the
exercise of this Warrant, and (iii) shall, so long as this Warrant is outstanding, take all action
necessary to reserve and keep available out of its authorized and unissued shares of Common Stock,
solely for the purpose of effecting the exercise of this Warrant, 100% of the number of shares of
Common Stock issuable upon exercise of this Warrant then outstanding (without regard to any
limitations on exercise).



     6. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein,
the Holder, solely in such Person’s capacity as a holder of this Warrant, shall not be entitled to
vote or receive dividends or be deemed the holder of share capital of the Company for any purpose,
nor shall anything contained in this Warrant be construed to confer upon the Holder, solely



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in such Person’s capacity as the Holder of this Warrant, any of the rights of a stockholder of
the Company or any right to vote, give or withhold consent to any corporate action (whether any
reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or
otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise,
prior to the issuance to the Holder of the Warrant Shares which such Person is then entitled to
receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant
shall be construed as imposing any liabilities on the Holder to purchase any securities (upon
exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities
are asserted by the Company or by creditors of the Company.



     7. REISSUANCE OF WARRANTS.



          (a) Transfer of Warrant. If this Warrant is to be transferred, the Holder shall
surrender this Warrant to the Company, whereupon the Company will forthwith issue and deliver upon
the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the
Holder may request, representing the right to purchase the number of Warrant Shares being
transferred by the Holder and, if less then the total number of Warrant Shares then underlying this
Warrant is being transferred, a new Warrant (in accordance with Section 7(d)) to the Holder
representing the right to purchase the number of Warrant Shares not being transferred.




          (b) Lost, Stolen or Mutilated Warrant. Upon receipt by the Company 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, of any indemnification undertaking by the
Holder to the Company in customary form and, in the case of mutilation, upon surrender and
cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in
accordance with Section 7(d)) representing the right to purchase the Warrant Shares then
underlying this Warrant.




          (c) Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the
surrender hereof by the Holder at the principal office of the Company, for a new Warrant or
Warrants (in accordance with Section 7(d)) representing in the aggregate the right to
purchase the number of Warrant Shares then underlying this Warrant, and each such new Warrant will
represent the right to purchase such portion of such Warrant Shares as is designated by the Holder
at the time of such surrender; provided, however, that no Warrants for fractional
shares of Common Stock shall be given.




          (d) Issuance of New Warrants. Whenever the Company is required to issue a new Warrant
pursuant to the terms of this Warrant, such new Warrant (i) shall be of like tenor with this
Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase
the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued
pursuant to Section 7(a) or Section 7(c), the Warrant Shares designated by the
Holder which, when added to the number of shares of Common Stock underlying the other new Warrants
issued in connection with such issuance, does not exceed the number of Warrant Shares then
underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new
Warrant which is the same as the Issuance Date, and (iv) shall have the same rights and conditions
as this Warrant.




     8. NOTICES. Whenever notice is required to be given under this Warrant, unless otherwise
provided herein, such notice shall be given in accordance with Section 7 of Annex I to the
Subscription Agreement. The Company shall provide the Holder with prompt written notice of all
actions taken pursuant to this Warrant, including in reasonable detail a description of such action
and the reason therefore.



     9. AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant
may be amended and the Company may take any action herein prohibited, or omit to



7









 







perform any act herein required to be performed by it, only if the Company has obtained the
written consent of the Holder.



     10. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance
with, and all questions concerning the construction, validity, interpretation and performance of
this Warrant shall be governed by, the internal laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of the State of New York
or any other jurisdictions) that would cause the application of the laws of any jurisdictions other
than the State of New York.



     11. CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company
and the Holder and shall not be construed against any person as the drafter hereof. The headings
of this Warrant are for convenience of reference and shall not form part of, or affect the
interpretation of, this Warrant.



     12. DISPUTE RESOLUTION. In the case of a dispute as to the determination of the Exercise
Price or the arithmetic calculation of the Warrant Shares, the Company shall submit the disputed
determinations or arithmetic calculations via facsimile within two (2) Business Days of receipt of
the Exercise Notice giving rise to such dispute, as the case may be, to the Holder. If the Holder
and the Company are unable to agree upon such determination or calculation of the Exercise Price or
the Warrant Shares within three (3) Business Days of such disputed determination or arithmetic
calculation being submitted to the Holder, then the Company shall, within two (2) Business Days
submit via facsimile (a) the disputed determination of the Exercise Price to an independent,
reputable investment bank selected by the Company and approved by the Holder or (b) the disputed
arithmetic calculation of the Warrant Shares to the Company’s independent, outside accountant. The
Company shall cause at its expense the investment bank or the accountant, as the case may be, to
perform the determinations or calculations and notify the Company and the Holder of the results no
later than ten (10) Business Days from the time it receives the disputed determinations or
calculations. Such investment bank’s or accountant’s determination or calculation, as the case may
be, shall be binding upon all parties absent demonstrable error.



     13. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in
this Warrant shall be cumulative and in addition to all other remedies available under this
Warrant, at law or in equity (including a decree of specific performance and/or other injunctive
relief), and nothing herein shall limit the right of the Holder to pursue actual damages for any
failure by the Company to comply with the terms of this Warrant.



     14. TRANSFER. This Warrant may be offered for sale, sold, transferred or assigned without the
consent of the Company.



     15. CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the
following meanings:



          (a) “Black-Scholes Value” means the value of this Warrant obtained from the “OV”
function on Bloomberg using (i) a price per share of Common Stock equal to the greater of (A) the
arithmetic average of the weighted average price of the Common Stock for the five Trading Days
immediately preceding the date of consummation of the applicable Fundamental Transaction and (B)
the weighted average price of the Common Stock for the Trading Day immediately preceding the date
of consummation of the applicable Fundamental Transaction, (ii) a risk-free interest rate
corresponding to the U.S. Treasury rate for a period equal to the remaining term of this Warrant as
of the date of consummation of the Fundamental Transaction, and (iii) an expected volatility equal
to the 100 day



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volatility obtained from the HVT function on Bloomberg determined as of the Trading Day
immediately following the public announcement of the applicable Fundamental Transaction,
provided, however, in no event shall the volatility be less than 80%.




          (b) “Bloomberg” means Bloomberg Financial Markets.




          (c) “Business Day” means any day other than Saturday, Sunday or other day on which
commercial banks in The City of New York are authorized or required by law to remain closed.




          (d) “Closing Bid Price” and “Closing Sale Price” means, for any security as of
any date, the last closing bid price and last closing trade price, respectively, for such security
on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on
an extended hours basis and does not designate the closing bid price or the closing trade price, as
the case may be, then the last bid price or the last trade price, respectively, of such security
prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not
the principal securities exchange or trading market for such security, the last closing bid price
or last trade price, respectively, of such security on the principal securities exchange or trading
market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not
apply, the last closing bid price or last trade price, respectively, of such security in the
over-the-counter market on the electronic bulletin board for such security as reported by
Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such
security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any
market makers for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly the
National Quotation Bureau, Inc.). If the Closing Bid Price or the Closing Sale Price cannot be
calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price
or the Closing Sale Price, as the case may be, of such security on such date shall be the fair
market value as determined by the Board of Directors of the Company in the exercise of its good
faith judgment. All such determinations to be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during the applicable calculation period.




          (e) “Common Stock” means (i) the Company’s shares of Common Stock, par value $0.001
per share, and (ii) any share capital into which such Common Stock shall have been changed or any
share capital resulting from a reclassification of such Common Stock.




          (f) “Convertible Securities” means any stock or securities (other than Options)
directly or indirectly convertible into or exercisable or exchangeable for shares of Common Stock.




          (g) “Eligible Market” means the Principal Market, The New York Stock Exchange, Inc.,
The NYSE Amex, The NASDAQ Global Select Market or The NASDAQ Capital Market.




          (h) “Expiration Date” means the date five (5) years following the Exercisability Date
or, if such date falls on a day other than a Business Day or on which trading does not take place
on the Principal Market (a “Holiday”), the next date that is not a Holiday.




          (i) “Fundamental Transaction” means the Company doing any of the following after the
Issuance Date: (a) consolidate or merge with or into any other Person and the Company shall not be
the continuing or surviving corporation of such consolidation or merger, or (b) permit any other
Person to consolidate with or merge into the Company and the Company shall be the continuing or
surviving Person but, in connection with such consolidation or merger, any securities of the
Company shall be changed into or exchanged for securities of any other Person or cash or any other
property, or (c) transfer all or substantially all of its properties or assets to any other Person,
or (d) effect a capital reorganization or reclassification of its securities.




9









 








          (j) “Options” means any rights, warrants or options to subscribe for or purchase
shares of Common Stock or Convertible Securities.




          (k) “Parent Entity” of a Person means an entity that, directly or indirectly, controls
the applicable Person and whose common stock or equivalent equity security is quoted or listed on
an Eligible Market, or, if there is more than one such Person or Parent Entity, the Person or
Parent Entity with the largest public market capitalization as of the date of consummation of the
Fundamental Transaction.




          (l) “Person” means an individual, a limited liability company, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization, any other entity and a government
or any department or agency thereof.




          (m) “Principal Market” means The NYSE Amex.




          (n) “Successor Entity” means the Person (or, if so elected by the Holder, the Parent
Entity) formed by, resulting from or surviving any Fundamental Transaction or the Person (or, if so
elected by the Holder, the Parent Entity) with which such Fundamental Transaction shall have been
entered into.




          (o) “Trading Day” means any day on which the Common Stock are traded on the Principal
Market, or, if the Principal Market is not the principal trading market for the Common Stock, then
on the principal securities exchange or securities market on which the Common Stock are then
traded; provided, however, that “Trading Day” shall not include any day on which
the Common Stock are scheduled to trade on such exchange or market for less than 4.5 hours or any
day that the Common Stock are suspended from trading during the final hour of trading on such
exchange or market (or if such exchange or market does not designate in advance the closing time of
trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time).




          (p) “Weighted Average Price” means, for any security as of any date, the dollar
volume-weighted average price for such security on the Principal Market during the period beginning
at 9:30:01 a.m., New York City time, and ending at 4:00:00 p.m., New York City time, as reported by
Bloomberg through its “Volume at Price” function or, if the foregoing does not apply, the dollar
volume-weighted average price of such security in the over-the-counter market on the electronic
bulletin board for such security during the period beginning at 9:30:01 a.m., New York City time,
and ending at 4:00:00 p.m., New York City time, as reported by Bloomberg, or, if no dollar
volume-weighted average price is reported for such security by Bloomberg for such hours, the
average of the highest closing bid price and the lowest closing ask price of any of the market
makers for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly the National
Quotation Bureau, Inc.). If the Weighted Average Price cannot be calculated for such security on
such date on any of the foregoing bases, the Weighted Average Price of such security on such date
shall be the fair market value as mutually determined by the Company and the Holder. If the
Company and the Holder are unable to agree upon the fair market value of such security, then such
dispute shall be resolved pursuant to Section 12 with the term “Weighted Average Price”
being substituted for the term “Exercise Price.” All such determinations shall be appropriately
adjusted for any share dividend, share split or other similar transaction during such period.




[Signature Page Follows]




10









 





     IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to be duly
executed as of the Issuance Date set out above.



	 	 	 	 	 
	 	ARCADIA RESOURCES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




 









 





EXHIBIT A




EXERCISE NOTICE

TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK




ARCADIA RESOURCES, INC.



The undersigned holder hereby exercises the right to purchase                     ___of the shares of Common
Stock (“Warrant Shares”) of Arcadia Resources, Inc., a Nevada corporation (the
“Company”), evidenced by the attached Warrant to Purchase Common Stock (the
“Warrant”). Capitalized terms used herein and not otherwise defined shall have the
respective meanings set forth in the Warrant.



1. Form of Exercise Price. The Holder intends that payment of the Exercise Price shall be made as:





                     a “Cash Exercise” with respect to                      Warrant Shares; and/or




                     a “Cashless Exercise” with respect to                      Warrant Shares.


2. Payment of Exercise Price. In the event that the holder has elected a Cash Exercise with
respect to some or all of the Warrant Shares to be issued pursuant hereto, the holder shall pay the
Aggregate Exercise Price in the sum of $                     to the Company in accordance with the terms of
the Warrant.



3. Delivery of Warrant Shares. The Company shall deliver to the holder                      Warrant Shares in
accordance with the terms of the Warrant.




Date:                      ___,           




	 	 	 	 	 
	 	Name of Registered Holder

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




 









 





ACKNOWLEDGMENT



The Company hereby acknowledges this Exercise Notice and hereby directs
[                                                            ] to issue the above indicated number of shares of Common Stock in
accordance with the Transfer Agent Instructions dated November ___, 2009 from the Company and
acknowledged and agreed to by [                                                            ].




	 	 	 	 	 
	 	ARCADIA RESOURCES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title: