Exhibit 10.1
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”). NO INTEREST IN THIS NOTE MAY BE OFFERED OR SOLD EXCEPT PURSUANT TO
(i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (ii) TO THE EXTENT
APPLICABLE, PURSUANT TO RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE
ACT), OR (iii) AN EXEMPTION FROM REGISTRATION UNDER THE ACT WHERE THE HOLDER HAS
FURNISHED TO THE PAYOR AN ACCEPTABLE OPINION OF ITS COUNSEL THAT AN EXEMPTION
PROM REGISTRATION UNDER THE ACT IS AVAILABLE.
ARCADIA RESOURCES, INC.
PROMISSORY NOTE

$21,000,000.00   November 30, 2006

     FOR VALUE RECEIVED, the undersigned, Arcadia Resources, Inc., a Nevada
corporation (‘Payor”), having its executive office and principal place of
business at 26777 Central Park Boulevard, Suite 200, Southfield, Michigan 48076,
hereby promises to pay to JANA Master Fund, Ltd. (“Payee”), having an address at
200 Park Avenue, Suite 3300, New York, NY 10166, at Payee’s address set forth
above (or at such other place as Payee may from time to-time hereafter direct by
notice in writing to Payor), the principal sum of TWENTY-ONE MILLION DOLLARS
($21,000,000.00), in such coin or currency of the United States of America as at
the time shall be legal tender for the payment of public and private debts in
accordance with the terms hereof.

1.   Payment of Principal and Interest.

  1.1   The principal amount of this Note outstanding from time to time shall
bear simple interest at the annual rate (the “Note Rate”) equal to the One Year
Libor Rate (as such rate is published in the Wall Street Journal) plus seven and
one half percent (7.5%) from the date hereof (“Base Interest Rate”) until the
entire principal balance due under this Note has been paid in full; provided,
however, that in the event the entire principal balance due under this Note has
not been paid in full as of January 31, 2007, the Base Interest Rate shall
increase by 1% per month on the first day of each month beginning February 1,
2007, not to exceed a maximum aggregate increase of 5% in total.     1.2   The
unpaid principal balance shall be due and payable on January 31, 2008 (“Maturity
Date”). Accrued unpaid interest on the unpaid principal balance due under this
Note at the Note Rate shall be due and payable on the following dates:
December 31, 2006; March 31, 2007; June 30, 2007; September 30, 2007;
December 31, 2007; and the Maturity Date.     1.3   If Payor prepays any portion
of the principal amount due under this Note on or before December 30, 2006
(“Permitted Prepayment Date”), together with the unpaid interest thereon accrued
through the date of such prepayment, Payor shall pay a prepayment fee equal to
the One Year Libor Rate (as such rate is

Page 1 of 7

--------------------------------------------------------------------------------

 

      published in the Wall Street Journal on the date of such prepayment) plus
one and one-half percent (1.5%).     1.4   All payments (including prepayments)
made by the Payor on this Note shall be applied first to the payment of accrued
unpaid interest on this Note and then to the reduction of the unpaid principal
balance of this Note.     1.5   In the event that the date for the payment of
any amount payable under this Note falls due on a Saturday, Sunday or public
holiday under the laws of the State of New York, the time for payment of such
amount shall be extended to the next succeeding business day and interest at the
Note Rate shall continue to accrue on any principal amount so effected until the
payment thereof on such extended due date.

2.   Replacement of Note.

  2.1   In the event that this Note is mutilated, destroyed, lost or stolen,
Payor shall, at its sole expense, execute, register and deliver a new Note, in
exchange and substitution for this Note, if mutilated, or in lieu of and
substitution for this Note, if destroyed, lost or stolen. In the case of
destruction, loss or theft, Payee shall furnish to Payor indemnity reasonably
satisfactory to Payor, and in any such case, and in the case of mutilation,
Payee shall also furnish to Payor evidence to its reasonable satisfaction of the
mutilation, destruction, loss or theft of this Note and of the ownership
thereof. Any replacement Note so issued shall be in the same outstanding
principal amount as this Note and dated the date to which interest shall have
been paid on this Note or, if no interest shall have yet been paid, dated the
date of this Note.     2.2   Every Note issued pursuant to the provisions of
Section 2.1 above in substitution for this Note shall constitute an additional
contractual obligation of the Payor, whether or not this Note shall be found at
any time or be enforceable by anyone.

3.   Intentionally Omitted   4.   Covenants of Payor.       Payor, on behalf of
itself and its subsidiaries, covenants and agrees that, so long as this Note
remains outstanding and unpaid, in whole, or in part:

  4.1   Payor and its subsidiaries will not sell, transfer or dispose of, nor
permit or suffer the placement of any lien (statutory or other), priority,
security interest, encumbrance or any other preferential arrangement upon, any
of their material assets (including but not limited to real property and Payor’s
equity interests in such subsidiaries) without obtaining Payee’s written
consent, other than inventory in the ordinary course of business;     4.2  
Payor shall upon Payee’s request furnish Payee with monthly financial updates;  
  4.3   Payor and its subsidiaries will not pay any type of bonus to senior
executive

Page 2 of 7

--------------------------------------------------------------------------------

 

      officers unless Payor’s earnings before interest, taxes, depreciation and
amortization (“EBITDA”) for the fiscal year ending March 30, 2007 is greater
than Eleven Million Dollars ($11,000,000) or Payee otherwise gives its written
consent;     4.4   Payor and its subsidiaries will not engage in sale/lease back
transactions wherein real or personal property of Payor or its subsidiaries is
sold and then reacquired in any type of lease transaction if the aggregate
amount of all such transactions would exceed Five Million Dollars ($5,000,000);
    4.5   Payor and its subsidiaries will promptly pay and discharge all lawful
taxes, assessments and governmental charges or levies imposed upon any of them,
their income and profits, or any of their property, before the same shall become
in default, as well as all lawful claims for labor, materials and supplies
which, if unpaid, might become a lien or charge upon such properties or any part
thereof; provided, however, that Payor or such subsidiary shall not be required
to pay and discharge any such tax, assessment, charge, levy or claim so long as
the validity thereof shall be contested in good faith by appropriate proceedings
and Payor or such subsidiary, as the case may be, shall set aside on its books
adequate reserves with respect to any such tax, assessment, charge, levy or
claim so contested;     4.6   Payor and its subsidiaries will do or cause to be
done all things necessary to preserve and keep in full force and effect each of
their corporate existence, rights and franchises and substantially comply with
all laws applicable to them as their counsel may advise;     4.7   Except with
respect to any debt owing to Payee or the refinancing of any existing debt of
Payor and/or its subsidiaries owing to Payee, Payor and its subsidiaries will
not: (i) incur any obligation for borrowed money, any obligation evidenced by
bonds, notes or similar instruments (including any obligations incurred in the
acquisition of property, assets or business), any reimbursement obligation, any
deferred purchase price obligation, any guarantees of any such obligations, or
any similar obligations (collectively, “debt”) which is senior or pari passu to
the debt under this Note, or to which the debt under this Note would be
structurally subordinate, if such debt together with such existing debt of Payor
and its subsidiaries would exceed Twenty Five Million Dollars ($25,000,000),
without Payee’s consent or (ii) incur debt junior to the debt under this Note in
an aggregate amount which exceeds Twenty Five Million Dollars ($25,000,000),
other than to the extent such junior debt is issued to finance acquisitions in
the ordinary course of Payor or its subsidiaries’ business, without Payee’s
consent;     4.8   Payor and its subsidiaries will utilize the proceeds of any
sale of any of real or personal property for any of: (i) additional capital
expenditures, (ii) payment of any debt which is senior to the debt under this
Note, or (iii) the payment of debt arising under this Note;     4.9   Payor and
its subsidiaries will not issue any form of equity or other security

Page 3 of 7

--------------------------------------------------------------------------------

 

      (other than debt) in a public or private placement capital raise without
Payee’s consent;     4.10   Payor and its subsidiaries will at all times
maintain, preserve, protect and keep each of their property used or useful in
the conduct of business in good repair, working order and condition (except for
the effects of reasonable wear and tear in the ordinary course of business) and
will from time to time, make all necessary and proper repairs, renewals,
replacements, betterments and improvements thereto;     4.11   Payor and its
subsidiaries will keep adequately insured, by financially sound reputable
insurers, all property of a character usually insured by similar corporations
and carry such other insurance as is usually carried by similar corporations;  
  4.12   Payor will, promptly following the occurrence of an Event of Default or
of any condition or event which, with the giving of notice or the lapse of time
or both, would constitute an Event of Default, furnish a statement of Payor’s
Chief Executive Officer or Chief Financial Officer to Payee setting forth the
details of such Event of Default or condition or event and the action which
Payor intends to take with respect thereto; and     4.13   Payor will, and will
cause each of its subsidiaries to, at all times maintain books of account in
which all of its financial transactions are duly recorded in conformance with
generally accepted accounting principles.

5.   Events of Default. The following events each constitute an “Event of
Default”:

  5.1   The dissolution of Payor or any vote in favor thereof by the board of
directors and shareholders of Payor; or     5.2   Payor makes an assignment for
the benefit of creditors, or files with a court of competent jurisdiction an
application for appointment of a receiver or similar official with respect to it
or any substantial part of its assets, or Payor files a petition seeking relief
under any provision of the Federal Bankruptcy Code or any other federal or state
statute now or hereafter in effect affording relief to debtors, or any such
application or petition is filed against Payor, which application or petition is
not dismissed or withdrawn within sixty (60) days from the date of its filing;
or     5.3   Payor fails to pay the principal amount, or interest on, or any
other amount payable under this Note within five (5) days of when the same
becomes due and payable; or     5.4   Payor admits in writing its inability to
pay its debts as they mature; or     5.5   Payor sells all or substantially all
of its assets or merges or is consolidated with or into another corporation
other than a transaction whose primary purpose is to re-domicile the Payor ; or
    5.6   A proceeding is commenced to foreclose a security interest or lien in
any

Page 4 of 7

--------------------------------------------------------------------------------

 

      property or assets of Payor as a result of a default in the payment or
performance of any debt (in excess of $350,000 and secured by such     5.7  
property or assets) of Payor or of any subsidiary of Payor; or 5.7 A final
judgment for the payment of money in excess of $350,000 is entered against Payor
by a court of competent jurisdiction, and such judgment is not discharged (nor
the discharge thereof duly provided for) in accordance with its terms, nor a
stay of execution thereof procured, within sixty (60) days after the date such
judgment is entered, and, within such period (or such longer period during which
execution of such judgment is effectively stayed), an appeal therefrom has not
been prosecuted and the execution thereof caused to be stayed during such
appeal; or     5.8   An attachment or garnishment is levied against the assets
or properties of Payor or any subsidiary of Payor involving an amount in excess
of $350,000 and such levy is not vacated, bonded or otherwise terminated within
sixty (60) days after the date of its effectiveness; or     5.9   Payor or any
subsidiary defaults in the due observance or performance of any covenant,
condition or agreement to be observed or performed pursuant to the terms of this
Note (other than the default specified in Section 5.3 above) and such default
continues uncured for a period of thirty (30) days from the date Payor receives
written notice from the Payee; or

    Upon the occurrence of any such Event of Default and at any time thereafter,
the holder of this Note shall have the right (at such holder’s option) to
declare the principal of, accrued unpaid interest on, and all other amounts
payable under this Note to be forthwith due and payable, whereupon all such
amounts shall be immediately due and payable to the holder of this Note, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived; provided.   6.   Suits for Enforcement and Remedies.

  6.1   If any one or more Events of Default shall occur and be continuing, the
Payee may proceed to (1) protect and enforce Payee’s rights either by suit in
equity or by action at law, or both, whether for the specific performance of any
covenant, condition or agreement contained in this Note or in any agreement or
document referred to herein or in aid of the exercise of any power granted in
this Note or in any agreement or document referred to herein, (ii) enforce the
payment of this Note, or (iii) enforce any other legal or equitable right of the
holder of this Note. No right or remedy herein or in any other agreement or
instrument conferred upon the holder of this Note is intended to be exclusive of
any other right or remedy, and each and every such right or remedy shall be
cumulative and shall be in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise.

Page 5 of 7

--------------------------------------------------------------------------------

 

7.   Unconditional Obligation; Fees, Waivers, Other.

  7.1   The obligation to make the payments provided for in this Note are
absolute and unconditional and are not subject to any defense, set-off,
counterclaim, rescission, recoupment or adjustment whatsoever.     7.2   If,
following the occurrence of an Event of Default, Payee shall seek to enforce the
collection of any amount of principal of and/or interest on this Note, there
shall be immediately due and payable from Payor, in addition to the then unpaid
principal of, and accrued unpaid interest on, this Note, all reasonable costs
and expenses incurred by Payee in connection therewith, including, without
limitation, reasonable attorneys’ fees and disbursements.     7.3   No
forbearance, indulgence, delay or failure to exercise any right or remedy with
respect to this Note shall operate as a waiver or as an acquiescence in any
default, nor shall any single or partial exercise of any right or remedy
preclude any other or further exercise thereof or the exercise of any other
right or remedy.     7.4   This Note may not be modified or discharged (other
than by payment) except by a writing duly executed by Payor and Payee.     7.5  
Payor hereby expressly waives demand and presentment for payment, notice of
nonpayment, notice of dishonor, protest, notice of protest, bringing of suit,
and diligence in taking any action to collect amounts called for hereunder, and
shall be directly and primarily liable for the payment of all sums owing and to
be owing hereon, regardless of and without any notice, diligence, act or
omission with respect to the collection of any amount called for hereunder or in
connection with any right, lien, interest or property at any and all times which
Payee had or is existing as security for any amount called for hereunder.

8.   Intentionally Deleted.   9.   Intentionally Deleted.   10.   Intentionally
Deleted.   11.   Miscellaneous.

  11.1   The headings of the various paragraphs of this Note are for convenience
of reference only and shall in no way modify any of the terms or provisions of
this Note.     11.2   All notices required or permitted to be given hereunder
shall be in writing and shall be deemed to have been duly given when personally
delivered or sent by registered or certified mail (return receipt requested,
postage prepaid), facsimile transmission or overnight courier to the address of
the intended recipient as set forth in the preamble to this Note or at such
other address as the intended recipient shall have hereafter given to the other
party hereto pursuant to the provisions of this Note.

Page 6 of 7

--------------------------------------------------------------------------------

 

  11.3   This Note and the obligations of Payor and the rights of Payee shall be
governed by and construed in accordance with the substantive laws of the State
of New York without giving effect to the choice of laws rules thereof.     11.4
  This Note shall bind Payor and its successors and assigns.     11.5   This
Note amends, supersedes and restates in its entirety that certain Note dated
June 29, 2006, given by Payor to Payee, in the principal amount of $15 million
(the “June 29, 2006 Note”), which June 29, 2006 Note is hereby rendered null and
void.

            ARCADIA RESOURCES, INC.
      By:   /s/ John E. Elliott, II         John E. Elliott, II        Its:
Chief Executive Officer     

Accepted and Agreed to:
JANA MASTER FUND, LTD.
By: Its Investment Advisor, JANA Partners LLC

         
By:
  /s/ Marc Lehmann
 
Marc Lehmann    
 
       
Its:
  Partner    

Page 7 of 7