Exhibit 2.1
THIS EQUITY PURCHASE AGREEMENT (this “Agreement”) is made as of August 11, 2025 (“Effective Date”) by and among (i) QHM Holdings, Inc., a Delaware corporation (“Buyer”), (ii) IRB Medical Equipment, LLC, dba Hart Medical Equipment, a Michigan limited liability company (“Company”), and (iii) Hart HoldCo, LLC, a Michigan limited liability company (“Seller”) (altogether the “Parties”). As used herein, the Seller and Company are collectively the “Seller Parties.”
Background
The Company is a limited liability company organized under the laws of the State of Michigan and participating Medicare provider that provides durable medical equipment, points of service products and related services (collectively, the “Business”).
Prior to the Closing, Henry Ford Health, McLaren Health Management Group and Northwest Ohio Medical Equipment, LLC (the “Owners”) Owners contributed 100% of the equity interests of the Company to Seller in exchange for the equity interests of Seller (the “Contribution”).
As of the Closing, the Seller owns beneficially and of record 100% of the issued and outstanding units of membership interests of the Company (collectively, the “Units”).
Agreement
NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants and agreements set forth in this Agreement, and intending to be legally bound, the parties agree as follows:
| 1. | PURCHASE AND SALE OF UNITS; PURCHASE PRICE |
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| 2. | CLOSING |
| 3. | REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER |
As an inducement to Buyer to enter into this Agreement and to consummate the transactions contemplated by this Agreement, the Seller represents, warrants and covenants to Buyer as hereafter set forth in this Article 3, and acknowledges that Buyer is relying upon such
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representations, warranties and covenants contained in this Article 3 as being true and correct as of the Effective Date, provided, that any qualifications and exceptions to such representations, warranties or covenants shall be set forth on a corresponding disclosure schedule attached hereto (each, a “Disclosure Schedule”). The Disclosure Schedules shall be numbered to correspond to the various Sections of this Agreement.
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| 4. | REPRESENTATIONS, WARRANTIES AND COVENANTS OF BUYER |
As an inducement to the Seller Parties to enter into this Agreement and to consummate the transactions contemplated by this Agreement, Buyer represents, warrants and covenants to the Seller Parties as hereafter set forth in this Article 4, and acknowledge that Seller Parties are relying upon such representations, warranties and covenants contained in this Article 4 as being true and correct as of the Effective Date:
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| 5. | TERMINATION |
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| 6. | CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER |
The obligations of Buyer to consummate the transactions contemplated hereby are subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by Buyer in whole or in part); provided, however Buyer may not rely on the failure of any condition set forth in this Article 6, as the case may be, to be satisfied if such failure was caused by Buyer’s failure to comply with its obligations to consummate the transactions contemplated by this Agreement as required by and subject to Section 4.3:
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| 7. | CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER |
The obligations of the Seller Parties to consummate the transactions contemplated hereby are subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by Seller, in whole or in part):
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| 8. | INDEMNIFICATION |
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| 9. | Buyer and Seller Party Covenants. |
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| 10. | GENERAL PROVISIONS |
If to Buyer: | QHM Holdings, Inc. c/o Quipt Home Medical Corp. Wilder, KY 41076 |
With a copy by email to: | fhmehta@myquipt.com |
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With a copy to: | Katz, Teller, Brant & Hild 255 East Fifth Street, Suite 2400 Cincinnati, Ohio 45202 Attn: John R. Gierl, Esq. |
With a copy by email to: | jgierl@katzteller.com |
If to Seller: | McLaren Health Management Group c/o Hart HoldCo, LLC 1515 Cal Drive Davison, MI 48325 Attn: Bart Buxton |
With a copy by email to: | Barton.Buxton@mclaren.org |
With a copy to: | Blanchard Valley Health System c/o Hart HoldCo, LLC 1900 South Main St. Findlay, OH 45840 Attn: Myron D. Lewis |
With a copy by email to: | mlewis@bvhealthsystem.org |
With a copy to: | Henry Ford Health Community Care Services c/o Hart HoldCo, LLC 30100 Telegraph Rd., Suite 200 Bingham Farms, MI 48025 Attn: David F. Shepherd |
With a copy by email to: | dshephe1@hfhs.org |
With a copy to: | Jones Day 150 West Jefferson, Suite 2100 Detroit, MI 48226-4438 Attn: Ann T. Hollenbeck |
With a copy by email to: | ahollenbeck@jonesday.com |
or to such address as such party may indicate by a notice delivered to the other parties. Notice will be deemed received the same day (when delivered personally), five (5) days after mailing (when sent by registered or certified mail) and the next business day (when delivered by overnight courier). Any party to this Agreement may change its address to which all communications and notices may be sent by addressing notices of such change in the manner provided.
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“Agreement” shall mean this Purchase Agreement, including the exhibits and schedules attached hereto, as the same may be amended, supplemented or modified in accordance with the terms hereof.
“Affiliate” means, with respect to any Person, any of (a) a manager, member, director, officer or shareholder of such Person and (b) any other Person that, directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, another Person. The Term “control” includes the possession, directly or indirectly, of the power to direct the management and policies of a Person, whether through the ownership of voting securities, by Contract or otherwise.
“ASSA” shall have the meaning set forth in Section 6.4(f) of this Agreement.
“Business Day” shall mean any day other than a Saturday, Sunday or day on which national banks located in the United States are authorized or obligated to close.
“Business Documents” means all of the Company’s rights in, to and under all supplier agreements and any other agreements with the vendor or manufacturer of any equipment or goods used by such Company in the Business, equipment service agreements, leases of equipment that are related to and used by the Company in the Business and all agreements that are related to the
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Company’s conduct of the Business, except Payor Contracts and any agreements referenced in any other Schedule to this Agreement.
“Code” means the U.S. Internal Revenue Code of 1986, as amended.
“Covered Parties” or “Covered Party” shall have the meaning described in Section 9.1 of this Agreement.
“Customer Contracts” means all of the Company’s rights in, to and under all agreements with the Company’s customers.
“Equipment Indebtedness” means Indebtedness incurred with a specialized leasing company, lender and/or supplier, to finance the acquisition cost of supplies, equipment and other consumables used in the Business, including without limitation, capitalized lease obligations and purchase money security financing, as identified in Schedule 3.8(b), but does not include any accounts receivable obligations in the ordinary course of business.
“Financing Lender” means Buyer’s financing lender, from which Buyer received funds used for the Purchase Price, together with its successors and assigns.
“Fraud” means, with respect to a party, an actual and intentional misrepresentation of a material existing fact with respect to the making of any representation or warranty in Article 3 or Article 4, made by such party, (a) with respect to Seller, to Seller's Knowledge or (b) with respect to Buyer, to Buyer's actual knowledge, of its falsity and made for the purpose of inducing the other party to act, and upon which the other party justifiably relies with resulting losses. For the avoidance of doubt, Fraud shall not include any claim for equitable fraud, constructive fraud, promissory fraud, unfair dealings fraud, fraud by reckless or negligent misrepresentations or any tort based on negligence or recklessness.
“Hazardous Materials” includes hazardous waste, hazardous substances, toxic substances and related materials, including all materials and substances regulated by the Comprehensive Environmental Response, Compensation and Liability Act, the Resource Conservation and Recovery Act, the Hazardous Materials Transportation Act, the Toxic Substances Control Act, the Federal Water Pollution Control Act, the Federal Safe Drinking Water Act, the Federal Air Pollution Control Act, the Oil Pollution Act, the Federal Insecticide, Fungicide and Rodenticide Act, the Atomic Energy Act, Occupational Safety and Health Act, each as amended, and any regulations promulgated thereunder or any other applicable federal, state or local environmental law, statute, rule, regulation or ordinance.
“Indebtedness” shall mean as applied to a Person (“such Person”) means, without duplication, (i)(a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by debentures, promissory notes, bonds (other than performance, surety or customs bonds in the ordinary course of business), loan agreements or other similar instruments and (c) all interest-bearing obligations of such Person to the extent not otherwise covered by clauses (a) and (b); (ii) capitalized lease obligations and any synthetic lease obligations of such Person, (iii) all reimbursement obligations of such Person in connection with letters of credit or letter of credit guaranties issued for the account of such Person; and (iv) all obligations of such
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Person to pay the deferred purchase price of property or services including Purchase Money Indebtedness.
“Key Employees” shall have the meaning described in Section 9.3 of this Agreement.
“Material Adverse Effect” or “Material Adverse Change” means any effect, event, development, circumstance or change that has been, or would reasonably be expected to be, individually or in the aggregate, materially adverse to the business, assets, financial condition, operations, operating results or any other condition of the Company other than any effect or change to the extent resulting from or relating to: (a) general business or economic conditions, (b) national or international political or social conditions, including the engagement by the United States in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon the United States, or any of its territories, possessions, or diplomatic or consular offices or upon any military installation, equipment or personnel of the United States, (c) financial, banking or securities markets (including any disruption thereof and any decline in the price of any security or any market index), (d) changes in Laws, and (e) the announcement or pendency of the Transaction or the identity of the Buyer or the Buyer parent companies, including any impact thereof on relationships, contractual or otherwise, with any customers, suppliers or employees of the Company, except, in the case of clauses (a), (b), (c), and (d), to the extent the Company is disproportionately affected thereby as compared with other participants in the industries in which the Company operates.
“Minimum Cash Amount” means $1,000,000.00.
“Operating Agreement” shall have the meaning set forth in Section 6.4(e) of this Agreement.
“Payor Contract” means a contract with a managed care company or third-party payor for the Company.
“Permitted Liens” means (i) liens for Taxes not yet due and payable or being contested in good faith by appropriate proceedings and for which there are adequate reserves on the books; (ii) workers or unemployment compensation liens arising in the ordinary course of Business that are not yet due and payable or not exceeding an amount of $1,000, in the aggregate; (iii) landlords’, carriers’, mechanic’s, materialman’s, supplier’s, vendor’s or similar liens arising in the ordinary course of Business securing amounts that are not delinquent, not yet due and payable, or not exceeding an amount of $1,000, in the aggregate; and (iv) zoning ordinances, recorded easements and other restrictions of legal record affecting the Real Property Leases or matters which would be revealed by a survey, and that in either case do not, individually or in the aggregate, impair the current use or occupancy of the Real Property Leases or have a Material Adverse Effect on the Company or the Business.
“Person” shall be construed broadly and shall include an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or a Governmental Authority (or any department, agency, or political subdivision thereof).
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“Reconciliation Date” means the date that is one hundred eighty (180) days after the Closing Date.
“Related Documents” means the Operating Agreement, the ASSA, the consents of third party landlords, and all other written agreements, documents and certificates expressly required by this Agreement to be delivered to another Party on the date hereof.
“Restricted Period” means the five (5) year period commencing on the Closing Date.
“Seller’s Knowledge” or “Knowledge of Seller” means and includes the actual knowledge of Allen Hunt (as the Company’s President), Brenda Papp (as the Company’s Vice President of Finance), Brian Boulanger (as the Company’s Vice President of Information Technology), Deborah Holman (as the Company’s Chief Compliance Officer), and Tiffanie Robinson-Steffes (as the Company’s Director of Reimbursement).
“Territory” shall have the meaning defined in the Operating Agreement.
“Working Capital” shall mean, as of any specified date, the amount equal to (a) the sum of the following current assets of the Company: (i) accounts receivable (net of contractual allowance reserves and bad debt reserves), (ii) other receivables, (iii) inventory, and (iv) prepaid expenses (including deposits), less (b) the sum of the following liabilities of the Company: (x) accounts payable (excluding any payables to Affiliates), (y) credit card liabilities, and (z) accrued liabilities.
“Transaction Expenses” shall mean (i) amounts owed to Jones Day for legal services provided, (ii) amounts owed to Braff Group, and (iii) one half (50%) of amounts owed to VMG pursuant to the fair market value analysis performed in connection with the Transaction.
“Working Capital Deficit” shall mean the amount by which Working Capital is less than the Working Capital Target.
“Working Capital Surplus” shall mean the amount by which Working Capital is more than the Working Capital Target.
“Working Capital Target” shall mean $1,100,000.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on as of the date first written above.
Buyer: | QHM HOLDINGS, INC. By: /s/ Hardik Mehta Hardik Mehta, Chief Financial Officer |
Company: | IRB MEDICAL EQUIPMENT, LLC dba Hart Medical Equipment By: /s/ M. Allen Hunt M. Allen Hunt, President |
Seller: | HART HOLDCO, LLC By: /s/ Designated Representative [TBD], Designated Representative |
[Signature Page – Equity Purchase Agreement]
EXHIBIT A
Operating Agreement
See attached.
EXHIBIT B
Administrative Support Services Agreement
See attached.
EXHIBIT C
Illustrative Working Capital Calculation
See attached.