EXHIBIT 4.29
EXHIBIT A
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"). NO INTEREST IN THIS NOTE MAY BE OFFERED OR SOLD EXCEPT PURSUANT TO
(i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (ii) TO THE EXTENT
APPLICABLE, PURSUANT TO RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE
ACT), OR (iii) AN EXEMPTION FROM REGISTRATION UNDER THE ACT WHERE THE HOLDER HAS
FURNISHED TO THE PAYOR AN ACCEPTABLE OPINION OF ITS COUNSEL THAT AN EXEMPTION
PROM REGISTRATION UNDER THE ACT IS AVAILABLE.
ARCADIA RESOURCES, INC.
PROMISSORY NOTE
$2,564,103.00 MARCH 20, 2007
FOR VALUE RECEIVED, the undersigned, Arcadia Resources, Inc., a Nevada
corporation ("Payor"), having its executive office and principal place of
business at 26777 Central Park Boulevard, Suite 200, Southfield, Michigan 48076,
hereby promises to pay to JANA Master Fund, Ltd. ("Payee"), having an address at
200 Park Avenue, Suite 3300, New York, NY 10166, at Payee's address set forth
above (or at such other place as Payee may from time-to-time hereafter direct by
notice in writing to Payor), the principal sum of TWO MILLION FIVE HUNDRED SIXTY
FOUR THOUSAND ONE HUNDRED THREE DOLLARS ($2,564,103), in such coin or currency
of the United States of America as at the time shall be legal tender for the
payment of public and private debts in accordance with the terms hereof.
1. PAYMENT OF PRINCIPAL AND INTEREST.
1.1 The principal amount of this Note outstanding from time to time shall
bear simple interest at the annual rate (the "Note Rate") equal to the
One Year Libor Rate (as such rate is published in the Wall Street
Journal) plus seven and one half percent (7.5%) from the date hereof
until the entire principal balance due under this Note has been paid
in full; provided, however, that in the event the entire principal
balance due under this Note has not been paid in full by May 15, 2007,
an additional interest charge equal to 1% of the outstanding principal
balance under the this Note shall be added to the outstanding
principal balance on May 16, 2007 and on the fifteenth (15th) day of
each month thereafter.
1.2 The unpaid principal balance shall be due and payable on January 31,
2008 ("Maturity Date"). Accrued unpaid interest on the unpaid
principal balance due under this Note at the Note Rate shall be due
and payable on the following dates: June 30, 2007; September 30, 2007;
December 31, 2007; and the Maturity Date.
1.3 Intentionally Deleted.
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1.4 All payments (including prepayments) made by the Payor on this Note
shall be applied first to the payment of accrued unpaid interest on
this Note and then to the reduction of the unpaid principal balance of
this Note.
1.5 In the event that the date for the payment of any amount payable under
this Note falls due on a Saturday, Sunday or public holiday under the
laws of the State of New York, the time for payment of such amount
shall be extended to the next succeeding business day and interest at
the Note Rate shall continue to accrue on any principal amount so
effected until the payment thereof on such extended due date.
2. REPLACEMENT OF NOTE.
2.1 In the event that this Note is mutilated, destroyed, lost or stolen,
Payor shall, at its sole expense, execute, register and deliver a new
Note, in exchange and substitution for this Note, if mutilated, or in
lieu of and substitution for this Note, if destroyed, lost or stolen.
In the case of destruction, loss or theft, Payee shall furnish to
Payor indemnity reasonably satisfactory to Payor, and in any such
case, and in the case of mutilation, Payee shall also furnish to Payor
evidence to its reasonable satisfaction of the mutilation,
destruction, loss or theft of this Note and of the ownership thereof.
Any replacement Note so issued shall be in the same outstanding
principal amount as this Note and dated the date to which interest
shall have been paid on this Note or, if no interest shall have yet
been paid, dated the date of this Note.
2.2 Every Note issued pursuant to the provisions of Section 2.1 above in
substitution for this Note shall constitute an additional contractual
obligation of the Payor, whether or not this Note shall be found at
any time or be enforceable by anyone.
3. INTENTIONALLY OMITTED
4. COVENANTS OF PAYOR.
Payor, on behalf of itself and its subsidiaries, covenants and agrees that,
so long as this Note remains outstanding and unpaid, in whole, or in part:
4.1 Payor and its subsidiaries will not sell, transfer or dispose of, nor
permit or suffer the placement of any lien (statutory or other),
priority, security interest, encumbrance or any other preferential
arrangement upon, any of their material assets (including but not
limited to real property and Payor's equity interests in such
subsidiaries) without obtaining Payee's written consent, other than
inventory in the ordinary course of business;
4.2 Payor shall upon Payee's request furnish Payee with monthly financial
updates;
4.3 Payor and its subsidiaries will not pay any type of bonus to senior
executive officers unless Payor's earnings before interest, taxes,
depreciation and amortization ("EBITDA") for the fiscal year ending
March 30, 2007 is greater
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than Eleven Million Dollars ($11,000,000) or Payee otherwise gives its
written consent;
4.4 Payor and its subsidiaries will not engage in sale/lease back
transactions wherein real or personal property of Payor or its
subsidiaries is sold and then reacquired in any type of lease
transaction if the aggregate amount of all such transactions would
exceed Five Million Dollars ($5,000,000);
4.5 Payor and its subsidiaries will promptly pay and discharge all lawful
taxes, assessments and governmental charges or levies imposed upon any
of them, their income and profits, or any of their property, before
the same shall become in default, as well as all lawful claims for
labor, materials and supplies which, if unpaid, might become a lien or
charge upon such properties or any part thereof; provided, however,
that Payor or such subsidiary shall not be required to pay and
discharge any such tax, assessment, charge, levy or claim so long as
the validity thereof shall be contested in good faith by appropriate
proceedings and Payor or such subsidiary, as the case may be, shall
set aside on its books adequate reserves with respect to any such tax,
assessment, charge, levy or claim so contested;
4.6 Payor and its subsidiaries will do or cause to be done all things
necessary to preserve and keep in full force and effect each of their
corporate existence, rights and franchises and substantially comply
with all laws applicable to them as their counsel may advise;
4.7 Except with respect to any debt owing to Payee or the refinancing of
any existing debt of Payor and/or its subsidiaries owing to Payee,
Payor and its subsidiaries will not: (i) incur any obligation for
borrowed money, any obligation evidenced by bonds, notes or similar
instruments (including any obligations incurred in the acquisition of
property, assets or business), any reimbursement obligation, any
deferred purchase price obligation, any guarantees of any such
obligations, or any similar obligations (collectively, "debt") which
is senior or pari passu to the debt under this Note, or to which the
debt under this Note would be structurally subordinate, if such debt
together with such existing debt of Payor and its subsidiaries would
exceed Twenty Five Million Dollars ($25,000,000), without Payee's
consent or (ii) incur debt junior to the debt under this Note in an
aggregate amount which exceeds Twenty Five Million Dollars
($25,000,000), other than to the extent such junior debt is issued to
finance acquisitions in the ordinary course of Payor or its
subsidiaries' business, without Payee's consent;
4.8 Payor and its subsidiaries will utilize the proceeds of any sale of
any of real or personal property for any of: (i) additional capital
expenditures, (ii) payment of any debt which is senior to the debt
under this Note, or (iii) the payment of debt arising under this Note;
4.9 Payor and its subsidiaries will not issue any form of equity or other
security (other than debt) in a public or private placement capital
raise without Payee's consent;
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4.10 Payor and its subsidiaries will at all times maintain, preserve,
protect and keep each of their property used or useful in the conduct
of business in good repair, working order and condition (except for
the effects of reasonable wear and tear in the ordinary course of
business) and will from time to time, make all necessary and proper
repairs, renewals, replacements, betterments and improvements thereto;
4.11 Payor and its subsidiaries will keep adequately insured, by
financially sound reputable insurers, all property of a character
usually insured by similar corporations and carry such other insurance
as is usually carried by similar corporations;
4.12 Payor will, promptly following the occurrence of an Event of Default
or of any condition or event which, with the giving of notice or the
lapse of time or both, would constitute an Event of Default, furnish a
statement of Payor's Chief Executive Officer or Chief Financial
Officer to Payee setting forth the details of such Event of Default or
condition or event and the action which Payor intends to take with
respect thereto; and
4.13 Payor will, and will cause each of its subsidiaries to, at all times
maintain books of account in which all of its financial transactions
are duly recorded in conformance with generally accepted accounting
principles.
5. EVENTS OF DEFAULT. The following events each constitute an "Event of
Default":
5.1 The dissolution of Payor or any vote in favor thereof by the board of
directors and shareholders of Payor; or
5.2 Payor makes an assignment for the benefit of creditors, or files with
a court of competent jurisdiction an application for appointment of a
receiver or similar official with respect to it or any substantial
part of its assets, or Payor files a petition seeking relief under any
provision of the Federal Bankruptcy Code or any other federal or state
statute now or hereafter in effect affording relief to debtors, or any
such application or petition is filed against Payor, which application
or petition is not dismissed or withdrawn within sixty (60) days from
the date of its filing; or
5.3 Payor fails to pay the principal amount, or interest on, or any other
amount payable under this Note within five (5) days of when the same
becomes due and payable; or
5.4 Payor admits in writing its inability to pay its debts as they mature;
or
5.5 Payor sells all or substantially all of its assets or merges or is
consolidated with or into another corporation other than a transaction
whose primary purpose is to re-domicile the Payor ; or
5.6 A proceeding is commenced to foreclose a security interest or lien in
any 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
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assets) of Payor or of any subsidiary of Payor; or
5.7 A final judgment for the payment of money in excess of $350,000 is
entered against Payor by a court of competent jurisdiction, and such
judgment is not discharged (nor the discharge thereof duly provided
for) in accordance with its terms, nor a stay of execution thereof
procured, within sixty (60) days after the date such judgment is
entered, and, within such period (or such longer period during which
execution of such judgment is effectively stayed), an appeal therefrom
has not been prosecuted and the execution thereof caused to be stayed
during such appeal; or
5.8 An attachment or garnishment is levied against the assets or
properties of Payor or any subsidiary of Payor involving an amount in
excess of $350,000 and such levy is not vacated, bonded or otherwise
terminated within sixty (60) days after the date of its effectiveness;
or
5.9 Payor or any subsidiary defaults in the due observance or performance
of any covenant, condition or agreement to be observed or performed
pursuant to the terms of this Note (other than the default specified
in Section 5.3 above) and such default continues uncured for a period
of thirty (30) days from the date Payor receives written notice from
the Payee; or
Upon the occurrence of any such Event of Default and at any time
thereafter, the holder of this Note shall have the right (at such holder's
option) to declare the principal of, accrued unpaid interest on, and all
other amounts payable under this Note to be forthwith due and payable,
whereupon all such amounts shall be immediately due and payable to the
holder of this Note, without presentment, demand, protest or other notice
of any kind, all of which are hereby expressly waived; provided.
6. SUITS FOR ENFORCEMENT AND REMEDIES.
6.1 If any one or more Events of Default shall occur and be continuing,
the Payee may proceed to (1) protect and enforce Payee's rights either
by suit in equity or by action at law, or both, whether for the
specific performance of any covenant, condition or agreement contained
in this Note or in any agreement or document referred to herein or in
aid of the exercise of any power granted in this Note or in any
agreement or document referred to herein, (ii) enforce the payment of
this Note, or (iii) enforce any other legal or equitable right of the
holder of this Note. No right or remedy herein or in any other
agreement or instrument conferred upon the holder of this Note is
intended to be exclusive of any other right or remedy, and each and
every such right or remedy
shall be cumulative and shall be in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in
equity or by statute or otherwise.
7. UNCONDITIONAL OBLIGATION; FEES, WAIVERS, OTHER.
7.1 The obligation to make the payments provided for in this Note are
absolute and
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unconditional and are not subject to any defense, set-off,
counterclaim, rescission, recoupment or adjustment whatsoever.
7.2 If, following the occurrence of an Event of Default, Payee shall seek
to enforce the collection of any amount of principal of and/or
interest on this Note, there shall be immediately due and payable from
Payor, in addition to the then unpaid principal of, and accrued unpaid
interest on, this Note, all reasonable costs and expenses incurred by
Payee in connection therewith, including, without limitation,
reasonable attorneys' fees and disbursements.
7.3 No forbearance, indulgence, delay or failure to exercise any right or
remedy with respect to this Note shall operate as a waiver or as an
acquiescence in any default, nor shall any single or partial exercise
of any right or remedy preclude any other or further exercise thereof
or the exercise of any other right or remedy.
7.4 This Note may not be modified or discharged (other than by payment)
except by a writing duly executed by Payor and Payee.
7.5 Payor hereby expressly waives demand and presentment for payment,
notice of nonpayment, notice of dishonor, protest, notice of protest,
bringing of suit, and diligence in taking any action to collect
amounts called for hereunder, and shall be directly and primarily
liable for the payment of all sums owing and to be owing hereon,
regardless of and without any notice, diligence, act or omission with
respect to the collection of any amount called for hereunder or in
connection with any right, lien, interest or property at any and all
times which Payee had or is existing as security for any amount called
for hereunder.
8. Intentionally Deleted.
9. Intentionally Deleted.
10. Intentionally Deleted.
11. MISCELLANEOUS.
11.1 The headings of the various paragraphs of this Note are for
convenience of reference only and shall in no way modify any of the
terms or provisions of this Note.
11.2 All notices required or permitted to be given hereunder shall be in
writing and shall be deemed to have been duly given when personally
delivered or sent by registered or certified mail (return receipt
requested, postage prepaid), facsimile transmission or overnight
courier to the address of the intended recipient as set forth in the
preamble to this Note or at such other address as the intended
recipient shall have hereafter given to the other party hereto
pursuant to the provisions of this Note.
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.
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11.4 This Note shall bind Payor and its successors and assigns.
ARCADIA RESOURCES, INC.
By: /s/ John E. Elliott, II
------------------------------------
John E. Elliott, II
Its: Chief Executive Officer
Accepted and Agreed to:
JANA MASTER FUND, LTD.
BY: ITS INVESTMENT ADVISOR, JANA
PARTNERS LLC
By: /s/ Marc Lehmann
---------------------------------
Marc Lehmann
Its: Partner
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