Document:

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                                                                     EXHIBIT 4.1

                            STOCK PURCHASE AGREEMENT

      THIS STOCK PURCHASE AGREEMENT ("Agreement") is entered into on April ____,
2005 by and between Arcadia Resources, Inc., a Nevada corporation ("Seller" or
"Company"), and ___________________ ("Purchaser").

                                   RECITALS:

      A. The Company desires to issue and sell to Purchaser shares of its
authorized common stock, $0.001 par value, (the "Common Stock"), subject to the
terms and conditions of this Agreement.

      B. The Purchaser, which is an "accredited investor" as that term is
defined in Rule 501(a) of Regulation D promulgated by the U.S. Securities and
Exchange Commission (the "Commission"), desires to purchase from the Company
shares of the Common Stock, subject to the terms of this Agreement.

      NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Purchaser and Seller agree as
follows:

      1. SALE OF STOCK. Upon execution of this Agreement, Purchaser hereby
agrees to and does purchase from Seller, and Seller hereby agrees to and does
sell to Purchaser, One Million Two Hundred Twelve Thousand One Hundred
Twenty-One (1,212,121) shares of the Company's original issue Common Stock (the
"Acquired Stock"). No fractional shares of the Acquired Stock shall be issued to
Purchaser.

      2. PURCHASE PRICE. The purchase price of the Acquired Stock is U.S. $1.65
per share for a total aggregate purchase price for all of the Acquired Stock of
Two Million ($2,000,000.00) and No/100 U.S. Dollars in total ("Purchase Price").

      3. PAYMENT OF PURCHASE PRICE. Contemporaneously with the execution of this
Agreement, the Purchase Price shall be paid in full in U.S. Dollars by certified
check or wire transfer.

      4. ISSUANCE OF COMMON STOCK CERTIFICATE. Upon Seller's receipt of payment
in full of the Purchase Price, Seller shall deliver to its transfer agent
irrevocable instructions to issue and deliver to Purchaser, at the address
designated on the signature page, one Common Stock certificate evidencing
Purchaser's ownership of the Acquired Shares, subject to the terms and
conditions of this Agreement.

      5. ACKNOWLEDGMENTS, COVENANTS, REPRESENTATIONS AND WARRANTIES OF
PURCHASER. Purchaser acknowledges, covenants, represents and warrants to Seller
each of the following:

            (a) ORGANIZATION; AUTHORITY; ENFORCEABILITY. Purchaser is an entity
      duly organized, validly existing and in good standing under the laws of
      the jurisdiction of its organization with full power and authority to
      enter into and to consummate the transactions contemplated hereby and
      otherwise to carry out its obligations hereunder.

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      The execution, delivery and performance by such Purchaser of the
      transactions contemplated by this Agreement has been duly authorized by
      all necessary corporate or similar action on the part of such Purchaser.
      This Agreement and any related transaction documents have been duly
      executed by such Purchaser, and when delivered by such Purchaser in
      accordance with the terms hereof, will constitute the valid and legally
      binding obligation of such Purchaser, enforceable against it in accordance
      with its terms, subject to laws of general application relating to
      bankruptcy, insolvency, reorganization, moratorium or other similar laws
      affecting creditors' rights generally and rules of law governing specific
      performance, injunctive relief, or other equitable remedies.

            (b) GENERAL SOLICITATION. Purchaser is not purchasing the Acquired
      Stock as a result of any advertisement, article, notice or other
      communication regarding the Acquired Stock published in any newspaper,
      magazine or similar media or broadcast over television or radio or
      presented at any seminar or any other general solicitation or general
      advertisement.

            (c) NO PUBLIC SALE OR DISTRIBUTION. Purchaser is acquiring the
      Acquired Stock for its own account and not with a view towards, or for
      resale in connection with, the public sale or distribution thereof.
      Purchaser is acquiring the Acquired Stock in the ordinary course of its
      business. Purchaser does not have any agreement or understanding, directly
      or indirectly, with any Person to distribute any of the Acquired Stock.

            (d) ACCREDITED INVESTOR STATUS. Purchaser is an "accredited
      investor" as that term is defined in Rule 501(a) of Regulation D
      promulgated by the Commission.

            (e) RESIDENCY. Purchaser is a resident of the State designated on
      the signature page.

            (f) RELIANCE ON EXEMPTIONS. Purchaser acknowledges that the Acquired
      Stock is being offered and sold to it in reliance on specific exemptions
      from the registration requirements of United States federal and applicable
      state securities laws and that the Company is relying in part upon the
      truth and accuracy of, and such Purchaser's compliance with, the
      representations, covenants, warranties, agreements, acknowledgments and
      understandings of such Purchaser set forth herein in order to determine
      the availability of such exemptions and the eligibility of such Purchaser
      to acquire the Acquired Stock.

            (g) INFORMATION. Purchaser and its advisors, if any, have obtained
      or have been furnished with all publicly available financial, operational,
      business and other data, statements, information and materials relating to
      the business, finances, prospects and operations of the Company and such
      other publicly available materials relating to the offer and sale of the
      Acquired Stock as have been requested by such Purchaser. Purchaser and its
      advisors, if any, have been afforded the opportunity to ask questions of
      the Company, and all such questions have been answered to its full
      satisfaction. Neither such inquiries nor any other due diligence
      investigations conducted by such Purchaser or its advisors, if any, or its
      representatives shall modify, amend or affect the terms and conditions of
      this Agreement or the acknowledgements, covenants, representations and

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      warranties given by Purchaser hereunder. Purchaser understands that its
      investment in the Acquired Stock involves a high degree of risk. No oral
      representations have been made or oral information furnished to Purchaser
      or its representatives, if any, in connection with the purchase of the
      Acquired Stock.

            (h) NO GOVERNMENTAL REVIEW. Purchaser understands that no United
      States federal or state agency or any other government or governmental
      agency has passed on or made any recommendation or endorsement of the
      Acquired Stock or the fairness or suitability of the investment in the
      Acquired Stock, nor have such authorities passed upon or endorsed the
      merits of the offering of the Acquired Stock.

            (i) EXPERIENCE OF PURCHASER. Purchaser, either alone or together
      with its representatives, has such knowledge, sophistication and
      experience in business and financial matters, including investing in
      companies engaged in the business in which the Company is engaged, so as
      to be capable of evaluating the merits and risks of the prospective
      investment in the Acquired Stock, and has so evaluated the merits and
      risks of such investment. Purchaser is able to bear the economic risk of
      an investment in the Acquired Stock and is able to afford a complete loss
      of such investment. Purchaser has adequate means of providing for its
      financial needs and contingencies and is able to bear the substantial
      economic risk of an investment in the Acquired Stock for an indefinite
      period.

            (j) SALE AND ISSUANCE OF ADDITIONAL SHARES TO OTHERS. Purchaser
      understands and agrees that additional shares of the Company's Common
      Stock may be issued by the Company from time to time, whether as part of
      the same offering by which Purchaser purchases the Acquired Shares or a
      different offering or other event, which could result in the dilution of
      the Purchaser's percentage interest and shareholding position in the
      Company.

            (k) UNREGISTERED STOCK; REGISTRATION OF STOCK. Purchaser understands
      that the Acquired Stock has not been registered under the Securities Act
      of 1933, as amended (the "Act"), or under any applicable state securities
      law, in reliance upon available exemptions from registration. Accordingly,
      Purchaser's right or ability to sell, transfer, pledge or otherwise
      dispose of the Acquired Stock is severely limited by applicable federal
      and state securities laws. Purchaser understands that the Acquired Stock
      cannot be resold unless it is registered or unless an exemption from
      registration is available thereunder, that the Company will prepare and
      file with the Commission a registration statement under the Securities Act
      of 1933 covering all of the Acquired Stock for a secondary or resale
      offering to be made on a continuous basis pursuant to Rule 415, that the
      registration statement shall be on Form S-1 or such other form as the
      Company determines appropriate for such registration, and that the Company
      shall use reasonable efforts to cause the registration statement to be
      declared effective by the Commission not later than 90 days after the date
      of this Agreement. The Acquired Stock may only be disposed of in
      compliance with applicable state and federal securities laws. In
      connection with any transfer of the Acquired Stock other than pursuant to
      an effective registration statement or to the Company, the Company may
      require the transferor thereof to provide to the Company an opinion of
      counsel, the form and substance of which opinion shall be reasonably
      satisfactory to the Company, to the effect that such transfer does not
      require

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      registration of such transferred securities under the Securities Act.
      Purchaser agrees that any removal of the restrictive legend from
      certificates representing the Acquired Stock, which removal shall first be
      authorized by the Company subject to the terms of this Agreement, is
      predicated upon the Company's reliance on, and the Purchaser's agreement
      that, and Purchaser hereby agrees that, the Purchaser will not sell any
      Acquired Stock except pursuant to either the registration requirements of
      the Securities Act, including any applicable prospectus delivery
      requirements, or an exemption therefrom.

            (l) RESTRICTIVE LEGEND. Purchaser agrees to the imprinting, so long
      as is required under applicable federal and state securities laws, of a
      legend on the stock certificate evidencing the Acquired Stock in
      substantially the following form:

      THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SHARES HAVE
      BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED
      IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THESE SHARES
      UNDER THE SECURITIES ACT OF 1933 OR AN OPINION OF THE COMPANY'S COUNSEL
      THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT.

            (m) INDEMNIFICATION. Purchaser agrees to indemnify, hold harmless
      and defend the Company, its affiliates, directors, officers and employees
      from and against all damages, losses, cost and expenses (including
      reasonable attorney fees) that they may incur by reason of any breach of
      the acknowledgements, covenants, representations or warranties made by
      Purchaser in this Agreement. Purchaser understands and acknowledges that
      the representations, acknowledgements, warranties, covenants, agreements
      and statements provided by Purchaser herein may and shall be relied upon
      by the Company, its affiliates, directors, officers and employees in the
      execution and performance of this Agreement.

            (n) NON-PUBLIC INFORMATION. Purchaser has not requested nor been
      furnished with any information known or believed to constitute material
      non-public information of the Company, unless prior thereto Purchaser
      shall have executed a written agreement acceptable to the Company
      regarding the confidentiality and use of such information.

            (o) BROKERS/FINDERS. Except for fees payable by the Company to
      Sandgrain Securities, Inc. in connection with the sale and purchase of the
      Acquired Shares by Purchaser, Purchaser represents and agrees that no
      brokerage or finder's fees, commissions or other amounts are or will be
      payable by the Company, on account of any agreement, understanding or
      undertaking by Purchaser, to any broker, financial advisor or consultant,
      finder, placement agent, investment banker, bank or other Person with
      respect to the transactions contemplated by this Agreement.

            (p) REGULATORY DISCLOSURES. Purchaser understands that the Company
      shall, within four business days following the execution of this
      Agreement, file a Current Report on Form 8-K with the Commission,
      disclosing the transactions

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      contemplated hereby and may make such other filings and notices in the
      manner and time required by the Commission, including the filing of this
      Agreement if required, as well as any filings that may be required by
      state regulators.

            (q) REPLACEMENT OF CERTIFICATES. Purchaser agrees that if any
      certificate or instrument evidencing any Acquired Stock is mutilated,
      lost, stolen or destroyed, the Company shall issue or cause to be issued
      in exchange and substitution for and upon cancellation thereof, or in lieu
      of and substitution therefor, a new certificate or instrument, but only
      upon receipt of evidence reasonably satisfactory to the Company of such
      loss, theft or destruction and customary and reasonable indemnity or other
      form of security, if required by the Company.

      6. ACKNOWLEDGMENTS, COVENANTS, REPRESENTATIONS AND WARRANTIES OF THE
COMPANY. The Company acknowledges, covenants, represents and warrants to
Purchaser each of the following:

            (a) ORGANIZATION; AUTHORITY; ENFORCEABILITY. The Company is an
      entity duly organized, validly existing and in good standing under the
      laws of the jurisdiction of its organization with full power and authority
      to enter into and to consummate the transactions contemplated hereby and
      otherwise to carry out its obligations hereunder. The execution, delivery
      and performance by the Company of the transactions contemplated by this
      Agreement has been duly authorized by all necessary corporate or similar
      action on the part of the Company. This Agreement and any related
      transaction documents to which it is a party have been duly executed by
      the Company, and when delivered by the Company in accordance with the
      terms hereof, will constitute the valid and legally binding obligation of
      the Company, enforceable against it in accordance with its terms, subject
      to laws of general application relating to bankruptcy, insolvency,
      reorganization, moratorium or other similar laws affecting creditors'
      rights generally and rules of law governing specific performance,
      injunctive relief, or other equitable remedies.

            (b) CAPITALIZATION. The authorized and outstanding capitalization of
      the Company is as described in the Company's most recent periodic, current
      or other report or documents filed with the Commission or otherwise
      disclosed to purchaser upon its request. The Company has not issued any
      capital stock since such filing, other than pursuant to the exercise of
      employee stock options under the Company's stock option plans and pursuant
      to the conversion or exercise of Common Stock options, warrants or other
      rights, excluding any issuances of Common Stock not required to be
      reported on Form 8-K. All shares of the Company's issued and outstanding
      capital stock have been duly authorized, are validly issued and
      outstanding, and are fully paid and nonassessable. There are no dividends
      which have accrued or been declared but are unpaid on the capital stock of
      the Company.

            (c) ISSUANCE OF THE ACQUIRED STOCK. The Acquired Stock is duly
      authorized and, when issued and paid for in accordance with the terms
      hereof, will be duly and validly issued, fully paid and nonassessable,
      free and clear of all rights of third parties, other than any rights
      created by or imposed on the holders thereof through no action of the
      Company.

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            (d) NO CONFLICTS. The execution, delivery and performance of this
      Agreement by the Company and the consummation by the Company of the
      transactions contemplated hereby do not and will not conflict with or
      violate any provision of the Company's certificate or articles of
      incorporation, bylaws or other organizational or charter documents.

            (e) LITIGATION. The Company has no knowledge of any action, suit,
      inquiry, notice of violation, proceeding or investigation pending or
      threatened against the Company, before or by any court, arbitrator,
      governmental or administrative agency or regulatory authority (federal,
      state, county, local or foreign) which adversely affects or challenges the
      legality, validity or enforceability of this Agreement or the Acquired
      Stock.

            (f) LICENSES; COMPLIANCE WITH REGULATORY REQUIREMENTS. The Company
      holds all material authorizations, consents, approvals, franchises,
      licenses and permits required under applicable law or regulation for the
      operation of the business of the Company as presently operated

            (g) PRIVATE PLACEMENT. Assuming the accuracy of the Purchaser's
      acknowledgements, representations and warranties set forth in Section 5,
      no registration under the Securities Act is required for the offer and
      sale of the Acquired Stock by the Company to the Purchaser as contemplated
      hereby.

      7. GOVERNING LAW AND ARBITRATION. This Agreement shall be governed by and
construed in accordance with the laws of the State of Michigan, notwithstanding
the fact that either party is or may hereafter become domiciled or located in a
different state or country. Any dispute, controversy or claim arising out of or
relating to this Agreement, whether arising in contract, tort or otherwise shall
be resolved in accordance with the rules of the American Arbitration
Association, except for any equitable or injunctive relief sought under this
Agreement. The arbitration shall be held at a location within Oakland County,
Michigan. The parties agree that any arbitration award rendered on any claim
submitted to arbitration shall be final and binding upon the parties and not
subject to appeal and that judgment may be entered upon any arbitration award by
any circuit court located in Michigan.

      8. SUCCESSORS BOUND BY AGREEMENT. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns.
Purchaser may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Company, which may be withheld. This
Agreement is intended for the benefit of the parties hereto and their respective
successors and permitted assigns and is not for the benefit of, nor may any
provision hereof be enforced by, any other person.

      9. WAIVER. The waiver of a breach of any provision of this Agreement by
any party shall not operate or be construed as a waiver of any subsequent
breach. Each and every right, remedy and power granted herein to any party or
allowed by law or equity shall be cumulative and not exclusive of any other.

      10. AMENDMENT OF AGREEMENT. This Agreement may be altered or amended in
any of its provisions only by the written agreement of the parties hereto.

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      11. INTERPRETATION OF AGREEMENT. This Agreement constitutes the entire
Agreement between the parties with respect to the subject matter hereof and
supersedes any and all other prior or contemporaneous agreements, either oral or
written, between the parties with respect to the subject matter hereof. This
Agreement, or any facsimile hereof, may be executed by any number of
counterparts, each of which shall constitute an original Agreement, and all of
which shall constitute one and the same instrument. Headings herein are for
convenience only and shall not be deemed to limit or affect any of the
provisions hereof.

      12. SURVIVAL OF COVENANTS, REPRESENTATIONS, WARRANTIES AND INDEMNITIES.
All covenants, acknowledgements, representations, warranties and indemnities
contained herein shall survive the execution and delivery of this Agreement.

      The parties hereto have executed and delivered this Stock Purchase
Agreement the date first written above.

SELLER:

ARCADIA RESOURCES, INC.,
a Nevada corporation

By:________________________________________

Its:_______________________________________

PURCHASER:

SSN:_______________________________________

State of Residence:________________________

Mailing Address for Share Certificate:

___________________________________________

___________________________________________

___________________________________________

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                                                                     EXHIBIT 4.2

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

                            ARCADIA RESOURCES, INC.
                        12% CONVERTIBLE PROMISSORY NOTE

$5,000,000.00                                                     APRIL 27, 2005

      FOR VALUE RECEIVED, the undersigned, Arcadia Resources, Inc., a Nevada
corporation (`Payor"), having its executive office and principal place of
business at 26777 Central Park Boulevard, Suite 200, Southfield, Michigan 48076,
hereby promises to pay to Jana Master Fund, Ltd. ("Payee"), having an address at
200 Park Avenue, Suite 3900, New York, NY 10166, at Payee's address set forth
above (or at such other place as Payee may from time to-time hereafter direct by
notice in writing to Payor), the principal sum of FIVE MILLION DOLLARS
($5,000,000.00), in such coin or currency of the United States of America as at
the time shall be legal tender for the payment of public and private debts in
accordance with the terms hereof.

1.    PAYMENT OF PRINCIPAL AND INTEREST.

      1.1   The principal amount of this Note outstanding from time to time
            shall bear simple interest at the annual rate (the "Note Rate") of
            twelve percent (12%) from the date hereof until the entire principal
            balance due under this Note has been paid in full.

      1.2   The unpaid principal balance shall be due and payable on May 1, 2006
            ("Maturity Date"). Accrued unpaid interest on the unpaid principal
            balance due under this Note at the Note Rate shall be due and
            payable on the following dates: July 31, 2005; October 31, 2005;
            January 31, 2006; and the Maturity Date.

      1.3   Payor shall not have the right to prepay any portion of the
            principal amount due under this Note until June 27, 2005 ("Permitted
            Prepayment Date"). At any time and from time to time after the
            Permitted Prepayment Date, Payor may prepay this Note in whole or in
            part, together with (i) the unpaid interest thereon accrued through
            the date of prepayment, and (ii) a prepayment fee equal to 2.5% of
            the portion of then outstanding principal balance that is being
            prepaid.

      1.4   All payments (including prepayments) made by the Payor on this Note
            shall be applied first to the payment of accrued unpaid interest on
            this Note and then to the reduction of the unpaid principal balance
            of this Note.

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      1.5   In the event that the date for the payment of any amount payable
            under this Note falls due on a Saturday, Sunday or public holiday
            under the laws of the State of New York, the time for payment of
            such amount shall be extended to the next succeeding business day
            and interest at the Note Rate shall continue to accrue on any
            principal amount so effected until the payment thereof on such
            extended due date.

2.    REPLACEMENT OF NOTE.

      2.1   In the event that this Note is mutilated, destroyed, lost or stolen,
            Payor shall, at its sole expense, execute, register and deliver a
            new Note, in exchange and substitution for this Note, if mutilated,
            or in lieu of and substitution for this Note, if destroyed, lost or
            stolen. In the case of destruction, loss or theft, Payee shall
            furnish to Payor indemnity reasonably satisfactory to Payor, and in
            any such case, and in the case of mutilation, Payee shall also
            furnish to Payor evidence to its reasonable satisfaction of the
            mutilation, destruction, loss or theft of this Note and of the
            ownership thereof. Any replacement Note so issued shall be in the
            same outstanding principal amount as this Note and dated the date to
            which interest shall have been paid on this Note or, if no interest
            shall have yet been paid, dated the date of this Note.

      2.2   Every Note issued pursuant to the provisions of Section 2.1 above in
            substitution for this Note shall constitute an additional
            contractual obligation of the Payor, whether or not this Note shall
            be found at any time or be enforceable by anyone.

3.    INTENTIONALLY OMITTED

4.    COVENANTS OF PAYOR.

      Payor covenants and agrees that, so long as this Note remains outstanding
      and unpaid, in whole, or in part:

      4.1   Payor will not sell, transfer or dispose of a material part of its
            assets without obtaining Payee's written consent, other than
            inventory in its ordinary course of business;

      4.2   Intentionally Omitted

      4.3   Payor will promptly pay and discharge all lawful taxes, assessments
            and governmental charges or levies imposed upon it, its income and
            profits, or any of its property, before the same shall become in
            default, as well as all lawful claims for labor, materials and
            supplies which, if unpaid, might become a lien or charge upon such
            properties or any part thereof; provided, however, that Payor or
            such subsidiary shall not be required to pay and discharge any such
            tax, assessment, charge, levy or claim so long as the validity
            thereof shall be contested in good faith by appropriate proceedings
            and Payor or such subsidiary, as the case may be, shall set aside on
            its books adequate reserves with respect to any such tax,
            assessment, charge, levy or claim so contested;

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      4.4   Payor will do or cause to be done all things necessary to preserve
            and keep in full force and effect its corporate existence, rights
            and franchises and substantially comply with all laws applicable to
            Payor as its counsel may advise;

      4.5   Payor will at all times maintain, preserve, protect and keep its
            property used or useful in the conduct of its business in good
            repair, working order and condition (except for the effects of
            reasonable wear and tear in the ordinary course of business) and
            will from time to time, make all necessary and proper repairs,
            renewals, replacements, betterments and improvements thereto;

      4.6   Payor will keep adequately insured, by financially sound reputable
            insurers, all property of a character usually insured by similar
            corporations and carry such other insurance as is usually carried by
            similar corporations;

      4.7   Payor will, promptly following the occurrence of an Event of Default
            or of any condition or event which, with the giving of notice or the
            lapse of time or both, would constitute an Event of Default, furnish
            a statement of Payor's Chief Executive Officer or Chief Financial
            Officer to Payee setting forth the details of such Event of Default
            or condition or event and the action which Payor intends to take
            with respect thereto; and

      4.8   Payor will, and will cause each of its subsidiaries to, at all times
            maintain books of account in which all of its financial transactions
            are duly recorded in conformance with generally accepted accounting
            principles.

5.    EVENTS OF DEFAULT. The following events each constitute an "Event of
      Default":

      5.1   The dissolution of Payor or any vote in favor thereof by the board
            of directors and shareholders of Payor; or

      5.2   Payor makes an assignment for the benefit of creditors, or files
            with a court of competent jurisdiction an application for
            appointment of a receiver or similar official with respect to it or
            any substantial part of its assets, or Payor files a petition
            seeking relief under any provision of the Federal Bankruptcy Code or
            any other federal or state statute now or hereafter in effect
            affording relief to debtors, or any such application or petition is
            filed against Payor, which application or petition is not dismissed
            or withdrawn within sixty (60) days from the date of its filing; or

      5.3   Payor fails to pay the principal amount, or interest on, or any
            other amount payable under this Note within five (5) days of when
            the same becomes due and payable; or

      5.4   Payor admits in writing its inability to pay its debts as they
            mature; or

      5.5   Payor sells all or substantially all of its assets or merges or is
            consolidated with or into another corporation other than a
            transaction whose primary purpose is to re-domicile the Payor ; or

      5.6   A proceeding is commenced to foreclose a security interest or lien
            in any

                                   Page 3 of 6
<PAGE>

            property or assets of Payor as a result of a default in the payment
            or performance of any debt (in excess of $350,000 and secured by
            such property or assets) of Payor or of any subsidiary of Payor; or

      5.7   A final judgment for the payment of money in excess of $350,000 is
            entered against Payor by a court of competent jurisdiction, and such
            judgment is not discharged (nor the discharge thereof duly provided
            for) in accordance with its terms, nor a stay of execution thereof
            procured, within sixty (60) days after the date such judgment is
            entered, and, within such period (or such longer period during which
            execution of such judgment is effectively stayed), an appeal
            therefrom has not been prosecuted and the execution thereof caused
            to be stayed during such appeal; or

      5.8   An attachment or garnishment is levied against the assets or
            properties of Payor or any subsidiary of Payor involving an amount
            in excess of $350,000 and such levy is not vacated, bonded or
            otherwise terminated within sixty (60) days after the date of its
            effectiveness; or

      5.9   Payor defaults in the due observance or performance of any covenant,
            condition or agreement on the part of Payor to be observed or
            performed pursuant to the terms of this Note (other than the default
            specified in Section 5.3 above) and such default continues uncured
            for a period of thirty (30) days from the date Payor receives
            written notice from the Payee.

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

6.    SUITS FOR ENFORCEMENT AND REMEDIES.

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

7.    UNCONDITIONAL OBLIGATION; FEES, WAIVERS, OTHER.

                                   Page 4 of 6
<PAGE>

      7.1   The obligation to make the payments provided for in this Note are
            absolute and unconditional and are not subject to any defense,
            set-off, counterclaim, rescission, recoupment or adjustment
            whatsoever.

      7.2   If, following the occurrence of an Event of Default, Payee shall
            seek to enforce the collection of any amount of principal of and/or
            interest on this Note, there shall be immediately due and payable
            from Payor, in addition to the then unpaid principal of, and accrued
            unpaid interest on, this Note, all reasonable costs and expenses
            incurred by Payee in connection therewith, including, without
            limitation, reasonable attorneys' fees and disbursements.

      7.3   No forbearance, indulgence, delay or failure to exercise any right
            or remedy with respect to this Note shall operate as a waiver or as
            an acquiescence in any default, nor shall any single or partial
            exercise of any right or remedy preclude any other or further
            exercise thereof or the exercise of any other right or remedy.

      7.4   This Note may not be modified or discharged (other than by payment)
            except by a writing duly executed by Payor and Payee.

      7.5   Payor hereby expressly waives demand and presentment for payment,
            notice of nonpayment, notice of dishonor, protest, notice of
            protest, bringing of suit, and diligence in taking any action to
            collect amounts called for hereunder, and shall be directly and
            primarily liable for the payment of all sums owing and to be owing
            hereon, regardless of and without any notice, diligence, act or
            omission with respect to the collection of any amount called for
            hereunder or in connection with any right, lien, interest or
            property at any and all times which Payee had or is existing as
            security for any amount called for hereunder.

8. CONVERSION RIGHTS. At any time in which principal is outstanding under this
Note, the Payee shall have the unconditional right upon irrevocable written
notice to Payor to convert all of the outstanding principal, accrued, but unpaid
interest and any other amounts owing under this Note into shares of common stock
of the Payor (the "Conversion Shares") at a rate of one (1) share of common
stock per $2.25 of the amount outstanding under this Note.

9. REGISTRATION RIGHTS. The Company shall include the maximum amount of
Conversion Shares issuable as of the date hereof in the pending S-1 Registration
Statement which is subject to review and approval by the SEC.

10. RESTRICTION ON TRANSFER. This Note has been acquired for investment, and
neither this Note nor any of the Conversion Shares issuable pursuant to a
conversion pursuant to Section 8 herein have been registered under the
securities laws of the United States of America or any state thereof.
Accordingly, no interest in this Note may be offered for sale, sold or
transferred in the absence of registration and qualification of this Note or the
Conversion Shares, as the case may be, under applicable federal and state
securities laws or an opinion of counsel of Payee reasonably satisfactory to
Payor that such registration and qualification are not required.

11.   MISCELLANEOUS.

      11.1  The headings of the various paragraphs of this Note are for
            convenience of

                                   Page 5 of 6
<PAGE>

            reference only and shall in no way modify any of the terms or
            provisions of this Note.

      11.2  All notices required or permitted to be given hereunder shall be in
            writing and shall be deemed to have been duly given when personally
            delivered or sent by registered or certified mail (return receipt
            requested, postage prepaid), facsimile transmission or overnight
            courier to the address of the intended recipient as set forth in the
            preamble to this Note or at such other address as the intended
            recipient shall have hereafter given to the other party hereto
            pursuant to the provisions of this Note.

      11.3  This Note and the obligations of Payor and the rights of Payee shall
            be governed by and construed in accordance with the substantive laws
            of the State of New York without giving effect to the choice of laws
            rules thereof.

      11.4  This Note shall bind Payor and its successors and assigns.

                                           ARCADIA RESOURCES, INC.

                                           By: /S/ JOHN E. ELLIOTT, III
                                              ---------------------------------

                                               John E. Elliott, III

                                           Its: Chief Executive Officer

Accepted and Agreed to:

JANA MASTER FUND LTD.

By: /S/ MARC LEHMANN
   ----------------------

Its:_____________________

Title: Partner

                                   Page 6 of 6

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