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                             ARCADIA SERVICES, INC.
                                 GRAYROSE, INC.
                    ARCADIA HEALTH SERVICES OF MICHIGAN, INC.
                          ARCADIA HEALTH SERVICES, INC.

                                CREDIT AGREEMENT

                             DATED AS OF MAY 7, 2004

                                  COMERICA BANK
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                                 Execution Copy



<PAGE>

                                CREDIT AGREEMENT


     THIS  LOAN  AGREEMENT,  made as of the 7th day of May,  2004,  by and among
ARCADIA  SERVICES,  INC., a Michigan  corporation  ("Arcadia"),  ARCADIA  HEALTH
SERVICES,  INC., a Michigan corporation  ("Arcadia Health Services"),  GRAYROSE,
INC.,  a Michigan  corporation  ("Grayrose")  and  ARCADIA  HEALTH  SERVICES  OF
MICHIGAN,  INC., a Michigan  corporation  ("Arcadia  Health" and  together  with
Arcadia,  Arcadia Health Services and Grayrose, being collectively identified as
"Companies"  and  individually  as a "Company")  and  Comerica  Bank, a Michigan
banking corporation, of Detroit, Michigan (herein called "Bank");

                                    RECITALS:

     A. Companies desire to obtain certain credit facilities from Bank.

     B. Bank is willing to extend such credit facilities to Companies,  but only
on the terms and conditions provided below.

     NOW, THEREFORE, Bank and Companies agree as follows:

     WITNESSETH:

1. DEFINITIONS

     For the  purposes  of this  Agreement  the  following  terms  will have the
following meanings:

     "Advance"  shall mean a borrowing  requested by Companies  and made by Bank
under Section 2 of this  Agreement,  including any refunding or  conversions  of
such   borrowings   pursuant  to  Section  3.3  hereof,   and  shall  include  a
Eurodollar-based Advance and a Prime-based Advance.

     "Advance Formula Agreement" shall mean the Advance Formula Agreement in the
form of Exhibit "A" to this Agreement, as may be amended, restated, supplemented
or replaced from time to time.

     "Addus" shall mean Addus HealthCare, Inc., an Illinois corporation.

     "Affiliate"  shall  mean,  with  respect to any  Person,  any other  Person
directly or indirectly  controlling  (including but not limited to all directors
and  executive  officers  of such  Person),  controlled  by, or under  direct or
indirect common control with such Person.  A Person shall be deemed to control a
corporation  for the  purposes  of this  definition  if such  Person  possesses,
directly  or  indirectly,  the power  (i) to vote 10% or more of the  securities
having ordinary  voting power for the election of directors of such  corporation
or (ii) to direct or cause the direction of the  management and policies of such
corporation,  whether through the ownership of voting securities, by contract or
otherwise.


<PAGE>

     "Alternate  Base  Rate"  shall  mean for any day a rate per annum  (rounded
upwards, if necessary, to the next higher 1/16 of 1%) equal to the Federal Funds
Effective Rate in effect on such day plus one percent (1%).

     "Applicable Interest Rate" shall mean the Eurodollar-based  Rate and/or the
Prime-based Rate.

     "Business  Day" shall mean any day on which  commercial  banks are open for
domestic and international  business (including dealings in foreign exchange) in
Detroit, London and New York.

     "Capital  Expenditure"  shall mean, without  duplication,  any payment made
directly  or  indirectly  for the purpose of  acquiring  or  constructing  fixed
assets,  real property or equipment which in accordance with GAAP would be added
as a debit to the fixed asset  account of the person  making  such  expenditure,
including,  without  limitation,  amounts paid or payable under any  conditional
sale or other title  retention  agreement  or under any lease or other  periodic
payment  arrangement  which is of such a nature that payment  obligations of the
lessee or obligor thereunder would be required by generally accepted  accounting
principles to be  capitalized  and shown as  liabilities on the balance sheet of
such lessee or obligor.

     "Capital  Lease"  shall  mean any  lease  of any  property  (whether  real,
personal or mixed) by a Person as lessee which,  in conformity with GAAP, is, or
is required to be accounted  for as a capital lease on the balance sheet of such
Person,  together with any renewals of such leases (or entry into new leases) on
substantially similar terms.

     "Consolidated"  or  "Consolidating"  shall, when used with reference to any
financial information  pertaining to (or when used as a part of any defined term
or  statement  pertaining  to  the  financial  condition  of)  Arcadia  and  its
Subsidiaries,  mean the accounts of Arcadia and its Subsidiaries determined on a
consolidated  or  consolidating  basis, as the case may be, all determined as to
principles of consolidation  and, except as otherwise  specifically  required by
the  definition  of such term or by such  statements,  as to such  accounts,  in
accordance with generally accepted accounting principles applied on a consistent
basis and consistent  with the financial  statements,  if any, as at and for the
fiscal year ended December 31, 2003.

     "Debt" shall mean as of any applicable time of determination  thereof,  the
total  liabilities  of a Person at such time, as  determined in accordance  with
GAAP.

     "Default" shall mean an event which with the giving of notice or passage of
time or both would constitute an Event of Default.

     "Environmental Laws" shall mean all federal, state and local laws including
statutes,   regulations,   ordinances,  codes,  rules,  and  other  governmental
restrictions   and   requirements,    relating   to   environmental   pollution,
contamination  or other  impairment of the environment or any hazardous or toxic
substances  of any nature.  These  Environmental  Laws shall  include but not be
limited to the Federal Solid Waste  Disposal Act, the Federal Clean Air Act, the
Federal Clean Water Act, the Federal  Resource  Conservation and Recovery Act of
1976,  the  Federal  Comprehensive  Environmental  Response,   Compensation  and
Liability Act of 1980, and the Federal Superfund  Amendments and Reauthorization
Act of 1986.



<PAGE>

     "ERISA" shall mean the Employee  Retirement Income Security Act of 1974, as
amended, or any successor act or code.

     "Eurodollar-based  Advance"  shall mean an Advance which bears  interest at
the Eurodollar-based Rate.

     "Eurodollar-based Rate" shall mean a per annum interest rate which is equal
to the sum of three percent (3%) plus the quotient of:

     (a)  the per annum interest rate at which Bank's Eurodollar  Lending Office
          offers  deposits to prime banks in the eurodollar  market in an amount
          comparable  to  the  relevant  Eurodollar-based  Advance  or  relevant
          principal  portion  of the Term  Loan  and for a  period  equal to the
          relevant Interest Period at approximately  11:00 a.m. Detroit time two
          (2)  Business  Days  prior to the first day of such  Interest  Period;
          divided by

     (b)  a  percentage  equal to 100%  minus the  maximum  rate on such date at
          which  Bank  is  required  to  maintain   reserves  on  "Euro-currency
          Liabilities"  as defined in and pursuant to  Regulation D of the Board
          of Governors of the Federal  Reserve System or, if such  regulation or
          definition  is  modified,  and as long as Bank is required to maintain
          reserves against a category of liabilities  which includes  eurodollar
          deposits or includes a category of assets  which  includes  eurodollar
          loans,  the rate at which such  reserves are required to be maintained
          on such category;

all as  conclusively  determined  by Bank,  such sum to be  rounded  upward,  if
necessary, to the nearest whole multiple of 1/16th of 1%.

     "Eurodollar  Lending  Office"  shall mean  Bank's  office  located at Grand
Cayman,  British West Indies or such other branch of Bank,  domestic or foreign,
as it may  hereafter  designate as its  Eurodollar  Lending  Office by notice to
Companies.

     "Event of  Default"  shall mean any of the Events of Default  specified  in
Section 10 hereof.

     "Federal  Funds  Effective  Rate"  shall mean,  for any day, a  fluctuating
interest rate per annum equal to the weighted  average of the rates on overnight
Federal funds  transactions  with members of the Federal Reserve System arranged
by Federal  funds  brokers,  as published for such day (or, if such day is not a
Business Day, for the next preceding  Business Day) by the Federal  Reserve Bank
of New  York,  or,  if such  rate is not so  published  for any day  which  is a
Business Day, the average of the  quotations  for such day on such  transactions
received  by Bank from  three  Federal  funds  brokers  of  recognized  standing
selected by it.

     "Fixed Charge Coverage Ratio" shall mean as of any date of determination, a
ratio,  the  numerator  which shall be Net Income of the  Companies for the four
quarter  period  ending on such  date,  plus  Companies'  consolidated  non-cash
expenses for such period,  and the  denominator of which shall be the sum of the
aggregate  principal and interest  payments paid or due and payable by Companies
or any of them within such period,  plus Companies'  Capital  Expenditures  (but
excluding  any  capital  expenditure  funded  with the  proceeds  of cash equity
contributions)  during such period, all as determined on a consolidated basis in
accordance with GAAP.

<PAGE>

     "GAAP" shall mean, as of any applicable  date of  determination,  generally
accepted accounting principles consistently applied, as in effect on the date of
this Agreement.

     "Guarantors" shall mean the Individual Guarantors, the Parent Guarantor and
each other Person  who/which on or after the date hereof  executes a Guaranty in
favor of Bank and "Guarantor" shall mean any of them.

     "Guaranty"  shall mean any Guaranty by a Guarantor of the  Indebtedness  in
form  and  substance  acceptable  to  Bank,  as  amended  from  time to time and
"Guaranties" means all of them.

     "Indebtedness" shall mean all loans,  advances,  indebtedness,  obligations
and  liabilities  of Companies to Bank under this  Agreement,  together with all
other indebtedness,  obligations and liabilities whatsoever of Companies to Bank
whether or not arising under or in connection with the Loan  Documents,  whether
matured or unmatured,  liquidated or unliquidated,  direct or indirect, absolute
or contingent, joint or several, due or to become due, now existing or hereafter
arising.

     "Individual  Guarantors" shall mean John E. Elliott II, Lawrence R. Kuhnert
and each other individual which hereafter executes a Guaranty in favor of Bank.

     "Interest Period" shall mean with respect to any  Eurodollar-based  Advance
or election of a Eurodollar-based Rate, a period of two (2) months (or any other
period  of time  agreed  to by  Companies  and Bank) as  selected  by  Companies
pursuant  to  the  provisions  of  this  Agreement   commencing  on  the  day  a
Eurodollar-based Advance is made, or on the effective date of an election of the
Eurodollar-based Rate made under Section 3.

     "Loan Documents"  shall mean  collectively,  this Agreement,  the Note, the
Guaranties,  the Security  Agreements,  the Stock  Pledge,  the Advance  Formula
Agreement,  the Subordination  Agreement and any other instruments or agreements
executed at any time pursuant to or in connection with any such documents.

     "Net Income"  shall mean, as of any date of  determination,  the net income
(or  loss)  of a  Person  for the  four  quarter  period  ending  on the date of
determination, as determined in accordance with GAAP.

     "Note" shall mean the Revolving Credit Note.

     "Ordinary Course Liens" shall mean with respect to any Person:

     (a)  liens for taxes not yet due and  payable or which are being  contested
          in good faith by appropriate proceedings diligently pursued,  provided
          that  provision for the payment of all such taxes has been made on the
          books of such Person as may be required by GAAP;

<PAGE>



     (b)  mechanics',  materialmen's,  banker's,  carriers',  warehousemen's and
          similar  liens and  encumbrances  arising  in the  ordinary  course of
          business and securing  obligations of such Person that are not overdue
          for a period of more than 60 days or are being contested in good faith
          by appropriate  proceedings  diligently pursued,  provided that in the
          case  of any  such  contest  (i)  any  proceedings  commenced  for the
          enforcement  of such  liens  and  encumbrances  shall  have  been duly
          suspended;  and (ii) such  provision for the payment of such liens and
          encumbrances  has  been  made on the  books of such  Person  as may be
          required by GAAP;

     (c)  liens arising in connection with worker's  compensation,  unemployment
          insurance,  old age pensions and social security  benefits and similar
          statutory  obligations which are not overdue or are being contested in
          good faith by appropriate  proceedings  diligently  pursued,  provided
          that in the case of any such contest (i) any proceedings commenced for
          the enforcement of such liens shall have been duly suspended; and (ii)
          such  provision  for the  payment  of such  liens has been made on the
          books of such Person as may be required by GAAP;

     (d)  (i) liens  incurred in the  ordinary  course of business to secure the
          performance  of  statutory  obligations  arising  in  connection  with
          progress  payments or advance  payments due under  contracts  with the
          United  States  government or any agency  thereof  entered into in the
          ordinary  course of business and (ii) liens  incurred or deposits made
          in the  ordinary  course of  business  to secure  the  performance  of
          statutory obligations, bids, leases, fee and expense arrangements with
          trustees and fiscal agents and other similar obligations (exclusive of
          obligations  incurred in connection  with the borrowing of money,  any
          lease-purchase  arrangements  or the payment of the deferred  purchase
          price of property),  provided  that full  provision for the payment of
          all such  obligations  set forth in clauses (i) and (ii) has been made
          on the books of such Person as may be required by GAAP; and

     (e)  minor  survey   exceptions   or  minor   encumbrances,   easements  or
          reservations,  or rights of others for  rights-of-way,  utilities  and
          other similar purposes,  or zoning or other restrictions as to the use
          of  real  properties,  which  do not  materially  interfere  with  the
          business of such Person.

     "Overformula Amount" is defined in the Advance Formula Agreement.

     "Parent Guarantor" shall mean RKDA, Inc., a Michigan  corporation,  and its
successors and assigns.

     "Person" or "person" shall mean any individual,  corporation,  partnership,
joint venture,  limited liability company,  association,  trust,  unincorporated
association,   joint  stock   company,   government,   municipality,   political
subdivision or agency, or other entity.

     "Prime Rate" shall mean the per annum interest rate  established by Bank as
its prime rate for its borrowers as such rate may vary from time to time,  which
rate is not necessarily the lowest rate on loans made by Bank at any such time.


<PAGE>


     "Prime-based  Advance"  shall mean an Advance  which bears  interest at the
Prime-based Rate.

     "Prime-based  Rate" shall mean for any day a per annum  interest rate which
is the greater of (i) the Prime Rate or (ii) the Alternate Base Rate.

     "Request  for Advance"  shall mean a Request for Advance  issued by Company
under this Agreement in the form annexed to this Agreement as Exhibit "B".

     "Revolving  Credit" shall mean the revolving  credit facility  described in
Section 2 of this Agreement.

     "Revolving  Credit  Commitment  Amount" shall mean Twelve  Million  Dollars
($12,000,000).

     "Revolving Credit Maturity Date" shall mean May 7, 2006.

     "Revolving Credit Note" shall mean the Note described in Section 2.1 hereof
made by Companies to Bank in the form annexed to this Agreement as Exhibit "C".

     "Security Agreements" is defined in Section 5.2.

     "Stock Pledge" shall mean the Security Agreement (Negotiable Collateral) in
the form annexed hereto as Exhibit "E" under which the Parent Guarantor and each
other Person which becomes a holder of capital  stock of Arcadia,  grants Bank a
first priority  security  interest in all of the issued and outstanding  capital
stock of Arcadia,  as may be amended,  restated,  supplemented  or replaced from
time to time.

     "Stock Purchase Agreement" shall mean that certain Stock Purchase Agreement
dated May 7, 2004, among Parent Guarantor,  Arcadia, Addus and W. Andrew Wright,
without  taking into account any  amendments  thereto not approved in writing by
Bank.

     "Subordinated Debt" shall mean, as of any applicable time of determination,
any Debt of  Companies  (or any of them)  which is  subordinated  in priority of
payment or other terms to any of the  indebtedness of Companies (or any of them)
to Bank, in each case, pursuant to a Subordination Agreement.

     "Subordination  Agreement"  shall  mean a written  agreement  executed  and
delivered  by the  holder  of  Subordinated  Debt  to,  and in form  and  detail
satisfactory to, Bank.

     "Subsidiary"  shall mean a  corporation  or other entity of which more than
fifty percent (50%) of the outstanding voting stock or other equity interests is
owned  by a  Company,  either  directly  or  indirectly,  through  one  or  more
intermediaries.

     "Tangible  Effective  Net Worth" shall mean, as of any  applicable  date of
determination,  Tangible  Net Worth as of such date plus an amount  equal to the
outstanding principal amount of the Subordinated Debt as of such date.

<PAGE>


     "Tangible Net Worth" shall mean as of any applicable time of  determination
thereof, the excess of (i) the net book value of the assets of Companies at such
time (excluding  receivables from officers,  directors,  employees or affiliates
and excluding  patents,  patent  rights,  trademarks,  trade names,  franchises,
copyrights,  licenses,  goodwill and all other intangible assets of Companies at
such time), after all appropriate deductions in accordance with GAAP (including,
without   limitation,   reserves   for   doubtful   receivables,   obsolescence,
depreciation and amortization), over (ii) the sum of the total Debt of Companies
at such time, all as determined in accordance with GAAP.

2. THE INDEBTEDNESS: Revolving Credit; Fees

     2.1 Bank agrees to make  Advances to  Companies  from time to time from the
effective  date hereof until the Revolving  Credit  Maturity Date, not to exceed
the lesser of the Revolving Credit Commitment  Amount, as in effect from time to
time,  or the  amount  of  indebtedness  permitted  under  the  Advance  Formula
Agreement in aggregate principal amount at any one time outstanding.  All of the
Advances under the Revolving  Credit shall be evidenced by the Revolving  Credit
Note under which advances, repayments and readvances may be made, subject to the
terms and conditions of this Agreement.

     2.2 The Revolving Credit Note shall mature on the Revolving Credit Maturity
Date and each  Advance  from  time to time  outstanding  thereunder  shall  bear
interest at its  Applicable  Interest Rate. The amount and date of each Advance,
its Applicable Interest Rate, its Interest Period, if applicable, and the amount
and date of any repayment shall be noted on Bank's  records,  which records will
be conclusive evidence thereof absent manifest error.

     2.3 Companies  may request an Advance  under the Revolving  Credit upon the
delivery to Bank of a Request for Advance  executed by an authorized  officer of
Arcadia, subject to the following:

     (a)  each such Request for Advance shall set forth the information required
          on the Request for Advance form annexed hereto as Exhibit "B";

     (b)  each such Request for Advance shall be delivered to Bank by 11:00 a.m.
          Detroit  time  on the  proposed  date  of  Advance  in the  case  of a
          Prime-based  Advance  and by  11:00  a.m.  Detroit  time on the  third
          Business Day  preceding  the proposed date of Advance in the case of a
          Eurodollar-based Advance;

     (c)  the  principal  amount  of  such  Advance,  plus  the  amount  of  any
          outstanding indebtedness to be then combined therewith having the same
          Applicable  Interest Rate and Interest Period, if any, shall be in the
          case of a  Eurodollar-based  Advance at least $1,000,000 or any larger
          amount in $500,000 increments;

     (d)  a Request for  Advance,  once  delivered to Bank,  shall not,  without
          Bank's consent, be revocable by Companies;

     (e)  no more than  five (5)  Interest  Periods  may be in effect at any one
          time for Eurodollar-based Advances.


<PAGE>

     Bank may,  at its  option,  lend  under this  Section 2 upon the  telephone
request of an  authorized  officer of Arcadia  and,  in the event Bank makes any
such advance upon a telephone  request,  the  requesting  officer  shall,  if so
requested by Bank,  mail to Bank, on the same day as such telephone  request,  a
Request  for  Advance in the form  attached  as Exhibit  "B".  Companies  hereby
authorize  Bank to  disburse  advances  under  this  Section 2  pursuant  to the
telephone  instructions of any person purporting to be an authorized  officer of
Arcadia and Companies  shall bear all risk of loss resulting from  disbursements
made upon any telephone  request.  Each  telephone  request for an Advance shall
constitute a  certification  of the matters set forth in the Request for Advance
form as of the date of such requested Advance.


     2.4 The initial  Advance shall be in the amount of $11,500,000 and shall be
used to make a dividend or  distribution  to the Parent  Guarantor to finance or
refinance the  acquisition  of the stock of Arcadia from Addus.  The proceeds of
all other  Advances  under the  Revolving  Credit  Note shall be used solely for
working capital purposes.

     2.5 The aggregate  principal amount at any one time  outstanding  under the
Revolving  Credit Note shall  never  exceed the formula set forth in the Advance
Formula Agreement or in any Advance Formula Agreement  delivered by Companies to
Bank in substitution  therefor.  Companies shall  immediately  make all payments
necessary to comply with this provision.

     2.6 In consideration of the Revolving  Credit,  Companies shall pay Bank an
annual,  non-refundable,  commitment  fee which fee for the first  year shall be
deemed fully earned by Bank upon  execution of this  Agreement by Companies  and
Bank.  The  commitment fee for the first year of the loan shall be in the amount
of $50,000  and shall be payable in twelve  monthly  installments  of  $4,166.67
each,  commencing on the date of this Agreement and on the first Business Day of
each month  thereafter.  The commitment fee for each subsequent year of the loan
shall be earned at the  commencement of such subsequent year and shall be in the
amount of $10,000 and shall be due and payable on May 7 of each year  commencing
May 7, 2005, until the Revolving Credit Maturity Date.

     2.7 Companies agree to pay Bank a non-refundable, unused fee on the average
daily  balance of the unused  portion  of the  Revolving  Credit at the rate per
annum  equal to one  eighth  of one  percent  (.125%)  of the  Revolving  Credit
Commitment  Amount for the average  number of days  elapsed  using a year of 360
days.  The  commitment  fee shall be payable  quarterly  in arrears on the first
Business Day of each March,  June,  September and December,  commencing  June 1,
2004, and on the Revolving Credit Maturity Date.

     2.8 Companies shall pay Bank a  non-refundable  Overformula fee of $22,500,
payable in twelve monthly installments of $1,875 each, commencing on the date of
this Agreement and on the first Business Day of each month thereafter, which fee
shall be deemed  fully  earned  by Bank  upon  execution  of this  Agreement  by
Companies and Bank.

<PAGE>


3. INTEREST, INTEREST PERIODS, CONVERSIONS, PREPAYMENTS.

     3.1 Advances  under the Revolving  Credit shall bear interest from the date
thereof on the unpaid principal  balance thereof from time to time  outstanding,
at a rate per annum equal to the Prime-based Rate or the Eurodollar-based  Rate,
as the  Companies may elect subject to the  provisions of this  Agreement.  With
respect to Prime-based Advances, interest shall be payable monthly in arrears on
the first  Business  Day of each  month,  commencing  on April 1,  2004,  and at
maturity. With respect to Eurodollar-based  Advances,  interest shall be payable
in arrears on the last day of each Interest Period applicable thereto, provided,
however, if such Interest Period is longer than three months,  interest shall be
payable three months  following the first day of such Interest Period and on the
last day of such Interest Period.  Notwithstanding the foregoing, from and after
the  occurrence  of any Event of  Default  and solely  during  the  continuation
thereof,  the Advances  shall bear  interest,  payable on demand,  at a rate per
annum equal to: (i) in the case of  Prime-based  Advances,  three  percent  (3%)
above the Prime-based Rate; and (ii) in the case of  Eurodollar-based  Advances,
three percent (3%) above the rate which would otherwise be applicable under this
Section 3.1 until the end of the then  current  Interest  Period,  at which time
such Advance  shall bear interest at the rate provided for in clause (i) of this
Section 3.1.  Interest on all Advances shall be calculated on the basis of a 360
day year for the actual number of days elapsed, except that interest accruing at
the  Eurodollar-based  Rate  shall be  assessed  for the  actual  number of days
elapsed from the first day of the  Interest  Period  applicable  thereto but not
including  the  last  day  thereof.  The  interest  rate  with  respect  to  any
Prime-based  Advance  shall  change on the  effective  date of any change in the
Prime-based Rate.

     3.2 Each Interest Period for a  Eurodollar-based  Advance shall commence on
the date such  Eurodollar-based  Advance is made or is converted from an Advance
of  another  type  pursuant  to  Section  3.3  hereof  or on the last day of the
immediately  preceding Interest Period for such  Eurodollar-based  Advance,  and
shall end on the date one,  two or three  months  thereafter  (or any other date
agreed to by Companies and Bank), as the Companies may elect as set forth below,
subject to the following:

     (i)  no Interest  Period shall extend beyond the Revolving  Credit Maturity
          Date; and

     (ii) any Interest  Period which would otherwise end on a day which is not a
          Business  Day shall be extended to the next  succeeding  Business  Day
          unless the next  succeeding  Business  Day falls in  another  calendar
          month,   in  which  case,  such  Interest  Period  shall  end  on  the
          immediately  preceding Business Day and when an Interest Period begins
          on a day which has no  numerically  corresponding  day in the calendar
          month during which such Interest Period is to end, it shall end on the
          last Business Day of such calendar month.

The  Companies  shall  elect  the  initial  Interest  Period   applicable  to  a
Eurodollar-based  Advance by its Request for Advance  given to the Bank pursuant
to Section  2.3 or by its notice of  conversion  given to the Bank  pursuant  to
Section 3.3, as the case may be.  Provided  that no Event of Default  shall have
occurred and be continuing,  the Companies may elect to continue an Advance as a
Eurodollar-based   Advance  by  giving   irrevocable   written,   telephonic  or
telegraphic  notice thereof to the Bank, before 11:00 a.m. on the third Business
Day  immediately  preceding  the last day of the then  current  Interest  Period
applicable  to such  Eurodollar-based  Advance,  specifying  the duration of the
succeeding Interest Period therefor.  If the Bank does not receive timely notice
of the election and the Interest Period elected by the Companies,  the Companies
shall be deemed to have  elected to convert such  Eurodollar-based  Advance to a
Prime-based Advance at the end of the then current Interest Period.

<PAGE>



     3.3  Provided  that  no  Event  of  Default  shall  have  occurred  and  be
continuing,  the  Companies  may, on any Business Day,  convert any  outstanding
Advance into an Advance of another type in the same aggregate  principal amount,
provided that any conversion of a Eurodollar-based Advance shall be made only on
the last  Business Day of the then current  Interest  Period  applicable to such
Advance.  If the Companies desire to convert an Advance,  it shall give the Bank
written,   telephonic  or  telegraphic  notice,  specifying  the  date  of  such
conversion,  the Advances to be converted,  the type of Advance  elected and, if
the  conversion is into a  Eurodollar-based  Advance,  the duration of the first
Interest Period therefor,  which notice shall be given not later than 11:00 a.m.
Detroit time on the applicable date of conversion in the case of conversion to a
Prime-based  Advance  and not later than 11:00  a.m.  Detroit  time on the third
Business  Day  immediately  preceding  the  date of  conversion  in the  case of
conversion to a Eurodollar-based Advance.

     3.4  Companies  may  prepay all or part of the  outstanding  balance of the
Prime-based  Advance(s)  under the Note at any time without  premium or penalty.
Upon three (3) Business Days' prior notice to Bank,  Companies may prepay all or
part of any  Eurodollar-based  Advance,  provided  that the  amount  of any such
partial  prepayment  shall be at least  $250,000 and the unpaid  portion of such
Advance which is refunded or converted under Section 3.3 shall be subject to the
limitations of Section  2.3(c).  Any prepayment of a Prime-based  Advance or any
prepayment of a Eurodollar-based  Advance on the last day of the Interest Period
therefor made in accordance with this Section shall be without premium,  penalty
or prejudice to Companies'  right to reborrow under the terms of this Agreement.
Any other  prepayment  shall be subject to the provisions of Section 4.1 hereof.

4. SPECIAL PROVISIONS, CHANGES IN CIRCUMSTANCES AND YIELD PROTECTION.

     4.1 If  Companies  make  any  payment  of  principal  with  respect  to any
Eurodollar-based  Advance  on any day  other  than the last day of the  Interest
Period applicable thereto (whether voluntarily, by acceleration,  or otherwise),
or if Companies  fail to borrow any  Eurodollar-based  Advance  after notice has
been given by Companies to Bank in accordance  with the terms hereof  requesting
such Advance,  or if Companies fail to make any payment of principal or interest
when due in respect of a  Eurodollar-based  Advances,  Companies shall reimburse
Bank on demand for any  resulting  loss,  cost or expense  incurred by Bank as a
result thereof,  including,  without limitation,  any such loss, cost or expense
incurred in obtaining, liquidating, employing or redeploying deposits from third
parties,  whether  or not Bank  shall  have  funded  or  committed  to fund such
Advance.  Such  amount  payable  by  Companies  to  Bank  may  include,  without
limitation, an amount equal to the excess, if any, of (a) the amount of interest
which would have accrued on the amount so prepaid, or not so borrowed,  refunded
or converted, for the period from the date of such prepayment or of such failure
to borrow,  refund or  convert,  through the last day of the  relevant  Interest
Period,  at the applicable rate of interest for said  Advance(s)  provided under
this  Agreement,  over (b) the amount of interest (as  reasonably  determined by
Bank) which would have  accrued to Bank on such amount by placing such amount on
deposit for a comparable  period with leading banks in the interbank  eurodollar
market. Calculation of any amounts payable to Bank under this paragraph shall be
made as though Bank shall have actually funded or committed to fund the relevant
Eurodollar-based  Advance  through the purchase of an  underlying  deposit in an
amount equal to the amount of such Advance and having a maturity  comparable  to
the  relevant  Interest  Period;  provided,  however,  that  Bank  may  fund any
Eurodollar-based   Advance  in  any  manner  it  deems  fit  and  the  foregoing
assumptions shall be utilized only for the purpose of the calculation of amounts
payable under this paragraph.  Upon the written request of Companies, Bank shall
deliver to Companies a certificate  setting forth the basis for determining such
losses,  costs and expenses,  which certificate  shall be conclusively  presumed
correct, absent manifest error.


<PAGE>


     4.2 For any Interest  Period for which the Applicable  Interest Rate is the
Eurodollar-based Rate, if Bank shall designate a Eurodollar Lending Office which
maintains  books  separate  from those of the rest of Bank,  Bank shall have the
option of  maintaining  and carrying  the relevant  Advance on the books of such
Eurodollar Lending Office.

     4.3 If with  respect to any Interest  Period,  Bank  reasonably  determines
that, by reason of  circumstances  affecting the foreign  exchange and interbank
markets  generally,  deposits in Eurodollars  in the applicable  amounts are not
being offered to the Bank for such Interest  Period,  then Bank shall  forthwith
give notice thereof to the Companies.  Thereafter, until Bank notifies Companies
that  such  circumstances  no  longer  exist,  the  obligation  of  Bank to make
Eurodollar-based  Advances,  and the right of Companies to convert an Advance to
or refund an Advance as a Eurodollar-based Advance shall be suspended.

     4.4 If, after the date hereof,  the introduction or  implementation  of, or
any change in, any applicable  law, rule or regulation or in the  interpretation
or  administration  thereof  by any  governmental  authority  charged  with  the
interpretation  or  administration  thereof,  or  compliance  by  Bank  (or  its
Eurodollar  Lending Office) with any request or directive (whether or not having
the force of law) of any such  authority,  shall make it unlawful or  impossible
for the  Bank (or its  Eurodollar  Lending  Office)  to  honor  its  obligations
hereunder  to make or maintain any Advance,  Bank shall  forthwith  give written
notice  thereof to Companies.  Thereafter  (a) the  obligations  of Bank to make
Eurodollar-based  Advances  and the right of  Companies to convert an Advance or
refund  an  Advance  as  a  Eurodollar-based  Advance  shall  be  suspended  and
thereafter  Companies may select as Applicable  Interest  Rates only those which
remain  available,  and (b) if Bank may not  lawfully  continue  to  maintain an
Advance to the end of the then current Interest Period applicable  thereto,  the
Prime-based Rate shall be the Applicable Interest Rate for the remainder of such
Interest Period.

     4.5 If the  adoption  or  implementation  after the date  hereof of, or any
change after the date hereof in, any  applicable  law, rule or regulation of any
governmental  authority,  central  bank or  comparable  agency  charged with the
interpretation  or  administration  thereof,  or  compliance  by  Bank  (or  its
Eurodollar  Lending Office) with any request or directive (whether or not having
the force of law) made by any such authority,  central bank or comparable agency
after the date hereof:

     (a)  shall subject Bank (or its Eurodollar Lending Office) to any tax, duty
          or other  charge  with  respect  to any  Advance  or the Note or shall
          change the basis of taxation  of  payments to Bank (or its  Eurodollar
          Lending  Office) of the principal of or interest on any Advance or the
          Note or any other amounts due under this Agreement in respect  thereof
          (except  for  changes in the rate of tax on the  overall net income of
          Bank or its Eurodollar  Lending Office imposed by any  jurisdiction in
          which Bank is organized or engaged in business); or

<PAGE>



     (b)  shall  impose,  modify  or deem  applicable  any  reserve  (including,
          without  limitation,  any  imposed  by the Board of  Governors  of the
          Federal  Reserve  System),  special  deposit  or  similar  requirement
          against  assets of,  deposits  with or for the  account  of, or credit
          extended by Bank (or its Eurodollar Lending Office) or shall impose on
          Bank (or its Eurodollar  Lending  Office) or the foreign  exchange and
          interbank  markets any other  condition  affecting  any Advance or the
          Note;

and the  result  of any of the  foregoing  is to  increase  the costs to Bank of
maintaining  any part of the  indebtedness  hereunder or to reduce the amount of
any sum received or receivable  by Bank under this  Agreement or under the Note,
by an amount deemed by the Bank to be material,  then Bank shall promptly notify
Companies of such fact and demand compensation therefor and, within fifteen days
after demand by Bank in writing,  Companies agree to pay to Bank such additional
amount or amounts as will  compensate Bank for such increased cost or reduction.
Bank will promptly notify Companies of any event of which it has knowledge which
will entitle Bank to  compensation  pursuant to this Section.  A certificate  of
Bank setting forth the basis for determining  such additional  amount or amounts
necessary to compensate Bank shall be  conclusively  presumed to be correct save
for manifest error.  Bank agrees that, as promptly as practical after it becomes
aware of the  occurrence of any event or the existence of a condition  that will
cause Bank to be entitled to  compensation  under this Section,  it will, to the
extent not inconsistent with Bank's internal policies, use reasonable efforts to
make,  fund or maintain any affected  Eurodollar-based  Advance  through another
lending office of Bank if as a result thereof the additional  monies which would
otherwise  be  required to be paid in respect of such  Eurodollar-based  Advance
would be materially  reduced and if, as  determined  by Bank, in its  reasonable
discretion,  the making, funding or maintaining of such Eurodollar-based Advance
through such other lending  office would not  materially  adversely  affect such
Advance  or  portion  of a loan or  Bank.  Companies  shall  pay all  reasonable
expenses  incurred by Bank in utilizing  another lending office pursuant to this
Section.

     4.6 In the  event  that at any time  after the date of this  Agreement  any
change in law such as described in Section 4.5, hereof, shall, in the reasonable
opinion of Bank require that the credit provided under this Agreement be treated
as an asset or otherwise be included for purposes of calculating the appropriate
amount of capital to be maintained by Bank or any corporation  controlling  Bank
and such change has or would have the effect of  reducing  the rate of return on
Bank's or Bank's  parent's  capital  or assets as a  consequence  of the  Bank's
obligations  hereunder  to a level below that which Bank or Bank's  parent would
have achieved but for such change,  then Bank shall notify  Companies in writing
and demand compensation  therefor and, within fifteen days after demand by Bank,
Companies  agree  to pay to Bank  such  additional  amount  or  amounts  as will
compensate  Bank for such  reduction.  Bank will  promptly  notify  Companies in
writing  of any  event of which it has  knowledge  which  will  entitle  Bank to
compensation  pursuant to this Section.  A certificate of Bank setting forth the
basis for determining such additional  amount or amounts necessary to compensate
Bank shall be conclusively presumed to be correct save for manifest error.


<PAGE>




5. CONDITIONS

     5.1 Companies  agree to furnish Bank prior to the initial  borrowing  under
this  Agreement,  in form and  substance to be  satisfactory  to Bank,  with (i)
certified  copies  of  resolutions  of the  Boards  of  Directors  of  Companies
evidencing approval of the borrowings and transactions  contemplated  hereunder;
(ii)  a  certificate   of  good  standing  from  the  state  of  each  Company's
incorporation  and from the  state(s)  in which each of them is  required  to be
qualified to do business; (iii) the other Loan Documents;  (iv) a borrowing base
report and (v) such other documents,  instruments and legal opinions as Bank may
require.

     5.2 As  security  for all  Indebtedness  of  Companies  to Bank  hereunder,
Companies  agree  to  furnish,  execute  and  deliver  to  Bank,  or cause to be
furnished,  executed and delivered to Bank, prior to or simultaneously  with the
initial borrowing hereunder, in form to be satisfactory to Bank and supported by
appropriate resolution in certified form authorizing same, the following:

     (a)  Security Agreements granting to Bank security interests in all of each
          of the Companies' tangible and intangible  personal property,  whether
          now owned or hereafter acquired,  including,  without limitation,  all
          accounts, equipment,  inventory, general intangibles and chattel paper
          ("Security Agreements");

     (b)  A  Subordination  Agreement  from  Addus  whereby  Addus  subordinates
          indebtedness of Arcadia to Arcadia's indebtedness to Bank;

     (c)  The Stock Pledge;

     (d)  The Guaranties;

     (e)  Financing  Statements  required  or  requested  by Bank to perfect all
          security  interests to be conferred upon Bank under this Agreement and
          to accord Bank a perfected first priority  security position under the
          Uniform  Commercial Code (subject only to the  encumbrances  permitted
          hereunder); and

     (f)  Such  other  documents  or  agreements  of  security  and  appropriate
          assurances  of  validity  and  perfected  first  priority  of  lien or
          security interest as Bank may reasonably request at any time.

     5.3 As a condition to the initial  Advance,  Companies  shall have provided
Bank  evidence  of  satisfaction  of  conditions  precedent  set  forth  in  the
commitment letter dated March 23, 2004.

6. REPRESENTATIONS AND WARRANTIES

     Each of the Companies  represents and warrants and such representations and
warranties  shall be  deemed to be  continuing  representations  and  warranties
during the entire life of this Agreement:

<PAGE>



     6.1 It is a corporation  duly organized and existing in good standing under
the laws of the  jurisdiction of its  incorporation  and is duly qualified to do
business and in good standing in every  jurisdiction in which such qualification
is material to its  business  and  operation  or the  ownership  or lease of its
properties;  execution,  delivery and  performance  of this  Agreement and other
documents and instruments required under this Agreement, and the issuance of the
Note by Companies are within its corporate  powers,  have been duly  authorized,
are not in contravention of law or the terms of its Articles of Incorporation or
Bylaws,  and do not require the  consent or approval of any  governmental  body,
agency or authority;  and this Agreement and the other documents and instruments
required under this Agreement and the Note,  when issued and delivered,  will be
valid and binding in accordance with their terms.

     6.2 The execution, delivery and performance of this Agreement and any other
documents and instruments required under this Agreement, and the issuance of the
Note  by  Companies  are  not in  contravention  of the  unwaived  terms  of any
indenture,  agreement or undertaking to which any Company is a party or by which
any Company is bound.

     6.3 Except as may be set forth in  Schedule  6.3,  no  litigation  or other
proceeding  before  any court or  administrative  agency is  pending,  or to the
knowledge of its officers is threatened  against  Companies or any Subsidiary of
any of the Companies,  the outcome of which could  materially  impair any of the
Companies' or any Subsidiary's  financial condition or their ability to carry on
their businesses taken as a whole.

     6.4 There are no  security  interests  in,  or liens,  mortgages,  or other
encumbrances on any of Companies' or any Subsidiary's assets, except to Bank, or
as permitted in this Agreement.

     6.5 None of the Companies nor any  Subsidiary  maintains or  contributes to
any  employee  pension  benefit  plan  subject  to  title  IV of  the  "Employee
Retirement  Income  Security Act of 1974" (herein  called  "ERISA"),  except the
plans  described in attached  Schedule  6.5.  There is no unfunded  past service
liability of the pension  plan and there is no  accumulated  funding  deficiency
within the meaning of ERISA, or any existing material  liability with respect to
any pension plan owed to the Pension Benefit  Guaranty  Corporation  ("PBGC") or
any successor thereto, except any funding deficiency for which an application to
the PBGC for waiver is  pending  or for which a waiver  has been  granted by the
PBGC.

     6.6  The  financial   statements  of  Companies  dated  January  31,  2004,
previously furnished Bank, are complete and correct in all material respects and
fairly  present the  financial  condition  of Companies  and their  consolidated
Subsidiaries as of their  respective  dates;  since January 31, 2004,  there has
been  no  material  adverse  change  in the  financial  condition  of any of the
Companies or any of the Subsidiaries;  to the knowledge of its officers, none of
the  Companies  nor  any of the  Subsidiaries  has  any  contingent  obligations
(including any liability for taxes) not disclosed by or reserved against in said
financial statements and at the present time there are no material unrealized or
anticipated  losses  from any  present  commitment  of any of the  Companies  or
Subsidiaries.

     6.7 All tax  returns  and tax  reports  of  Companies  and each  Subsidiary
required by law to have been filed have been duly filed or extensions  obtained,
and all taxes,  assessments and other governmental charges or levies (other than
those  presently  payable without penalty and those currently being contested in
good faith for which adequate  reserves have been established) upon Companies or
any  Subsidiary (or any of its  properties)  which are due and payable have been
paid for which the failure to pay would materially adversely affect its business
or the value of its property or assets (taken as a whole). The charges, accruals
and reserves on the books of Companies  and the  Subsidiaries  in respect of the
Federal income tax for all periods are adequate in the opinion of Companies.


<PAGE>



     6.8 All of the issued and outstanding  capital stock of Arcadia is owned by
the Parent Guarantor.  Except as disclosed on Schedule 6.8 annexed hereto, there
are no Subsidiaries of any Company.

     6.9  Each  Company  and its  Subsidiaries  are,  in the  conduct  of  their
business,  in  compliance in all material  respects  with all federal,  state or
local laws, statutes,  ordinances and regulations applicable to any of them, the
enforcement of which,  if such Company or any Subsidiary were not in compliance,
would reasonably be expected to materially  adversely affect its business or the
value of its  property  or  assets  (taken  as a whole).  Each  Company  and its
Subsidiaries have all approvals, authorizations,  consents, licenses, orders and
other permits of all  governmental  agencies and  authorities,  whether federal,
state or local,  required to permit the operation of their business as presently
conducted, except such approvals, authorizations, consents, licenses, orders and
other  permits  with  respect to which the failure to have would  reasonably  be
expected  to  materially  adversely  affect  its  business  or the  value of its
property or assets (taken as a whole).

     6.10 Except as may be set forth in Schedule 6.10, none of the Companies nor
any Subsidiary is party to any litigation or administrative  proceeding,  nor so
far as is known by it is any litigation or administrative  proceeding threatened
against it or any other Company or Subsidiary,  which in either case (A) asserts
or alleges that any of the Companies or any  Subsidiary  violated  Environmental
Laws (as defined  herein),  (B) asserts or alleges that any of the  Companies or
any  Subsidiary  is  required  to clean up,  remove,  or take  remedial or other
response  action due to the disposal,  depositing,  discharge,  leaking or other
release of any hazardous substances or materials, or (C) asserts or alleges that
any of the  Companies or any  Subsidiary  is required to pay all or a portion of
the cost of any past, present,  or future cleanup,  removal or remedial or other
response  action which arises out of or is related to the disposal,  depositing,
discharge,  leaking or other release of any hazardous substances or materials by
any of the Companies or any Subsidiary.

     6.11 To the best of its knowledge,  after due inquiry,  except as otherwise
previously  disclosed in writing by Companies to Bank,  there are no  conditions
existing  currently or likely to exist during the term of this  Agreement  which
would  subject any of the  Companies  or any  Subsidiary  to  material  damages,
penalties, injunctive relief or cleanup costs under any applicable Environmental
Laws or which  require  or are  likely to  require  material  cleanup,  removal,
remedial action or other response pursuant to applicable  Environmental  Laws by
any of the Companies or any Subsidiary.

     6.12 None of the Companies  nor any  Subsidiary is subject to any judgment,
decree, order or citation related to or arising out of applicable  Environmental
Laws and to the best of its  knowledge,  after due inquiry,  except as otherwise
previously  disclosed in writing to the Bank,  neither of the  Companies nor any
Subsidiary  has been named or listed as a potentially  responsible  party by any
governmental   body  or  agency  in  a  matter   arising  under  any  applicable
Environmental Laws.


<PAGE>



     6.13 Each of the Companies and the Subsidiaries  have all material permits,
licenses and approvals required under applicable Environmental Laws.

     6.14 None of the Companies is an "Investment Company" within the meaning of
the Investment Company Act of 1940, as amended. None of the Companies is engaged
principally,  or as one of its important activities,  directly or indirectly, in
the  business  of  extending  credit for the purpose of  purchasing  or carrying
margin  stock,  and none of the proceeds of any of the loans  hereunder  will be
used, directly or indirectly, for any purpose which would violate the provisions
of  Regulation U or X of the Board of Governors of the Federal  Reserve  System.
Terms for which  meanings are provided in Regulation U of the Board of Governors
of the Federal Reserve System or any regulations  substituted  therefor, as from
time to time in effect, are used in this paragraph with such meanings.

     6.15  Each  Company  has good and  valid  title  to the  property  pledged,
mortgaged  or  otherwise  encumbered  or to be  encumbered  by it under the Loan
Documents to which such Company is a party.

     6.16 Schedule 6.16 annexed  hereto is a complete list of all premises where
tangible personal property of the Companies is located.

7. AFFIRMATIVE COVENANTS

     Each of the Companies  covenants and agrees that it will, and it will cause
each of its  Subsidiaries,  so long as Bank  may  make any  Advance  under  this
Agreement and thereafter so long as any Indebtedness  remains  outstanding under
this Agreement:

     7.1 Furnish Bank:

     (a)  prompt  notification  of any condition or event which  constitutes  or
          with the running of time and/or the giving of notice would  constitute
          an Event of Default under this Agreement, and promptly inform the Bank
          of any  material  adverse  change  in any  of  the  Companies'  or any
          Subsidiary's financial condition;

     (b)  as soon as  available  and in any event within 30 days after and as of
          the end of each month,  the  consolidated  and  consolidating  balance
          sheets and  statements of profit and loss and surplus of the Companies
          and  their  consolidated  Subsidiaries,  duly  certified  (subject  to
          year-end audit  adjustments) by the chief financial officer of each of
          the  Companies  as  having  been  prepared  in  accordance  with  GAAP
          consistent  with those  applied in the  preparation  of the  financial
          statements referred to in Section 6.6;


<PAGE>


     (c)  as soon as  available  and in any event within 30 days after and as of
          the end of each month,  the balance sheet and statements of profit and
          loss and surplus of the Parent  Guarantor duly  certified  (subject to
          year-end audit  adjustments) by the chief financial  officer of Parent
          Guarantor  as  having  been  prepared  in  accordance  with  the  GAAP
          consistent  with those  applied by Arcadia in the  preparation  of the
          financial statements referred to in Section 6.6;

     (d)  as soon as available  and in any event within 120 days after and as of
          the  end of  each  fiscal  year  of the  Companies,  consolidated  and
          consolidating  audited  financial  statements  of Companies  and their
          consolidated  Subsidiaries,  including a balance sheet,  statements of
          income and retained  earnings  and changes in  financial  position for
          such  year,   prepared  in  accordance  with  GAAP  and  certified  by
          independent certified public accountants  reasonably acceptable to the
          Bank;

     (e)  as soon as available  and in any event within 120 days after and as of
          the end of each fiscal  year of the Parent  Guarantor,  the  financial
          statements  of  the  Parent  Guarantor,  including  a  balance  sheet,
          statements  of income and  retained  earnings and changes in financial
          position  for such  year,  prepared  in  accordance  with the GAAP and
          certified  by  independent  certified  public  accountants  reasonably
          acceptable to Bank;

     (f)  within ten (10) days after and as of the end of each month, a detailed
          aging of Accounts and accounts payable and an inventory report in form
          acceptable to Bank, certified by an officer of each of the Companies;

     (g)  on Thursday of each week and as of Thursday of the  previous  week,  a
          borrowing  base report in form  acceptable  to Bank,  certified  by an
          officer of each of the Companies;

     (h)  on or  before  April 30 of each year and as of a date not more than 60
          days prior thereto,  an updated personal financial  statement for each
          Individual  Guarantor in form acceptable to Bank and certified by such
          Guarantor as to accuracy and completeness;

     (i)  such  information  as  required  by the  terms and  conditions  of the
          Advance Formula Agreement and any security  agreements  referred to in
          this Agreement; and

     (j)  from time to time,  such further  information  regarding  the business
          affairs  and  financial  condition  of the  Companies  as the Bank may
          reasonably request.

     7.2 Pay and discharge, and cause its Subsidiaries to pay and discharge, all
taxes and other governmental charges and all contractual obligations calling for
the payment of money,  before the same shall become  overdue,  unless and to the
extent only that such payment is being  contested in good faith and, if required
by Bank, bonded in a manner satisfactory to Bank.

     7.3 Maintain, and cause its Subsidiaries to maintain, insurance coverage on
their  physical  assets and against other  business risks in such amounts and of
such types as are customarily  carried by companies  similar in size and nature,
and in the event of acquisition of additional property,  real or personal, or of
incurrence of additional risks of any nature,  increase such insurance  coverage
in such  manner and to such  extent as prudent  business  judgment  and  present
practice  would  dictate;  and in the  case of all  policies  covering  property
mortgaged  or  pledged to Bank or  property  in which Bank shall have a security
interest of any kind whatsoever,  other than those policies  protecting  against
casualty  liabilities to strangers,  all such  insurance  policies shall provide
that the loss payable thereunder shall be payable to Companies and Bank as their
respective  interests  may appear;  copies of all said  policies,  including all
endorsements thereon and those required hereunder, to be deposited with Bank.


<PAGE>



     7.4  Permit,  and cause its  Subsidiaries  to  permit,  Bank,  through  its
authorized  attorneys,   accountants,  and  representatives,   to  examine  each
Company's and its Subsidiaries' books, accounts,  records, ledgers and assets of
every kind and description at all reasonable  times upon oral or written request
of Bank,  including,  without limitation,  collateral audits of Companies at the
expense  of  Companies;  provided,  however,  so long as no  Default or Event of
Default  has  occurred  and is  continuing,  Companies  shall not be required to
reimburse  Bank for more than three (3) such audits from the date hereof through
May 7, 2005,  and for more than two (2) such audits  during  each  twelve  month
period thereafter.

     7.5 Promptly  notify Bank of any  condition or event which  constitutes  or
with the running of time and/or the giving of notice would  constitute a default
under this Agreement, and promptly inform Bank of any material adverse change in
any Company's or any Subsidiary's financial condition.

     7.6  Furnish  to the Bank  concurrently  with the  delivery  of each of the
financial  statements  required by Section  7.1(a) and (b)  hereof,  a statement
prepared  and  certified  by the chief  financial  officer of Arcadia (or in his
absence,  a  responsible  senior  officer  of  Arcadia)  (a)  setting  forth all
computations  necessary  to show  compliance  by  Companies  with the  financial
covenants  contained in Sections 7.11 and 7.12 of this  Agreement as of the date
of such  financial  statements,  (b)  stating  that as of the date  thereof,  no
condition  or event  which  constitutes  an event of  default  or which with the
running of time and/or the giving of notice would constitute an event of default
has occurred and is  continuing,  or if any such event or condition has occurred
and is  continuing  or  exists,  specifying  in detail  the nature and period of
existence   thereof  and  any  action  taken  with  respect   thereto  taken  or
contemplated  to be taken by  Companies  and (c)  stating  that the  signer  has
personally  reviewed  this  Agreement and that such  certificate  is based on an
examination sufficient to assure that such certificate is accurate.

     7.7 Maintain in good  standing,  and cause each  Subsidiary  to maintain in
good  standing,  all  licenses  required  by the State of Michigan or any agency
thereof,  or other governmental  authority that may be necessary or required for
Companies  or any  Subsidiary  to  carry on its  general  business  objects  and
purposes.

     7.8  Furnish,  and cause each  Subsidiary  to  furnish,  Bank,  upon Bank's
request, in form satisfactory to Bank with pledges, assignments, mortgages, lien
instruments or other security  instruments covering any or all of each Company's
and  each  Subsidiary's  real  or  personal   property,   of  every  nature  and
description,  whether now owned or hereafter  acquired,  to the extent that Bank
may in its sole reasonable discretion require.

     7.9 Comply,  and cause each  Subsidiary  to comply,  with all  requirements
imposed by ERISA as presently in effect or hereafter promulgated including,  but
not limited to, the minimum funding requirements of the Pension Plans.

<PAGE>



     7.10 Promptly notify Bank after the occurrence thereof in writing of any of
the following events:

     (a)  the  termination  of any  Company's or any  Subsidiary's  Pension Plan
          pursuant to Subtitle C of Title IV of ERISA or otherwise;

     (b)  the  appointment  of a trustee by a United  States  District  Court to
          administer the Pension Plan;

     (c)  the commencement by the Pension Benefit Guaranty  Corporation,  or any
          successor  thereto of any proceeding to terminate any Company's or any
          Subsidiary's Pension Plan;

     (d)  the  failure of any  Company's  or any  Subsidiary's  Pension  Plan to
          satisfy  the  minimum  funding  requirements  for  any  plan  year  as
          established  in Section 412 of the Internal  Revenue Code of 1954,  as
          amended;

     (e)  the withdrawal of any Company or any  Subsidiary  from a Pension Plan;
          or

     (f)  a reportable event, within the meaning of Title IV of ERISA.

     7.11 Maintain at all times,  commencing April 30, 2005,  Tangible Effective
Net Worth of not less than $100,000.

     7.12 Maintain as of the end of each fiscal quarter of Companies, commencing
with the fiscal quarter ending  December 31, 2004, a Fixed Charge Coverage Ratio
of not less than 1.15 to 1.0.

     7.13 Maintain all cash  collection and general  disbursement  accounts with
Bank.

     7.14  Furnish,  and cause each Person which becomes a holder of the capital
stock of Arcadia after the date hereof to furnish, Bank  contemporaneously  with
the  acquisition  of such stock,  a Stock Pledge,  together with delivery of the
original stock  certificate(s) and a stock assignment(s) duly executed in blank,
all in form  satisfactory  to Bank,  supported  by  appropriate  resolutions  in
certified  form  authorizing  same,  as  applicable.  Nothing  set forth in this
Section shall constitute  Bank's consent to the acquisition by any Person of any
of the capital stock of Arcadia.

     7.15 Promptly  furnish Bank with notice of any merger or acquisition of the
Parent Guarantor into, with or by any other Person.

8. NEGATIVE COVENANTS

     Each of the  Companies  covenants and agrees that, so long as Bank may make
any Advances  under this  Agreement and  thereafter so long as any  Indebtedness
remains  outstanding  under this Agreement,  it will not, and it will not permit
its Subsidiaries to, without the prior written consent of Bank:

<PAGE>



     8.1 Purchase, acquire, issue (except as permitted in Section 8.9) or redeem
any of its capital stock or make any material change in its capital structure.

     8.2 Enter into any merger or consolidation  or sell,  lease,  transfer,  or
dispose of all,  substantially  all, or any part of its assets, (i) except sales
of  Inventory in the  ordinary  course of its  business,  (ii)  dispositions  of
obsolete equipment to the extent not exceeding $100,000 during any single fiscal
year, and (iii) sales,  transfers and dispositions of other assets not described
in  subclauses  (i) and (ii) and not in excess of  $100,000  during  any  single
fiscal year.

     8.3 Guarantee,  endorse, or otherwise become secondarily liable for or upon
the  obligations of others,  except by  endorsement  for deposit in the ordinary
course of business and guaranties in favor of Bank.

     8.4 Purchase or otherwise  acquire or become  obligated for the purchase of
all or substantially all of the assets or business interests of any person, firm
or  corporation  or any  shares  of stock  of any  corporation,  trusteeship  or
association  or in any other  manner  effectuate  or  attempt to  effectuate  an
expansion of present business by acquisition.

     8.5 Become or remain  obligated for any indebtedness for borrowed money, or
for  any  indebtedness  incurred  in  connection  with  the  acquisition  of any
property, real or personal, tangible or intangible, except:

     (a)  indebtedness to Bank;

     (b)  current  unsecured trade payables and accrued  liabilities  arising in
          the ordinary course of any Company's business;

     (c)  the Subordinated Debt owed to Addus;

     (d)  indebtedness owing from one Company to another Company;

     (e)  indebtedness  not to  exceed  $150,000  in the  aggregate  at any time
          outstanding  secured by  purchase  money  liens  permitted  by Section
          8.6(b); and

     (f)  other  unsecured  indebtedness  not  exceeding  $75,000  at  any  time
          outstanding.

     8.6 Affirmatively  pledge or mortgage any of its assets,  whether now owned
or hereafter acquired,  or create,  suffer or permit to exist any lien, security
interest  in, or  encumbrance  thereon,  except  (collectively,  the  "Permitted
Liens"):

     (a)  to Bank;

     (b)  liens and security  interests upon fixed assets  acquired by a Company
          after  the date of this  Agreement  (including  by virtue of a Capital
          Lease) to secure the indebtedness permitted by Section 8.5(e) provided
          that (i) any such lien or security  interest is created solely for the
          purpose of securing indebtedness representing, or incurred to finance,
          the cost of the item of property subject  thereto;  (ii) the principal
          amount of the  indebtedness  secured by such lien does not exceed 100%
          of the fair value of the  property  at the time it was  acquired,  and
          (iii) the lien or security  interest does not cover any other property
          other than such item of property.

<PAGE>



     (c)  the Ordinary Course Liens; and

     (d)  liens described on Schedule 8.6 (if any).

     8.7 Sell,  assign,  transfer or confer a security  interest in any account,
contract, note, trade acceptance or other receivable, except to Bank.

     8.8 Materially alter the character of its businesses from that conducted as
of the date of this Agreement.

     8.9 Declare or pay any  dividends or make any other  distribution  upon its
shares of  capital  stock  except  dividends  payable  in the  capital  stock of
Companies  and  dividends by a Subsidiary  of a Company to a Company;  provided,
however, after the Overformula Amount has been reduced to $0, and, provided that
immediately  prior to and after giving effect to any such declaration or payment
no Default or Event of Default  has  occurred  and is  continuing,  Arcadia  may
declare or pay cash dividends or make any other distributions upon its shares of
capital stock not to exceed $500,000 in the aggregate  during any fiscal year of
Arcadia.

     8.10  Enter  into  any  transaction  or  series  of  transactions  with any
Affiliate  other than on terms and conditions as favorable to Companies as would
be obtainable in a comparable  arms-length  transaction with a Person other than
an Affiliate.

     8.11 Make or allow to  remain  outstanding  any  investment  (whether  such
investment shall be of the character of investment in shares of stock, evidences
of indebtedness  or other  securities or otherwise) in, or any loans or advances
to, any person, firm, corporation or other entity or association, except:

     (a)  advances  made for expenses or  purchases  in the  ordinary  course of
          business; and

     (b)  loans or advances made by a Company to another Company.

     8.12 Allow any fact,  condition  or event to occur or exist with respect to
any employee  pension  and/or profit sharing plan of any of the Companies or any
Subsidiaries, which shall constitute grounds for termination of such plan by the
PBGC or for the  appointment  by a United States  District Court of a trustee to
administer any such plan.

     8.13  Enter  into or  become  subject  to any  agreement  (other  than this
Agreement) (i) prohibiting the creation or assumption of any lien or encumbrance
upon the  properties or assets of any Company or (ii) requiring an obligation to
become secured (or further secured) if another  obligation is secured or further
secured.

     8.14 Make any payment of the Subordinated Debt unless and to the extent any
such  payment,  redemption  or  conversion  is permitted  under the terms of the
applicable Subordination Agreement.

<PAGE>




9.       ENVIRONMENTAL PROVISIONS

     9.1 For the purposes of this Agreement the term "Environmental  Laws" shall
mean  all  federal,  state  and  local  laws  including  statutes,  regulations,
ordinances,  codes, rules, and other governmental restrictions and requirements,
relating to  environmental  pollution,  contamination or other impairment of any
nature,  any hazardous or other toxic substances of any nature,  whether liquid,
solid and/or gaseous,  including smoke,  vapor,  fumes,  soot,  acids,  alkalis,
chemicals, wastes, by-products, and recycled materials. Environmental Laws shall
include but not be limited to the Federal Solid Waste  Disposal Act, the Federal
Clean Air Act, the Federal  Clean Water Act, the Federal  Resource  Conservation
and  Recovery Act of 1976,  the Federal  Comprehensive  Environmental  Response,
Compensation  and Liability Act of 1980,  the Federal  Superfund  Amendments and
Reauthorization Act of 1986, regulations of the Environmental Protection Agency,
regulations  of  the  Nuclear  Regulatory  Agency,   regulations  of  any  state
department of natural resources or state environmental  protection agency now or
at any time hereafter in effect and local health department ordinances.

     9.2 Each of the Companies shall timely comply in all material respects with
all applicable Environmental Laws.

     9.3 Each of the  Companies  shall  provide  to the Bank,  immediately  upon
receipt, copies of any correspondence,  notice, pleading, citation,  indictment,
complaint,  order,  decree,  or other  document  from any  source  asserting  or
alleging a circumstance  or condition  which requires or may require a financial
contribution  by any of the Companies or any  Subsidiary or a cleanup,  removal,
remedial action,  or other response by or on the part of either of the Companies
or any Subsidiary under applicable  Environmental Laws or which seeks damages or
civil,  criminal or punitive penalties from any Company or any Subsidiary for an
alleged violation of Environmental Laws.

     9.4 Each of the Companies shall promptly notify the Bank in writing as soon
as  it  becomes  aware  of  any  condition  or  circumstance   which  makes  the
environmental warranties contained in this Agreement incomplete or inaccurate in
any material respect as of any date.

     9.5  In  the  event  of  any  condition  or  circumstance  that  makes  any
environmental warranty, representation and/or agreement incomplete or inaccurate
in any material respect as of any date,  Companies shall, at their sole expense,
if  reasonably   requested  by  Bank,   retain  an  environmental   professional
consultant,  reasonably  acceptable  to Bank, to conduct a thorough and complete
environmental  audit regarding the changed condition and/or circumstance and any
environmental  concerns arising from that changed condition and/or circumstance.
A copy of the environmental  consultant's  report will be promptly  delivered to
both Bank and Companies upon completion.

     9.6 At any time if any of the Companies, directly or indirectly through any
professional  consultant  or other  representative,  determines  to undertake an
environmental audit, assessment or investigation,  it shall promptly provide the
Bank with written notice of the  initiation of the  environmental  audit,  fully
describing  the purpose and  intended  scope of the  environmental  audit.  Upon
receipt,  Companies  will  promptly  provide  to the Bank  copies  of all  final
findings and conclusions of any such  environmental  investigation.  Preliminary
findings  and  conclusions  shall be  provided  if final  reports  have not been
completed and delivered to the Bank within 60 days  following  completion of the
preliminary findings and conclusions.

<PAGE>




     9.7 Each of the Companies hereby indemnifies,  saves and holds the Bank and
any  of  its  past,  present  and  future  officers,  directors,   shareholders,
employees,  representatives  and  consultants  harmless  from any and all  loss,
damages,  suits, penalties,  costs,  liabilities and expenses (including but not
limited to reasonable investigation, environmental audit(s), and legal expenses)
arising out of any claim,  loss or damage of any property,  injuries to or death
of  persons,  contamination  of or adverse  affects on the  environment,  or any
violation of any applicable  Environmental Laws, caused by or in any way related
to any property  owned,  leased or operated by Companies,  or due to any acts of
either of the  Companies,  its  officers,  directors,  shareholders,  employees,
consultants and/or representatives. In no event shall either of the Companies be
liable hereunder for any loss, damages, suits, penalties,  costs, liabilities or
expenses arising from any intentional wrongful act or act of gross negligence of
the Bank, or its agents or employees.

     It is  expressly  understood  and agreed that the  indemnification  granted
herein is intended to protect the Bank, its past,  present and future  officers,
directors,  shareholders,  employees,  consultants and representatives  from any
claims that may arise by reason of the security interest, liens and/or mortgages
granted to the Bank,  or under any other  document or agreement  given to secure
repayment of any indebtedness from either of the Companies,  whether or not such
claims  arise  before or after the Bank has  foreclosed  upon  and/or  otherwise
become the owner of any such property.  All obligations of indemnity as provided
hereunder shall be secured by the collateral documents.

     It is expressly agreed and understood that the provisions  hereof shall and
are  intended  to  be  continuing   and  shall  survive  the  repayment  of  any
indebtedness from Companies to the Bank.

     9.8 Each of the Companies and its Subsidiaries  have and shall maintain all
permits, licenses and approvals required under applicable Environmental Laws.

10. EVENTS OF DEFAULT

     10.1 Upon occurrence of any of the following events of default:

     (a)  non-payment  of any  installment  of the  principal or interest on the
          Note when due, or  non-payment of any other  outstanding  Indebtedness
          when due, and (in each case) continuance thereof for five (5) Business
          Days;

     (b)  default in the  observance or  performance  of any of the  conditions,
          covenants or  agreements  of Companies set forth in Sections 7.1, 7.3,
          7.4,  7.5,  7.6,  7.10,  7.11,  7.12,  7.13,  7.14,  7.15 or 8 (in its
          entirety);

     (c)  default in observance or performance  of any of the other  conditions,
          covenants  or  agreements  of  any  Company  herein  set  forth,   and
          continuance  thereof  for  thirty  (30) days after  written  notice to
          Companies by Bank;

<PAGE>




     (d)  any material  representation or warranty made by any Company herein or
          in any  instrument  submitted  pursuant  hereto  proves  untrue in any
          material respect when made or deemed made;

     (e)  default in the  observance or  performance  of any of the  conditions,
          covenants  or  agreements  of any Company set forth in any  collateral
          document  of  security  which may be given to secure the  indebtedness
          hereunder or in any other  document  related to or connected with this
          Agreement or the indebtedness  hereunder,  and lapse of any applicable
          grace or cure period;

     (f)  default in the payment of any other obligation of any Company,  any of
          its  Subsidiaries  or any Guarantor for borrowed money in an aggregate
          amount  in  excess of Twenty  Thousand  Dollars  ($20,000),  or in the
          observance or performance of any  conditions,  covenants or agreements
          related or given with respect to any obligations for borrowed money in
          an aggregate  amount in excess of Twenty  Thousand  Dollars  ($20,000)
          sufficient to permit the holder  thereof to accelerate the maturity of
          such obligation;

     (g)  judgments  for the  payment  of money in  excess  of the sum of Twenty
          Thousand Dollars  ($20,000) in the aggregate shall be rendered against
          any  Company,  any  of its  Subsidiaries  or any  Guarantor  and  such
          judgments  shall  remain  unpaid,  unvacated,  unbonded or unstayed by
          appeal or otherwise for a period of thirty (30)  consecutive days from
          the date of its entry and such  judgment is not  covered by  insurance
          from  a  solvent   insurer  who  is  defending   such  action  without
          reservation of rights;

     (h)  the occurrence of any "reportable  event",  as defined in the Employee
          Retirement  Income  Security Act of 1974 and any  amendments  thereto,
          which is  determined  to  constitute  grounds for  termination  by the
          Pension Benefit  Guaranty  Corporation of any employee pension benefit
          plan  maintained by or on behalf of any Company for the benefit of any
          of its  employees or for the  appointment  by the  appropriate  United
          States  District  Court of a trustee  to  administer  such plan and is
          reasonably  likely that the occurrence of such event would result in a
          material adverse effect on Companies, and such reportable event is not
          corrected and such determination is not revoked within sixty (60) days
          after  notice  thereof  has been  given to the plan  administrator  or
          Companies;  or the  institution of proceedings by the Pension  Benefit
          Guaranty  Corporation to terminate any such employee  benefit  pension
          plan  or to  appoint  a  trustee  to  administer  such  plan;  or  the
          appointment  of a trustee by the  appropriate  United States  District
          Court to administer any such employee benefit pension plan;

     (i)  John E.  Elliott II and/or  Lawrence R.  Kuhnert  shall fail,  for any
          reason,  to directly or indirectly  own and control 25% or more of the
          issued and outstanding capital stock of Arcadia in the aggregate;

<PAGE>




     (j)  if at any time, John E. Elliott II and Lawrence K. Kuhnert shall fail,
          for any reason,  to serve as  Directors  of Arcadia,  holding,  in the
          aggregate, more than 50% of the voting power of the Board of Directors
          of Arcadia;

     (k)  if there shall be any other  change for any reason  whatsoever  in the
          management,  ownership or control of any of the Companies, which shall
          in the reasonable judgment of Bank materially  adversely affect future
          prospects  for  the  successful   operation  of  any  Company  or  any
          Subsidiary;

     (l)  if any Guaranty or  Subordination  Agreement is revoked in whole or in
          part or if any Individual  Guarantor shall die; or if there occurs any
          default under the terms of any Guaranty;

     (m)  If Arcadia or the Parent  Guarantor shall make, or Addus shall accept,
          any payment or distribution of the  Subordinated  Debt in violation of
          the Subordination  Agreement;  or if there occurs any other default by
          Addus under the terms of the Subordination Agreement, and such default
          shall  continue for twenty (20) days after written notice to Companies
          and Addus by Bank;

     (n)  if either  John E.  Elliott  II or  Lawrence  R.  Kuhnert  guaranties,
          endorses  or  otherwise  becomes  secondarily  liable  for or upon the
          obligations  of others  except (1) by  endorsement  for deposit in the
          ordinary  course,  (2)  guaranties  in  favor  of Bank  and (3)  other
          guaranties  not to exceed  $250,000 in aggregate  principal  liability
          (for each of John E. Elliott II and Lawrence R. Kuhnert); or

     (o)  if Bank shall for any reason deem itself to be insecure,  believing in
          good faith that the  prospect  of  payment  of or  performance  of the
          Indebtedness is materially impaired.

then, or at any time thereafter,  unless such default is remedied, Bank may give
written notice to Companies declaring all outstanding Indebtedness hereunder and
under  the  Note  to  be  due  and  payable,  whereupon  all  Indebtedness  then
outstanding  hereunder  and  under the Note  shall  immediately  become  due and
payable without further notice and demand,  and Bank's shall not be obligated to
make further Advances hereunder.

     10.2 If a creditors'  committee  shall have been appointed for the business
of any Company or any of its  Subsidiaries  or any Guarantor in connection  with
any bankruptcy or insolvency;  or if any Company or any of its  Subsidiaries  or
any Guarantor shall have made a general  assignment for the benefit of creditors
or shall  have  been  adjudicated  bankrupt,  or shall  have  filed a  voluntary
petition in bankruptcy or for  reorganization or to effect a plan or arrangement
with  creditors;  or shall  file an answer  to a  creditor's  petition  or other
petition  filed against it,  admitting the material  allegations  thereof for an
adjudication in bankruptcy or for  reorganization;  or shall have applied for or
permitted the appointment of a receiver,  or trustee or custodian for any of its
property  or assets;  or such  receiver,  trustee or  custodian  shall have been
appointed for any of its property or assets  (otherwise than upon application or
consent of applicable Company, Subsidiary or Guarantor, as applicable), and such
receiver,  trustee or  custodian  so  appointed  shall not have been  discharged
within sixty (60) days after the date of his appointment or if an order shall be
entered and shall not be  dismissed  or stayed  within  sixty (60) days from its
entry,  approving any petition for  reorganization  of any Company or any of its
Subsidiaries  or  any  Guarantor;  then  the  Note  and  all  indebtedness  then
outstanding hereunder shall automatically become immediately due and payable and
Bank shall not be obligated to make further Advances under this Agreement.

<PAGE>




     10.3 Upon the occurrence and during the continuance of an Event of Default,
unless all of the Indebtedness is then  immediately  fully paid, Bank shall have
and may exercise any one or more of the rights and remedies for which  provision
is made for a secured party under the Michigan Uniform  Commercial Code ("UCC"),
under the Security Agreements or under any other document contemplated hereby or
for  which  provision  is  provided  by law  or in  equity,  including,  without
limitation, the right to take possession and sell, lease or otherwise dispose of
any or all of the collateral and to set off against the  Indebtedness any amount
owing by Bank to a Company  and/or any  property of a Company in  possession  of
Bank. Companies agree, upon request of Bank, to assemble the collateral and make
it  available  to Bank at any  place  designated  by Bank  which  is  reasonably
convenient to Bank and Companies.

     10.4 All of the  Indebtedness  shall  constitute one loan secured by Bank's
security  interest  in  the  collateral  and by all  other  security  interests,
mortgages,  liens,  claims, and encumbrances now and from time to time hereafter
granted from Companies to Bank.  Upon the occurrence and during the  continuance
of an Event of  Default  which is not  cured  within  the cure  period,  if any,
provided hereunder,  Bank may in its sole discretion apply the collateral to any
portion of the  Indebtedness.  The proceeds of any sale or other  disposition of
the Collateral authorized by this Agreement shall be applied by Bank, first upon
all expenses  authorized  by the UCC (or other  applicable  law) or otherwise in
connection  with the sale and all reasonable  attorneys' fees and legal expenses
incurred by Bank; the balance of the proceeds of such sale or other  disposition
shall be applied in the payment of the Indebtedness,  first to interest, then to
principal,  then to other  Indebtedness  and the surplus,  if any, shall be paid
over to Companies or to such other Person or Persons as may be entitled  thereto
under  applicable law.  Companies shall remain liable for any deficiency,  which
Companies shall pay to Bank immediately upon demand.

     10.5 The remedies  provided for herein are  cumulative  to the remedies for
collection of the Indebtedness as provided by law, in equity or by any mortgage,
security  agreement  or  other  document  contemplated  hereby.  Nothing  herein
contained is intended, nor shall it be construed, to preclude Bank from pursuing
any other  remedy  for the  recovery  of any  other sum to which  Bank may be or
become entitled for the breach of this Agreement by Companies.

     10.6 The remedies  provided for herein are  cumulative  to the remedies for
collection of the Indebtedness as provided by law, in equity or by any mortgage,
security  agreement  or  other  document  contemplated  hereby.  Nothing  herein
contained is intended, nor shall it be construed, to preclude Bank from pursuing
any other  remedy  for the  recovery  of any  other sum to which  Bank may be or
become entitled for the breach of this Agreement by Companies.

     10.7  Upon the  occurrence  and  during  the  continuance  of any  Event of
Default,  Companies shall immediately upon demand by Bank deposit with Bank cash
collateral  in the amount equal to the maximum  amount  available to be drawn at
any time under any Letter of Credit then outstanding.

<PAGE>




11. MISCELLANEOUS

     11.1 This Agreement shall be binding upon and shall inure to the benefit of
Companies and Bank and their respective successors and assigns,  except that the
credit  provided for under this  Agreement and no part thereof and no obligation
of  Bank  hereunder  shall  be  assignable  or  otherwise  transferable  by  any
Companies.

     11.2 Companies shall pay all closing costs and expenses,  including, by way
of description and not limitation, reasonable outside attorney fees, lien search
fees, and title policy fees incurred by Bank in connection  with the commitment,
consummation  and closing of this  Agreement.  All costs,  including  reasonable
attorney  fees  incurred by Bank in protecting or enforcing any of its or any of
the Bank's rights against  Companies or any collateral or in defending Bank from
any  claims  or  liabilities  by any  party  or  otherwise  incurred  by Bank in
connection  with an event of default or the enforcement of this Agreement or the
related  documents,  including by way of description  and not  limitation,  such
charges in any court or  bankruptcy  proceedings  or arising out of any claim or
action by any person against Bank which would not have been asserted were it not
for  Bank's  relationship  with  Companies  hereunder,  shall  also  be  paid by
Companies.

     11.3 Where the  character  or amount of any asset or  liability  or item of
income or expense is required to be  determined  or any  consolidation  or other
accounting  computation  is  required  to be  made  for  the  purposes  of  this
Agreement, it shall be done in accordance with GAAP, consistently applied.

     11.4 No  delay  or  failure  of Bank in  exercising  any  right,  power  or
privilege  hereunder shall affect such right, power or privilege,  nor shall any
single or partial exercise thereof preclude any further exercise thereof, or the
exercise of any other power,  right or privilege.  The rights of Bank under this
Agreement are  cumulative  and not exclusive of any right or remedies which Bank
would otherwise have.

     11.5 All notices or other  communications  required or permitted  hereunder
shall  be in  writing  and  shall be  deemed  to have  been  duly  given  (i) if
physically  delivered,  (ii) three (3) business days after having been deposited
in the United States Mail, as certified mail with return  receipt  requested and
with  postage  prepaid,  or  (iii)  one  (1)  business  day  after  having  been
transmitted to a third party providing  delivery services in the ordinary course
of  business  which  guarantees  delivery  on the next  business  day after such
transmittal  (e.g.,  via  Federal  Express),  all  of  which  notices  or  other
communications shall be addressed to the recipient as follows:

To Companies:

         Arcadia Services, Inc.
         26777 Central Park Boulevard
         Suite 200
         Southfield, MI  48076
         Attention:   John E. Elliott, II

<PAGE>




To Bank:

         Comerica Bank
         100 NE Third Avenue
         Suite 200
         Ft. Lauderdale, FL  33301
         Attention: MMBI-Florida; Sheryl J. Greenwald

     11.6 This Agreement and the Note have been delivered at Detroit,  Michigan,
and shall be governed by and construed and enforced in accordance  with the laws
of the State of Michigan.  Whenever  possible each  provision of this  Agreement
shall  be  interpreted  in  such  manner  as to be  effective  and  valid  under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under  applicable law, such provision shall be ineffective to the extent
of such  prohibition or invalidity,  without  invalidating the remainder of such
provision or the remaining provisions of this Agreement.

     11.7 No  amendments  or  waiver of any  provisions  of this  Agreement  nor
consent to any departure by Companies  therefrom shall in any event be effective
unless the same shall be in writing  and signed by the Bank and  Companies,  and
then such  amendment,  waiver or consent shall be effective only in the specific
instance and for the specific  purpose for which given. No amendment,  waiver or
consent with respect to any provision of this  Agreement  shall affect any other
provision of this Agreement.

     11.8 All sums  payable by  Companies  to Bank under this  Agreement  or the
other  documents  contemplated  hereby  shall  be paid  directly  to Bank at its
principal  office  set forth in Section  11.5  hereof in  immediately  available
United States funds,  without set off,  deduction or  counterclaim.  In its sole
discretion,  Bank may charge any and all  deposit or other  accounts  (including
without limit an account  evidenced by a certificate of deposit) of each Company
with Bank for all or a part of any  Indebtedness  then due;  provided,  however,
that this authorization shall not affect Companies' obligation to pay, when due,
any  Indebtedness  whether or not account balances are sufficient to pay amounts
due.

     11.9 Any payment of the  Indebtedness  made by mail will be deemed tendered
and received only upon actual receipt by Bank at the address designated for such
payment, whether or not Bank has authorized payment by mail or any other manner,
and (subject to any grace period in Section 10.1(a)) shall not be deemed to have
been made in a timely manner  unless  received on the date due for such payment,
time  being of the  essence.  Companies  expressly  assume  all risks of loss or
liability  resulting  from  non-delivery  or  delay of  delivery  of any item of
payment  transmitted  by mail or in any other manner.  Acceptance by Bank of any
payment in an amount less than the amount then due shall be deemed an acceptance
on account only,  and the failure to pay the entire amount then due shall be and
continue to be an Event of  Default,  and at any time  thereafter  and until the
entire amount then due has been paid, Bank shall be entitled to exercise any and
all rights  conferred upon it herein upon the occurrence of an Event of Default.
Upon the occurrence and during the continuance of an Event of Default, Companies
waive the right to direct the application of any and all payments at any time or
times  hereafter  received  by Bank  from or on behalf  of  Companies.  Upon the
occurrence and during the  continuance of an Event of Default,  Companies  agree
that Bank shall have the continuing  exclusive right to apply and to reapply any
and  all  payments   received  at  any  time  or  times  hereafter  against  the
Indebtedness  in such  manner as Bank may deem  advisable,  consistent  with the
terms  hereof,  notwithstanding  any  entry by Bank  upon any of its  books  and
records.  Companies  expressly  agree that to the extent that Bank  receives any
payment  or  benefit  and such  payment  or  benefit,  or any part  thereof,  is
subsequently invalidated,  declared to be fraudulent or preferential,  set aside
or is required to be repaid to a trustee, receiver, or any other party under any
bankruptcy act, state or federal law, common law or equitable cause, then to the
extent of such payment or benefit,  the Indebtedness or part thereof intended to
be satisfied  shall be revived and continued in full force and effect as if such
payment or benefit had not been made and,  further,  any such repayment by Bank,
to the extent that Bank did not directly  receive a corresponding  cash payment,
shall be added to and be additional Indebtedness payable upon demand by Bank.

<PAGE>




     11.10 In the event  Companies'  obligation to pay interest on the principal
balance of the Note is or becomes in excess of the maximum  interest  rate which
Companies  are  permitted  by law to  contract  or  agree  to  pay,  giving  due
consideration to the execution date of this Agreement,  then, in that event, the
rate of interest  applicable  shall be deemed to be immediately  reduced to such
maximum rate and all  previous  payments in excess of such maximum rate shall be
deemed to have been payments in reduction of principal and not of interest.

     11.11 This Agreement  shall become  effective upon the execution  hereof by
Bank and Companies.

     11.12 COMPANIES AND BANK  ACKNOWLEDGE  THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL  ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING (OR
HAVING HAD THE  OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE,  KNOWINGLY
AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVES ANY RIGHT TO TRIAL BY JURY
IN THE EVENT OF LITIGATION  REGARDING THE  PERFORMANCE OR ENFORCEMENT  OF, OR IN
ANY WAY RELATED TO, THIS AGREEMENT, THE NOTES OR THE INDEBTEDNESS.

     11.13 When used in this Agreement,  the term "Companies"  shall mean all or
any of them. The  obligations  and liabilities of Companies under this Agreement
are joint and several.


<PAGE>


     WITNESS  the  due  execution  hereof  as of the day and  year  first  above
written.

COMERICA BANK                            ARCADIA SERVICES, INC.



By: /s/ David B. Martin           _      By: /s/John E. Elliott, II
    -------------------                      ----------------------
Its:Senior Vice President               Its: President



                                         GRAYROSE, INC.



                                         By: /s/John E. Elliott, II
                                             ----------------------
                                         Its: President



                                         ARCADIA HEALTH SERVICES OF
                                         MICHIGAN, INC.

                                         By: /s/John E. Elliott, II
                                             ----------------------
                                         Its: President



                                         ARCADIA HEALTH SERVICES, INC.

                                         By: /s/John E. Elliott, II
                                             ----------------------
                                         Its: President



<PAGE>



                                   EXHIBIT "A"

                               REQUEST FOR ADVANCE


     Pursuant to the Credit  Agreement  dated as of May 7, 2004  (herein  called
"Agreement"),  the  undersigned,  on behalf of the  Companies,  hereby  requests
COMERICA  BANK  ("Bank") to make a(an)  __________1  Advance to the Companies on
____________, 200_, in the amount of  _________________________________  DOLLARS
($________)  under the  Revolving  Credit  Note dated May __, 2004 issued by the
Companies to Bank (herein called "Note").  The Interest Period for the requested
Advance,  if  applicable,  shall  be  ___________2  months.  The last day of the
Interest  Period for the  amounts  being  converted  or refunded  hereunder,  if
applicable, is ________, 200_.

     The  undersigned,  on behalf of the Companies,  certifies that no event has
occurred or  condition  exists  which  constitutes,  or with the passage of time
and/or giving of notice would  constitute,  a default under the Agreement or the
Note,  and none will exist upon the making of the Advance  requested  hereunder.
The  undersigned  further  certifies,  on  behalf  of the  Companies,  that upon
advancing  the  sum  requested   hereunder,   the  aggregate   principal  amount
outstanding  under the Note  will not  exceed  the face  amount  thereof  or any
advance  formula  applicable to Advances under such Note. If the amount advanced
to the Companies under the Note shall at any time exceed the face amount thereof
or any advance  formula  applicable to Advances  under such Note,  the Companies
will pay such excess amount on demand.

     The undersigned, on behalf of the Companies, hereby authorizes said Bank to
disburse the  proceeds of this  Request for Advance by crediting  the account of
with Bank separately designated by the Companies or as the undersigned, as agent
for the  Companies,  may  otherwise  direct,  unless this Request for Advance is
being submitted for a conversion or refunding,  in which case it shall refund or
convert that portion stated above of the existing outstandings under the Note.

         Dated this ___day of ___________, 200_.

                                                     ARCADIA SERVICES, INC.



                 By:  _____________________________________________________

                 Its: _____________________________________________________


<PAGE>



                                   EXHIBIT "B"

                              REVOLVING CREDIT NOTE


                                                              Detroit, Michigan
$12,000,000                                                        May __, 2004


     On or before  the  Revolving  Credit  Maturity  Date,  FOR VALUE  RECEIVED,
Arcadia Services, Inc., a Michigan corporation, Arcadia Health Services, Inc., a
___________  corporation,  Grayrose,  Inc., a Michigan corporation,  and Arcadia
Health  Services of Michigan,  Inc.,  a Michigan  corporation  (individually,  a
"Company" and, collectively, the "Companies"),  jointly and severally promise to
pay to the order of COMERICA BANK, a Michigan banking corporation (herein called
"Bank") at its Main Office at 500 Woodward Avenue, Detroit,  Michigan, in lawful
money of the United States of America the  indebtedness or so much of the sum of
Twelve Million Dollars ($12,000,000) as may from time to time have been advanced
and then be outstanding  hereunder  pursuant to the Credit Agreement dated as of
May 7, 2004, made by and between Companies and Bank (herein called "Agreement"),
together with interest thereon as hereinafter set forth.

     Each of the  Advances  hereunder  shall  bear  interest  at the  Applicable
Interest  Rate from time to time  applicable  thereto  under the Agreement or as
otherwise determined  thereunder,  and interest shall be computed,  assessed and
payable as set forth in the Agreement.

     This Note is a note under which advances,  repayments and readvances may be
made from time to time,  subject to the terms and  conditions of the  Agreement.
This Note  evidences  borrowing  under,  is subject to, is secured in accordance
with, and may be matured under,  the terms of the Agreement,  to which reference
is hereby made. As additional security for this Note, Company grants Bank a lien
on all property and assets including  deposits and other credits of the Company,
at any time in possession or control of or owing by Bank for any purpose.

     Companies hereby waive presentment for payment,  demand, protest and notice
of dishonor and  nonpayment of this Note and agree that no obligation  hereunder
shall be  discharged  by reason of any  extension,  indulgence,  or  forbearance
granted by any holder of this Note to any party now or hereafter  liable hereon.
Any  transferees  of, or endorser,  guarantor or surety paying this Note in full
shall  succeed  to all  rights  of  Bank,  and Bank  shall  be under no  further
responsibility  for the exercise thereof or the loan evidenced  hereby.  Nothing
herein shall limit any right granted Bank by other instrument or by law.


<PAGE>


     All  capitalized  terms used but not defined herein shall have the meanings
ascribed to them in the Agreement.

                             ARCADIA SERVICES, INC.



                     By:  _____________________________________

                     Its: _____________________________________



                     GRAYROSE, INC.



                     By:  _____________________________________

                     Its: _____________________________________



                     ARCADIA HEALTH SERVICES OF MICHIGAN, INC.



                     By:_______________________________________

                     Its:



                     ARCADIA HEALTH SERVICES, INC.



                     By:  _____________________________________

                     Its: _____________________________________



<PAGE>


                                  SCHEDULE 6.3

                                   LITIGATION

     Aneita  Fowler  filed a Charge of  Discrimination  on 6/10/03  with the St.
Petersburg  Community Affairs Department based on discrimination for sex, female
and race,  black.  The case is being handled by Steve J. Weiss of Hertz,  Scham,
Saretsky,  P.C. Mr.  Weiss  believes  the claim is  completely  lacking in merit
(complainant was replaced by an Afro-American female).





<PAGE>



                                  SCHEDULE 6.5


                                   ERISA PLANS


None
<PAGE>

                                  SCHEDULE 6.8

                                  SUBSIDIARIES


Arcadia Services, Inc. is the parent to the following wholly owned subsidiaries:



      Arcadia Health Services, Inc.

      Arcadia Health Services of Michigan, Inc.

      Grayrose, Inc.

      Arcadia Staff Resources, Inc.

      ASR Staffing, Inc.

      Arcadia Employee Services, Inc.

      Arcadia Medical Products, Inc.

<PAGE>
<TABLE>
<CAPTION>


                                  SCHEDULE 6.16

                     LOCATIONS OF TANGIBLE PERSONAL PROPERTY



----------------------- ------------------------------------ -------------- ---------------------------------------
<S>                   <C>                                  <C>            <C>
Company                 Locations of Tangible                Owned or       If Leased, Name of Lessor
                        Personal Property                    Leased?
----------------------- ------------------------------------ -------------- ---------------------------------------
Arcadia Services, Inc.  26777 Central Park Blvd., Suite 200  Leased         Gateway Office Associates Limited
                        Southfield, MI 44876                                Partnership
----------------------- ------------------------------------ -------------- ---------------------------------------
Grayrose, Inc.          691  North  Squirrel  Road,   Suite  Leased         JFC Sales Company, LP
                        125,
                        Auburn Hills, MI 48326
----------------------- ------------------------------------ -------------- ---------------------------------------
Grayrose, Inc.          7990 Grand River, Suite C            Leased         Livingston Real Properties
                        Brighton, MI 48114
----------------------- ------------------------------------ -------------- ---------------------------------------
Grayrose, Inc.          39092 Garfield Road, Suite 201,      Leased         Monahan Partnership II
                        Clinton Twp., MI 48038
----------------------- ------------------------------------ -------------- ---------------------------------------
Arcadia Staff           414 North Jackson Street, Complex    Leased         The City of Jackson and Enterprise
Resources, Inc.         8718                                                Group of Jackson, Inc.
                        Jackson, MI 49201
----------------------- ------------------------------------ -------------- ---------------------------------------
Grayrose, Inc.          535 North Clipper, Suite 2           Leased         DTN Management
                        Lansing, MI 48912
----------------------- ------------------------------------ -------------- ---------------------------------------
Arcadia Staff           1787 W. Genessee, Suite A            Leased         M.R. Management Company
Resources, Inc.         Lapeer, MI 48446
----------------------- ------------------------------------ -------------- ---------------------------------------
Kevin Block to Provide  26461 Southfield Road                Leased         Kevin Block to Provide
                        Lathrup Village, MI 48076
----------------------- ------------------------------------ -------------- ---------------------------------------
Arcadia Staff           18320 Middlebelt Road                Leased         Watershed LLC
Resources, Inc.         Livonia, MI 48152
----------------------- ------------------------------------ -------------- ---------------------------------------
Grayrose, Inc.          18706 Eureka Road                    Leased         BGM Properties, LLC
                        Southgate, MI 48195
----------------------- ------------------------------------ -------------- ---------------------------------------
Arcadia Health          105 Mall Blvd., Suite 283W           Leased         Mart/Hotel Limited Partnership
Services, Inc.          Monroeville, PA 15146
----------------------- ------------------------------------ -------------- ---------------------------------------
Arcadia Health          4725 McKnight Road, Suite 110,       Leased         McNight Northland, LLC
Services, Inc.          Pittsburgh, PA 15237
----------------------- ------------------------------------ -------------- ---------------------------------------
Arcadia Health          6061 Stage Road, Suite 7             Leased         Norman Long and Bartlett Realty
Services, Inc.          Barlett, TN 38134
----------------------- ------------------------------------ -------------- ---------------------------------------
Arcadia Health          2600 Southwest Freeway, Suite 716,   Leased         Yarico, Inc.
Services, Inc.          Houston, TX 77098
----------------------- ------------------------------------ -------------- ---------------------------------------
Arcadia Health          762 Independence Blvd., Suite 798,   Leased         Horizon Investment Co.
Services, Inc.          Virginia Beach, VA 23455
----------------------- ------------------------------------ -------------- ---------------------------------------
</TABLE>
<PAGE>

                                  SCHEDULE 8.6


                                      LIENS

None


<PAGE>


                                  SCHEDULE 6.10

                              ENVIRONMENTAL MATTERS

None