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) JAN