capture.jpg [capture.jpg]

Exhibit 10.2

August 15, 2017

Veterans Accountable Care Group, LLC
5665 North Scottsdale Road, Suite 110
Scottsdale, Arizona 85250
Attn: Mr. David R. Nelson, President and Chief Executive Officer
Re:
Commitment Letter

Dear Mr. Nelson:
Veterans Accountable Care Group, LLC, an Arizona limited liability company
(“VACG” or “you”), has advised OPKO Health, Inc. (“OPKO”, “we,” or “us”) that
Veterans Accountable Care Organization, LLC (“VACO”) has submitted to the
Veterans Health Administration (“VHA”) a proposal (the “Proposal”) for VACO to
be awarded (the “Award”) a Prime Contract (the “Contract”) under the VHA’s
Community Care Network Initiative described in the VHA’s December 28, 2016
Request for Proposals regarding the Community Care Network (“CCN”), VA
791-16-R-0086 (the “RFP”). All references to “dollars” or “$” in this letter are
references to United States dollars.
You have advised us that it is a condition precedent to the Award that VACO
satisfies a financial stability requirement under the RFP (the “Financial
Requirement”). VACO intends to use the cash proceeds of a $50,000,000 capital
contribution from VACG to VACO to satisfy the Financial Requirement.
1.    Commitment.
(a)    Subject to the provisions of paragraph 11(a) below, OPKO is pleased to
advise VACG of its commitment to provide (through one or more of its
affiliates), or to arrange from a third party lender or such other person
approved by VACG (such consent not to be unreasonably withheld or conditioned),
a line of credit for VACG in the amount of $50,000,000 (the “Facility”) in
accordance with the terms and conditions set forth in this letter (or as
otherwise agreed to by VACG and the lender under the Facility (the “Lender”)).
Under the terms of the Facility, VACG shall not be permitted to draw down on the
Facility until the date (the “Award Date”) on which the VHA awards a CCN
contract to VACO (the “CCN Contract”). The Facility shall mature five (5) years
following the Award Date (the “Maturity Date”). During the term of the Facility,
VACG shall only be required to pay interest on the Facility, with the
outstanding principal and all accrued and unpaid interest to be repaid in full
on the Maturity Date. Interest will be payable on the unpaid principal amount
under the Facility at a rate equal to six and one-half percent (6.5%) per annum,
payable quarterly in arrears. The default interest rate under the Facility shall
be 18% per annum commencing upon an event of default as defined in the
definitive loan documentation for the Facility

OPKO Health, Inc. | 4400 Biscayne Boulevard, Miami, FL 33137 | fax 305.575.4140
| www.opko.com

--------------------------------------------------------------------------------

Veterans Accountable Care Group, LLC
August 15, 2017
Page 2

(the “Definitive Agreements”), which shall be due and payable on demand by
Lender. The Definitive Agreements shall be customary for transactions of the
type described in this letter, shall incorporate the terms and conditions set
forth in this letter (or as otherwise agreed to by VACG and Lender) and shall be
executed and delivered by VACG and Lender on or prior to the Award Date. The
parties hereby agree that, except as provided elsewhere herein, no fees shall be
payable by VACG or VACO to OPKO hereunder in respect of the Facility or any
borrowings by VACG thereunder, or based on VACO being awarded a CCN Contract by
the VHA; provided that, if OPKO or one or more of its affiliates is the Lender,
then OPKO shall be entitled to the interest on the Facility as provided herein
and customary fees and expenses under the Facility as set forth in the
Definitive Agreements. OPKO hereby acknowledges and agrees that due to
applicable legal and regulatory requirements, VACO’s accounts receivable under
any CCN Contract may not be assigned to Lender or used as collateral or security
for the Facility. The Definitive Agreements shall provide that in the event of
any uncured material default by VACG under the Facility, Lender shall be
authorized to sweep from VACO’s bank account funds sufficient to cure such
default; provided, that upon any acceleration of the Facility upon an event of
default (after giving effect to any applicable notice, grace or cure periods as
provided in the Definitive Agreements), Lender shall be authorized to sweep the
account to cure such default; provided further, that, to the extent prohibited
by applicable law, regulation or directive or the CCN Contract, Lender shall not
be permitted to sweep any funds deposited in the accounts in respect of VACO
accounts receivable for clinical services payable to VACO under its CCN
Contract. The Facility shall also be secured by a pledge of each of David R.
Nelson’s and SSB Solutions, Inc.’s respective ownership interests in VACG;
provided, that Lender shall only be permitted to exercise its remedies with
respect to such pledges in the event of an event of default under the Facility
that cannot be cured by Lender exercising the above-mentioned sweep of VACO’s
bank account.
(b)    If following final resolution of any and all CCN bid protests (i) the VHA
awards a CCN Contract to VACO and (ii) VACG and the Lender have entered into and
closed the Definitive Agreements for the Facility, OPKO shall receive a
membership interest totaling 15% of the outstanding membership interests in VACO
in the aggregate (the “Membership Interest”), by virtue of an assignment and
transfer of the membership interests held by VACG in VACO.
2.    Use of Proceeds. Subject to the provisions of paragraph 11(a) below, the
funds drawn under the Facility shall be contributed by VACG to VACO to satisfy
the Financial Requirement.
3.    Definitive Agreements between Lender and VACG. In connection with the
Facility, OPKO and VACG will negotiate with Lender and VACG and Lender will
execute Definitive Agreements, which shall include terms and conditions
consistent with those set forth in this letter and other terms and conditions
customary for transactions of such type and otherwise acceptable to VACG and
Lender. The rights of OPKO as a member of VACO, and in relation to the
Membership Interest it will obtain as stated above, will be as set forth in
VACO’s Amended and Restated Operating Agreement, which shall be in form and
substance reasonably acceptable to OPKO.

MIA 185961412v9

--------------------------------------------------------------------------------

Veterans Accountable Care Group, LLC
August 15, 2017
Page 3

4.    Information. You hereby represent, warrant and covenant that: (a) all
written information (other than the Projections (as defined below), other
forward-looking information and information of a general economic or industry
specific nature) that has been or will be made available to us by you or your
representatives, or on your or their behalf, in connection with the Facility
(the “Information”) is and will be complete and correct when taken as a whole,
in all material respects, and does not and will not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements contained therein, in the light of the circumstances under which such
statements are made, not misleading, and (b) all financial projections
concerning VACO and VACG that have been or are hereafter made available to us by
you or any of your representatives, or on your or their behalf (the
“Projections”) in connection with the Facility have been or will be prepared in
good faith based upon assumptions believed by you to be reasonable at the time
furnished (it being understood that projections are inherently uncertain and no
assurance can be given that the Projections will be realized). You agree that
if, at any time prior to the Award Date, you become aware that any of the
representations in the preceding sentence would be incorrect in any material
respect if the Information and Projections were being furnished, and such
representations were being made, at such time, then you will promptly supplement
the Information and Projections so that such representations are corrected in
accordance with this paragraph at such time. You agree that, in issuing the
commitment hereunder, OPKO will be entitled to rely and use the Information and
Projections without independent verification thereof. In addition, you agree to
promptly advise OPKO of any developments materially affecting VACO, VACG or the
Facility prior to the Award Date.
5.    Costs and Expenses. You hereby agree to pay or reimburse OPKO for all
reasonable and documented out-of-pocket expenses (including due diligence
expenses, consultant’s fees and expenses and the reasonable fees, charges and
disbursements of counsel) incurred by OPKO on or after June 26, 2017 in
connection with the preparation, review, negotiation, execution, and delivery of
this letter and the Definitive Agreements, whether or not any such agreements
are executed by the parties, and whether or not the Award Date occurs. VACG’s
obligations hereunder are in addition to any obligations to reimburse Lender for
any costs and expenses in connection with the Facility, which obligations shall
be covered by the Definitive Agreements or any other agreement between VACG and
Lender.
6.    Indemnity. You hereby agree to indemnify and hold harmless OPKO, its
affiliates and their respective directors, officers, employees, advisors, agents
and representatives (each an “Indemnified Person”) from and against any and all
losses, costs, expenses, damages and liabilities of any kind or nature
whatsoever which may be incurred by any such Indemnified Person as a result of
or arising out of any actions, suits, investigations, inquiries, or proceedings
in connection with this letter, the Facility or the use of proceeds thereof, or
any Definitive Agreement (any of the foregoing, for purposes of this paragraph,
a “Proceeding”); provided, however, that no Indemnified Person will be
indemnified for any such loss, cost, expense, damages or liability: (a) to the
extent determined by a final non-appealable judgment of a court of competent
jurisdiction to have resulted from (i) the gross negligence, bad faith, or
willful misconduct by such Indemnified Person, or (ii) any settlement entered
into by any Indemnified Person without VACG’s consent (such consent not

MIA 185961412v9

--------------------------------------------------------------------------------

Veterans Accountable Care Group, LLC
August 15, 2017
Page 4

to be unreasonably withheld, conditioned or delayed); or (b) arising out of or
in connection with any claim, litigation, investigation or proceeding that is
brought by an Indemnified Person against another Indemnified Person and not
involving any act or omission by VACG, its subsidiaries or its affiliates. You
further agree that no Indemnified Person shall have any liability (whether
indirect, in contract, tort, equity or otherwise) to you or your subsidiaries or
affiliates or to your or their respective equity holders or creditors arising
out of, related to or in connection with this letter or the Facility, except to
the extent of direct (as opposed to special, indirect, consequential or
punitive) damages determined in a final non-appealable judgment by a court of
competent jurisdiction to have resulted from Indemnified Person’s gross
negligence, bad faith, or willful misconduct.
7.    Confidentiality. This letter is delivered to you upon your agreement that
this letter (including the existence and contents thereof) shall not be
disclosed by you or your affiliates to any other person, directly or indirectly,
except (a) to your officers, directors, employees, affiliates, attorneys, agents
and accountants and actual or prospective investors and lenders on a
confidential and need-to-know basis solely in connection with such transactions
(assuming such persons are informed by you of the confidential nature of this
letter and agrees to maintain this letter in confidence), (b) as required by law
or any governmental authority and in any judicial, legal or administrative
proceeding (in which case yon agree, to the extent permitted by law, to inform
us promptly), (c) to the extent required, to VHA or otherwise in connection with
the RFP, the Proposal and/or the Award to VACO, if at all, and (d) in connection
with the exercise of remedies or enforcement of rights hereunder. This letter
and the terms of the Facility may be disclosed (w) in connection with any public
filing requirements, (x) to prospective and actual investors and lenders in
connection with the Facility, and (y) as may be required by the rules and
regulations of the U.S. Securities and Exchange Commission (“SEC”) in connection
with any filings made with the SEC in connection with the Facility. If such
disclosure is made by you pursuant to the exceptions above, you agree to notify
us as promptly as practicable of such disclosure to the extent such disclosure
to us is permitted by applicable law.
OPKO agrees to maintain the confidentiality of all non-public information
received by it in connection with the transactions described in this letter and
to use such information solely for purposes related to such transactions except
that such information may be disclosed: (a) to the employees, attorneys,
auditors and other agents of OPKO on a “need to know” basis solely in connection
with such transactions (assuming such persons are informed by OPKO of the
confidential nature of such information and agree to maintain such information
in confidence), (b) to OPKO’s affiliates and its affiliates’ respective
managers, administrators, directors, members, officers, employees, agents,
advisors, and other representatives on a “need to know” basis solely in
connection with the transactions described in this letter (assuming such
affiliates are informed by OPKO of the confidential nature of such information
and agree to maintain such information in confidence), (c) in connection with
OPKO’s obligation to arrange the Facility in accordance with this letter,
including without limitation, to any prospective lender, (d) as required by any
governmental authority, regulatory authority and self-regulatory authority, (e)
in connection with the exercise of remedies or enforcement of rights hereunder
or in connection with the transactions described in this letter or any action or
proceeding related to such transactions, (f) to the extent such information
becomes

MIA 185961412v9

--------------------------------------------------------------------------------

Veterans Accountable Care Group, LLC
August 15, 2017
Page 5

publicly available (other than as a result of a breach of the confidentiality
provisions contained in this letter) or OPKO learns of such information from a
source other than you, and (g) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process. If such disclosure is
made pursuant to the exceptions above, OPKO agrees to notify VACG as promptly as
practical of such disclosure to the extent such disclosure to VACG is permitted
by applicable law.
Any person required to maintain the confidentiality of information as provided
in this paragraph 7 shall be considered to have complied with its obligation to
do so if such person has exercised the same degree of care to maintain the
confidentiality of such information as such person would accord to its own
confidential information.
Notwithstanding anything herein to the contrary, you may disclose the tax
treatment and structure of the Facility and tax opinions, analyses and related
documents to other persons provided that such disclosure shall be subject to the
confidentiality provisions hereof.
8.    No Fiduciary Relationship. You understand that nothing herein or in any
related document creates a fiduciary, advisory or agency relationship or duty
between us and VACG or VACO or any of their respective subsidiaries,
stockholders, creditors, affiliates or any other person and we and you hereby
disclaim any fiduciary responsibility in connection with this letter or the
transactions described herein and the discussions leading thereto. It is hereby
understood and agreed that no party to this letter intends that a fiduciary
relationship be created by this letter or any related documents. Any
discussions, views or opinions on the subject are exactly that and shall not be
construed as advice or recommendations. If advice or recommendations are desired
by any party hereto, such party shall contact a legal or financial of such
party’s choosing. Each party hereto, on behalf of itself and its subsidiaries,
hereby waives and releases, to the fullest extent permitted by law, any claims
that such party or any of its subsidiaries may have against the other party
hereto with respect to any breach or alleged breach of any fiduciary or similar
duty in connection with the transactions described in this letter or in
connection with any matters leading up to the execution of this letter or
definitive agreements relating to the Facility.
Each party hereto acknowledges and understands that the transactions described
herein are arm’s length transactions and is responsible for creating its own
independent judgment with respect to the transactions described in this letter
and the process leading thereto. Each party further acknowledges and agrees that
the other party hereto is not providing any advice as to any legal, tax,
investment, accounting or regulatory matters in any jurisdiction. Each party
hereto shall consult with its own advisors concerning such matters and shall be
responsible for making its own independent investigation and appraisal of the
transactions contemplated hereby, and neither party hereto shall have any
responsibility or liability to the other party hereto with respect thereto. Any
review by either party of the other party, the transactions described herein or
other matters relating to such transactions will be performed solely for the
benefit of the reviewing party and shall not be on behalf of the other party.
9.    WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING,

MIA 185961412v9

--------------------------------------------------------------------------------

Veterans Accountable Care Group, LLC
August 15, 2017
Page 6

SUIT, CLAIM OR COUNTERCLAIM BROUGHT BY OR ON BEHALF OF ANY PARTY RELATED TO OR
ARISING OUT OF THIS LETTER.
10.    Governing Law. This letter shall be governed by, and construed in
accordance with the laws of the State of Florida without regard to principles of
conflicts of law to the extent that the application of the laws of another
jurisdiction will be required thereby. Each of the parties hereto hereby
irrevocably and unconditionally submits to the exclusive jurisdiction of the
federal and state courts located in Miami-Dade County, Florida (and appellate
courts thereof) in connection with any dispute related to this letter or any
matters contemplated hereby and agrees that any service of process, summons,
notice or document by registered mail addressed to such party shall be effective
service of process for any suit, action or proceeding relating to any such
dispute. You and we irrevocably and unconditionally waive any objection to the
laying of venue of any such suit, action or proceeding brought in any such court
and any claim that any such suit, action or proceeding has been brought in an
inconvenient forum. A final judgment in any such suit, action or proceeding may
be enforced in any jurisdiction by suit on the judgment or in any other manner
provided by law.
11.    Miscellaneous.
(a)    Each of OPKO and VACG agrees that, subject to the last sentence of this
subparagraph (a), this letter is intended as and constitutes a binding and
enforceable agreement with respect to the subject matter contained herein, it
being acknowledged and agreed that the terms of the Facility shall be reflected
in the Definitive Agreements between Lender and VACG; provided, that OPKO shall
be deemed to satisfy its obligations under paragraph 1 of this letter if it
enters into the Definitive Agreements to provide the Facility (through one or
more of its affiliates) or arranges the Facility with a third party lender.
Notwithstanding anything in this letter to the contrary, in the event VHA does
not issue the CCN Contract to VACO, the parties agree that this letter shall be
deemed automatically null and void and the parties’ respective agreements set
forth herein (other than the obligations under paragraphs 5, 6 and 7 of this
letter) shall be deemed automatically terminated, in either ease without
liability, and, thereafter, neither OPKO nor VACG nor their respective
affiliates shall have any obligation or liability with respect to the matters
set forth in this letter or otherwise relating to the Facility (other than any
obligation or liability under paragraphs 5, 6 and 7 of this letter). In the
event that, after the Award Date, the Award is irrevocably withdrawn in
connection with any bid protest, the parties agree that the Facility shall be
automatically rescinded and this letter and the Definitive Agreements relating
to the Facility shall be deemed automatically null and void, in each case
without liability, and, in such event: (i) VACG shall promptly return to Lender
the full amount of the proceeds of the Facility previously paid to VACG, if any,
in accordance with the terms of the Definitive Agreements; (ii) OPKO shall
immediately forfeit and relinquish the Membership Interest in VACO (including,
without limitation, returning to VACO any certificates representing such
Membership Interest), and OPKO shall cease to have or to be entitled to benefit
from any rights as a Member of VACO; and (iii) the parties shall, at their
respective expense, promptly take such other actions as may be necessary in
order to unwind the Facility and the Definitive Agreements, provided that to the
extent the Definitive Agreements are executed by VACG with a Lender, OPKO shall
have no obligation to take any further action to unwind the Facility.

MIA 185961412v9

--------------------------------------------------------------------------------

Veterans Accountable Care Group, LLC
August 15, 2017
Page 7

(b)    This letter constitutes the entire agreement and understanding between
you and OPKO with respect to the transactions described in this letter and
supersedes all prior written or oral agreements and understandings relating to
the specific matters hereof. No individual has been authorized by you or OPKO to
make any oral or written statements that are inconsistent with this letter.
(c)    This letter may not be amended or any provision hereof waived or modified
except by an instrument in writing signed by the parties hereto.
(d)    This letter shall not be assignable by any party hereto without the prior
written consent of each other party hereto (and any purported assignment without
such consent shall be null and void), except that OPKO may assign this letter
and its obligations hereunder to any affiliate of OPKO, is intended to be solely
for the benefit of the parties hereto and is not intended to and does not confer
any benefits upon, or create any rights in favor of, any person other than the
parties hereto and, to the extent expressly set forth herein, the Indemnified
Persons.
(e)    Notwithstanding anything to the contrary set forth in this letter, the
compensation, expense reimbursement, confidentiality, indemnification, governing
law, waiver of jury trial, and forum provisions in this letter shall survive
termination or expiration of this letter. The provisions under the heading
“Information” above shall survive the execution and delivery of this letter and
the definitive agreements relating to the Facility.
(f)    Headings are for convenience of reference only and shall not affect the
construction of, or be taken into consideration when interpreting, this letter.
(g)    Delivery of an executed counterpart of a signature page to this letter by
facsimile or electronic .pdf shall be effective as delivery of a manually
executed counterpart of this letter. This letter may be executed in any number
of counterparts, and by the different parties hereto on separate counterparts,
each of which counterpart shall be an original, but all of which shall together
constitute one and the same instrument.
Please indicate your acceptance of the terms of this letter by returning to us
executed counterparts hereof and thereof by no later than 5:00pm ET on August
16, 2017.
[Remainder of page intentionally left blank]

MIA 185961412v9

--------------------------------------------------------------------------------

Veterans Accountable Care Group, LLC
August 15, 2017
Page 8

We are pleased to have been given the opportunity to assist you in connection
with this matter.

    
Very truly yours,
 
OPKO HEALTH, INC.
 
 
By:
/s/ Steven D. Rubin
Name:
Steven D. Rubin
Title
EVP Administration

 
 
Approved for Signature
 
 
OPKO Legal Department
 
 
By:
/s/ Camielle Green
 
 
Date:
8/10/17
ACCEPTED AND AGREED:
 
 
 
 
 
VETERANS ACCOUNTABLE CARE GROUP, LLC.
 
 
 
 
 
 
By:
/s/ David R. Nelson
 
 
 
David R. Nelson
 
 
 
President and Chief Executive Officer
 
 

MIA 185961412v9