Document:

EX-10.5

Exhibit
10.5

ASSIGNMENT AND ASSUMPTION AGREEMENT 

     Assignment and Assumption Agreement (as the same may be amended, supplemented or otherwise
modified from time to time, this “Assignment and Assumption Agreement”), dated as of March 25, 2009
(the “Effective Date”), by and between Arcadia Products, Inc., a Delaware corporation, Arcadia Home
Health Products, Inc., a Delaware corporation, O2 Plus, a California corporation, Lovell Medical
Supply, Inc., a North Carolina corporation, Arcadia Home Mideast, Inc., a Delaware corporation,
Beacon Respiratory Services of Alabama, Inc., a Delaware corporation, Beacon Respiratory Services
of Georgia, Inc., a Delaware corporation, American Oxygen and Medical Equipment, Inc., an Illinois
corporation, Arcadia Home Oxygen and Medical Equipment, Inc., a Michigan corporation, and Trinity
Healthcare of Winston-Salem, Inc., a Georgia corporation (each, an “Assignor” and collectively, the
“Assignors”), Arcadia Resources, Inc., a Nevada corporation (“Assignee”), JANA Master Fund, Ltd.
(“JANA”), Vicis Capital Master Fund (“Vicis”) and LSP Partners, LP (“LSP”). JANA, Vicis and LSP
are referred to herein sometimes individually as a “Secured Party” and collectively as “Secured
Parties.”

RECITALS

     A. This is the Assignment and Assumption Agreement referred to in that certain Master Exchange
Agreement dated the Effective Date between Assignee, JANA, LSP and Vicis (the “Master Exchange
Agreement”).

     B. Assignors and JANA are parties to that certain Revolving Line of Credit and Security
Agreement dated March 31, 2008 (“Revolving Line Agreement”). Capitalized terms used in this
Assignment and Assumption Agreement and not otherwise defined shall have the same meanings herein
as are ascribed to them in the Revolving Line Agreement. Pursuant to the Revolving Line Agreement,
the Assignors executed and delivered to JANA that certain Promissory Note dated March 31, 2008, in
the original principal amount of $5,000,000 (the “Subsidiaries Note”), which, as of the Effective
Date, had an unpaid balance of $5,510,210, comprised of principal in the amount of $5,000,000 and
accrued, unpaid interest in the amount of $510,210. Also pursuant to the Revolving Line Agreement,
and to secure the indebtedness evidenced by the Subsidiaries Note and the Assignors’ obligations
under the Revolving Line Agreement, the Assignors granted to JANA a security interest in the
Collateral.

     C. Pursuant to the this Assignment and Assumption Agreement, the Master Exchange Agreement and
the transactions contemplated thereby, on the Effective Date: (i) the Assignors shall assign to
Assignee, and Assignee shall assume and agree to discharge, pay and perform in full, all of the
Assignors’ obligations under and the indebtedness evidenced by the Subsidiaries Note; (ii) Assignee
shall execute and deliver to JANA a Promissory Note, dated the Effective Date, in the original
principal amount of $18,035,367 (“New JANA Note”), which New JANA Note shall evidence certain
indebtedness owed by Assignee to JANA, including, without limitation, the indebtedness evidenced by
the Subsidiaries Note assigned hereby; (iii) Assignee shall execute and deliver to Vicis a
Promissory Note, dated the Effective Date, in the original principal amount of $7,882,407 (the
“Vicis Note”); (iv) Assignee shall execute and deliver to LSP a Promissory Note, dated the
Effective Date, in the original principal amount of $1,000,000 (the “LSP Note”); and (v) JANA shall
consent to the assignment and assumption contemplated hereby.

 

 

     NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:

     1. Assignment. Subject to the terms and conditions set forth herein, the Assignors hereby
sell and assign to the Assignee, jointly and severally, BUT WITH FULL RECOURSE, and the Assignee
hereby assumes and agrees to discharge, pay and perform in full, on and from and after the
Effective Date, all of the Assignors’ obligations under and the indebtedness evidenced by the
Subsidiaries Note.

     2. Representations and Warranties. The Assignee and each Assignor represents and warrants to
the other that: (i) it has full power and legal right to execute and deliver this Assignment and
Assumption Agreement and to perform the provisions of this Assignment and Assumption Agreement;
(ii) the execution, delivery and performance of this Assignment and Assumption Agreement have been
authorized by all action, corporate or otherwise, and do not violate any provisions of its
organizational documents or any contractual obligations or requirement of law binding on it; and
(iii) this Assignment and Assumption Agreement constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms. Each Assignor further represents that (a) it
is the legal obligor of the obligations being assigned by it hereunder, (b) the assignment does not
violate any restrictions on transfer, and (c) the assignment is otherwise effective and rightful.

     3. Consent to Assignment and Assumption/Assignors Not Released. JANA hereby: (i) consents to
the assignment by the Assignors, jointly and severally WITH FULL RECOURSE, to the Assignee, on the
Effective Date, of all of the Assignors’ obligations under and the indebtedness evidenced by the
Subsidiaries Note; and (ii) consents to the assumption by the Assignee and the Assignee’s agreement
to discharge, pay and perform in full, on and from and after the Effective Date, all of the
Assignors’ obligations under and the indebtedness evidenced by the Subsidiaries Note. The
Assignors and the Assignee acknowledge and agree that JANA’s consent described herein does not and
shall not be deemed to constitute a release of the Assignors or any of them from or with respect to
any of the obligations under the Revolving Credit Line Agreement or the indebtedness evidenced by
the Subsidiaries Note and, to the extent that the Assignee fails to discharge, pay and perform in
full and when due any of the obligations under the Revolving Credit Line Agreement or any of the
indebtedness evidenced by the Subsidiaries Note (collectively, the “Assumed Obligations”), JANA
shall have full recourse against the Assignors for such indebtedness. The parties acknowledge and
agree that from and after the Effective Date there shall be no additional advances under the
Revolving Credit Line or Subsidiaries Note.

     4. Grant of Security Interest/Commitment to Release Security Interest.

          (a) The Assignors, jointly and severally, and the Assignee, hereby PLEDGE, ASSIGN and GRANT a
security interest in all of the Assignors’, individually and collectively, and Assignee’s, right,
title and interest in and to the Collateral: (i) to JANA, to secure the prompt and complete
payment and performance of the New JANA Note; (ii) to Vicis, to secure the prompt and complete
payment and performance of the Vicis Note; and (iii) to LSP, to secure the prompt and complete
payment and performance of the LSP Note. Any and all proceeds of any Collateral received by any
Secured Party shall be applied to the indebtedness owed by the Assignee to each of the Secured
Parties on a pro rata basis (based on the then outstanding

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amount of unpaid principal and accrued unpaid interest evidenced by the New JANA Note, the
Vicis Note and the LSP Note).

          (b) Each of the New JANA Note, Vicis Note and LSP Note (each, a “Note”) expressly contemplates
that from and after the Effective Date the Assignee will complete Business Line Sales (as such term
is defined in each Note) and other sales of assets of the Assignors outside of the ordinary course
of business. Each Secured Party agrees that so long as the Net Proceeds (as such term is defined
in each Note) paid to or received by the Assignee in connection with any Business Line Sale or
other sale of assets outside of the ordinary course of business are applied strictly in accordance
with Section 8 of each Note, it will release its security interests and liens in and to so much of
the Collateral as is included in such Business Line Sale or other sale of assets outside of the
ordinary course of business (the “Released Collateral”), and cause any effective Uniform Commercial
Code financing statements to be partially terminated and take any other actions necessary to
release or terminate any interest it may have with respect to any of the Released Collateral.
Excepting only Released Collateral, the security interests in the remaining Collateral will remain
in full force and effect.

     5. Obligations Absolute. The obligations of each Assignor hereunder (including, without
limitation, with respect to the indebtedness evidenced by the Subsidiaries Note) are independent of
the Assumed Obligations, and a separate action or actions may be brought and prosecuted against any
Assignor to enforce such obligations, irrespective of whether any action is brought against Arcadia
or any other Assignor (each, a “Transaction Party”) or whether any such party is joined in any such
action or actions. The liability of each Assignor hereunder shall be irrevocable, absolute and
unconditional irrespective of, and each Assignor hereby irrevocably waives any defenses it may now
or hereafter have in any way relating to, any or all of the following: (a) any lack of validity or
enforceability of the New Jana Note, the Vicis Note, or the LSP Note or any other agreement
executed in connection therewith or any agreement or instrument relating thereto (each of the
foregoing, a “Transaction Document”); (b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Assumed Obligations, or any other amendment or waiver of or
any consent to departure from any Transaction Document, including, without limitation, any increase
in the Assumed Obligations resulting from the extension of additional credit to any Transaction
Party or otherwise; (c) any taking, exchange, release or non-perfection of any Collateral, or any
taking, release or amendment or waiver of or consent to departure from any other guaranty, for all
or any of the Assumed Obligations; (d) any change, restructuring or termination of the corporate,
limited liability company or partnership structure or existence of any Transaction Party; or (e)
any other circumstance (including any statute of limitations) or any existence of or reliance on
any representation by Jana, Vicis or LSP that might otherwise constitute a defense available to, or
a discharge of, any Transaction Party or any other guarantor or surety. This Agreement shall
continue to be effective or be reinstated, as the case may be, if at any time any payment of any of
the Assumed Obligations is rescinded or must otherwise be returned by Jana, Vicis, LSP or any other
Person upon the insolvency, bankruptcy or reorganization of Arcadia or any Assignor or otherwise,
all as though such payment had not been made.

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     6. Miscellaneous.

          (a) Section headings have been inserted herein for convenience only and shall not be construed
to be a part hereof.

          (b) This Assignment and Assumption Agreement may be executed in any number of separate
counterparts, including counterparts by facsimile and all of said counterparts taken together shall
be deemed to constitute one and the same agreement. It shall not be necessary in making proof of
this Assignment and Assumption Agreement to produce or account for more than one counterpart signed
by the party to be charged.

          (c) Every provision of this Assignment and Assumption Agreement is intended to be severable,
and if any term or provision hereof shall be invalid, illegal or unenforceable for any reason, the
validity, legality and enforceability of the remaining provisions hereof shall not be affected or
impaired thereby, and any invalidity, illegality or unenforceability in any jurisdiction shall not
affect the validity, legality or enforceability of any such term or provision in any other
jurisdiction.

          (d) This Assignment and Assumption Agreement shall be binding upon and inure to the benefit of
JANA, LSP, Vicis, the Assignors and the Assignee.

          (e) THIS ASSIGNMENT AND ASSUMPTION AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAWS
OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES) AND DECISIONS OF THE STATE
OF NEW YORK.

          (f) This Assignment and Assumption Agreement shall become effective on the Effective Date.

[Signature page follows]

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     IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Assumption Agreement to
be duly executed and delivered by their proper and duly authorized officers as of the day and year
first above written.

	 	 	 	 	 	 	 	 	 	 
	JANA	 	ASSIGNORS:	 
	 
	 	 	 	 	 	 	 	 	 
	JANA MASTER FUND, LTD.	 	ARCADIA HOME HEALTH PRODUCTS, INC.	 
	 
	 	 	 	 	 	 	 	 	 
	By: Its Investment Advisor, JANA
Partners LLC	 	By:	 	/s/ Marvin R. Richardson	 
	 
	 	 	 	 	 	 	 	Marvin Richardson, President	 
	By:	 	/s/ Marc Lehmann	 	 	 	 	 
	 	 	Marc Lehmann, Partner	 	AMERICAN OXYGEN AND MEDICAL EQUIPMENT, INC.	 
	 
	 	 	 	 	 	 	 	 	 
	VICIS CAPITAL MASTER FUND	 	By:	 	/s/ Marvin R. Richardson	 
	 

	 	 	 	 	 	 	 	Marvin Richardson, President	 
	By:	 	/s/ Keith W. Hughes	 	 	 	 	 
	 	 	Printed:	 	Keith W. Hughes	 	BEACON RESPIRATORY SERVICES OF GEORGIA, INC.	 
	 

	 	Title:
	 	Chief Financial Officer	 	 	 	 	 
	 	 	By:	 	/s/ Marvin R. Richardson	 
	LSP PARTNERS, LP	 	 	 	Marvin Richardson, President	 
	 
	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Aaron Lehmann, General Partner	 	BEACON RESPIRATORY SERVICES OF ALABAMA, INC.	 
	 	 	Printed:	 	Aaron Lehmann	 	 	 	 	 
	 

	 	Title:
	 	Partner	 	By:	 	/s/ Marvin R. Richardson	 
	 	 	 	 	 	 	 	 	Marvin Richardson, President	 
	ASSIGNEE:	 	 	 	 	 
	 
	 	 	 	 	 	LOVELL MEDICAL SUPPLY, INC.	 
	ARCADIA RESOURCES, INC.	 	 	 	 	 
	 
	 	 	 	 	 	By:
	 	/s/ Marvin R. Richardson	 
	By:	 	/s/ Marvin R. Richardson	 	 	 	Marvin Richardson, President	 
	 
	 	Marvin Richardson, President	 	 	 	 	 
	 	 	TRINITY HEALTHCARE OF WINSTON-SALEM, INC.	 
	ASSIGNORS:	 	 	 
	 	 	By:	 	/s/ Marvin R. Richardson	 
	ARCADIA PRODUCTS, INC.	 	 	 	Marvin Richardson, President	 
	 	 	 	 	 	 
	By:	 	/s/ Marvin R. Richardson	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	Marvin Richardson, President	 	 	 	 	 
	 	 	 	 	 	 
	O2 PLUS	 	 	 	 	 
	 	 	 	 	 	 
	By:	 	/s/ Marvin R. Richardson	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	Marvin Richardson, President	 	 	 	 	 
	 	 	 	 	 	 

 

 

	 	 	 	 	 	 	 	 	 
	ARCADIA HOME MIDEAST, INC.	 	 	 	 
	 	 	 	 	 
	By:	 	/s/ Marvin R. Richardson	 	 	 	 
	 	 	 	 	 	 	 
	 	 	Marvin Richardson, President	 	 	 	 
	 	 	 	 	 
	ARCADIA HOME OXYGEN AND MEDICAL
EQUIPMENT, INC.	 	 	 	 
	 	 	 	 	 
	By:	 	/s/ Marvin R. Richardson	 	 	 	 
	 	 	 	 	 	 	 
	 	 	Marvin Richardson, PresidentEX-10.9

AMENDMENT #1 TO THE

ROBERT FARR

EXECUTIVE EMPLOYMENT AGREEMENT

          THIS AMENDMENT (this “Amendment”), is made and entered into as of December 29, 2008 by and
between BANK OF BIRMINGHAM., a Michigan state bank (the “Bank”) and ROBERT FARR, (the “Executive”).

          WHEREAS, the Executive serves as President and Chief Executive Officer of the Bank, a
subsidiary of Birmingham Bloomfield Bancshares, Inc., (the “Company”); and

          WHEREAS, the Bank and the Executive have previously entered into an Executive Employment
Agreement dated June 28, 2007 (the “Agreement”) and wish to amend the Agreement to satisfy the
requirements of Section 409A of the Internal Revenue Code; and

          WHEREAS, except as otherwise provided in this Amendment, the Agreement shall continue in full
force and effect.

          NOW, THEREFORE, in consideration of the premises and of the covenants herein and for other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
Bank and the Executive agree to amend the Agreement as follows:

	1.	 	The following sentence is added to the end of Paragraph 4 of the Agreement:
	 
	 	 	Reimbursement under this Paragraph 4 shall be made in accordance with the Bank’s expense
reimbursement policies, but in no event later than the last day of the calendar year following
the calendar year in which the expenses are incurred. Reimbursement under this Paragraph 4
shall not affect the expenses eligible for reimbursement in any other calendar year and cannot
be liquidated or exchanged for any other benefit.
	 
	2.	 	The second paragraph of Paragraph 31 is amended as follows:

     In the event that Executive is terminated by the Bank within sixty (60) days following
such Change of Control for any reason other than for Good Cause, Executive shall be entitled to
receive as severance the lump sum amount determined pursuant to Paragraph 32 upon written
notice to the Bank, in which case the severance provisions of Paragraph 34 shall not apply.

	3.	 	Paragraph 32 is amended as follows:

     32. In the event that termination of this Agreement is based upon the Change in Control,
the Bank shall pay to the Executive a cash lump sum payment equal to 199% of his Base Amount as
defined in section 280G(b)(3) of the Internal Revenue Code of 1986, as amended (“Code”) within
thirty (30) days of such notice.

 

 

	4.	 	The a third paragraph of Paragraph 32 is amended as follows:

     For purposes of determining the Gross Up, the Executive shall be deemed to pay federal,
state, and local income taxes at the highest marginal rate of taxation in his filing status for
the calendar year in which the payment is to be made based upon the Executive’s domicile on the
date of the event that triggers the Excise Tax. The determination of whether such Excise Tax
is payable and the amount of such Excise Tax shall be based upon the opinion of tax counsel
selected by the Bank, subject to the reasonable approval of the Executive. If such opinion is
not finally accepted by the Internal Revenue Service, then appropriate adjustments shall be
calculated (with additional Gross Up determined based on the principals outlined in the
previous Paragraph, if applicable) by such tax counsel based upon the final amount of Excise
Tax so determined together with any applicable penalties and interest. The final amount shall
be paid, if applicable, within thirty (30) days after such calculations are completed, but in
no event later than March 15 of the year following the event that triggers the Excise Tax.
Such compensation shall be payable in equal disbursements in accordance with the Bank’s
ordinary payroll policies and procedures. The Executive will also continue to receive his
automobile allowance provided by the Bank for a period of twelve (12) months following the date
of termination.

	5.	 	A new subsection (g) is added to Paragraph 33 as follows:

     (g) Notwithstanding the definition of Change of Control set forth above, a Change of
Control shall not have occurred unless the event constitutes a “change in control event” as
such term is defined by Section 409A of the Internal Revenue Code of 1986 ( “Section 409A”) and
the regulations promulgated thereunder.

	6.	 	The following is added to the end Paragraph 34 of the Agreement:
	 
	 	 	In no event shall payments be made under this Paragraph 34, unless the Executive has incurred a
Separation from Service as defined Section 409A and the Final Regulations promulgated
thereunder. In addition, notwithstanding anything contained herein to the contrary, if at the
time of a termination of this Agreement, (i) Executive is a “specified employee” as defined in
Section 409A, and the regulations and guidance thereunder in effect at the time of such
termination, and, (ii) any of the payments or benefits provided hereunder may constitute
“deferred compensation” under Section 409A, then, and only to the extent required by such
provisions, the date of payment of such payments or benefits otherwise provided shall be
delayed until the earlier of six (6) months following the date of termination or Executive’s
death. Any such payment or series of payments to be made due to a Separation from Service
shall commence no earlier than the first day of the seventh month following the Separation from
Service, provided that to the extent permitted by Section 409A of the Code, only payments
scheduled to be paid during the first 6 months after the date of such Separation from Service
shall be delayed and such delayed payments shall be paid in a single sum on the first day of
the seventh month following the date of such Separation from Service.

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	7.	 	A new Paragraph 54 is added to the Agreement as follows:

     54. This Agreement shall at all times be administered, and the provisions of this
Agreement shall be interpreted, consistent with the requirements of Section 409A and the final
regulations thereunder.

          IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above
written.

	 	 	 	 	 	 	 	 	 
	BANK OF BIRMINGHAM	 	 	 	ROBERT FARR	 	 
	 
	 	 	 	 	 	 	 	 
	By:
	 	/s/ Charles T. Pryde	 	 	 	/s/ Robert Farr	 	 
	 

	 	Charles T. Pryde

	 	 
	 	 

	 	 

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