onix capital receivership - united states district...

UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF FLORIDA

CASE NO.: 16-CV-24678-COOKE/TORRES

SECURITIES AND EXCHANGE COMMISSION,

Plaintiff,

v.

ONIX CAPITAL LLC, et al.,

Defendants._____________________________________________/

PURCHASE AGREEMENT AND BIDDING PROCEDURES

EXPEDITED RELIEF REQUESTED

The Receiver requests an expedited telephonic hearing on this Motion to set therequisite dates for the bidding procedures and auction process detailed below.

An expedited hearing will allow the Receiver to liquidate these assets during thefirst quarter of 2019 and distribute the assets from that sale to claimants soon

thereafter.

Receiver

Onix

LLC, Next Chat Ventures LLC, Next Pay Ventures LLC, Next U Ventures LLC, Next Track

Ventures LLC, and Progressive Power LLC (coll Relief Defendants

Receivership Entities

Asset Purchase Agreement Purchase Agreement the

shares of SherpaCapital Partners UB II, LLC Sherpa Assets and all

related rights free and clear of all liens, claims, interests and encumbrances, including beneficial

interests, to BryanDB LLC Buyer 1,507,998.00 (subject to adjustment pursuant to the

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terms of the Purchase Agreement), or to another higher bidder at auction in accordance with the

proposed bidding procedures described in this Motion. In support, the Receiver states:

SUMMARY OF RELIEF REQUESTED

By this Motion, the Receiver requests that the Court: (1) authorize the Receiver to enter

into the Asset Purchase Agreement with Buyer for the sale of the Purchased Assets (as defined in

the Asset Purchase Agreement); (2) approve the bidding procedures for submission of higher and

better offers for the purchase of the Purchased Assets, including the bid protections to be afforded

the form of notice to be provided to interested parties; and (4) schedule a final hearing to approve

the sale of the Purchased Assets to Buyer or such higher and better bidder at auction.

BACKGROUND

SEC

action against Onix, Alberto Chang-Rajii, and the Relief Defendants. [DE 1]. The SEC requested

the appointment of a Receiver to exercise full power and control over Onix and the Relief

protection of in

appointing the Receiver to exercise full power and control over Onix and the Relief Defendants,

including all of their assets within the United States [DE 84]. The Court has specifically tasked

The primary assets of the Receivership Entities are equity holdings in non-public and

public companies, including Uber . Relief Defendant Next Cab

Next Cab Uber through an investment in a private equity

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vehicle, SherpaCapital Partners UB II, LLC Sherpa In April 2015, Onix transferred a

$2,000,000 capital amount commitment and a $10,633 expense amount commitment for an

aggregate capital commitment of $2,010,633.00 to Sherpa in exchange for 2,010.633 shares or

units of Sherpa. On October 1, 2015, Onix transferred its economic interest in Sherpa to Relief

Defendant Next Cab. s equivalent, privately

held, Series F shares in Uber.

SOLICITATION OF STALKING HORSE

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1 Capitalized terms used but not defined herein have the meaning given to such terms in the Purchase Agreement.

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- The sale of the Sherpa Assets in accordance with the terms of the Purchase

Agreement is approved and the Receiver shall be directed to consummate all of the transactions

contemplated thereby.

- At the Closing, Buyer or its designee will be vested with all options, privileges,

right, title and interest in, to and under the Purchased Assets, free and clear of all encumbrances.

- The sale of the Purchased Assets is not precluded by or contrary to any prior Order

issued by the Court and no further consents by any Person (including any Governmental Authority)

are required to convey the Sherpa Assets to Buyer in accordance with the Purchase Agreement.

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Respectfully submitted,

KOZYAK TROPIN & THROCKMORTON LLPCounsel for the Receiver2525 Ponce de Leon Boulevard, 9th FloorMiami, Florida 33134Tel: (305) 372-1800Fax: (305) 372-3508

By: /s/Daniel S. MalandCorali Lopez-CastroFL Bar No. 863830David L. RosendorfFL Bar No. 996823Daniel S. MalandFL Bar No. [email protected]@[email protected]

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true copy of the foregoing has been served via transmission

of Notices of electronic Filing generated by CM/ECF on December 7, 2018 as filed with the Clerk

of the Court using CM/ECF.

By: /s/ Daniel S. MalandDaniel S. Maland

EXHIBIT A

ASSET PURCHASE AGREEMENT

BNOTICE

NOTICE TO INVESTORS & INTERESTED PARTIESOF PROPOSED SALE OF RECEIVERSHIP ASSETS & BIDDING PROCEDURES

On November 8, 2016 the SEC filed a complaint against the Securities and Exchange

Commission initiated its action against Alberto Chang-Rajii, Onix

Relief Defendants Deep Ocean LLC, Next Cab Ventures LLC, Next Call Ventures LLC, Next

Chat Ventures LLC, Next Pay Ventures LLC, Next U Ventures LLC, Next Track Ventures LLC,

and Progressive Power LLC. In connection with that Complaint the federal judge overseeing the

SEC case, Judge Cooke, appointed Melanie Damian as Receiver of Onix and the Relief

Defendants. The Court has specifically tasked the Receiver to marshal and safeguard all such

assets and take whatever actions necessary for the protection of any investors of Onix and/or Relief

Defendants.

The primary assets of the Receivership Entities are equity holdings in non-public and

public companies, including Uber Technologies Inc. Relief Defendant Next Cab Ventures LLC

Next Cab

Sherpa

capital amount commitment and a $10,633 expense amount commitment for an aggregate capital

commitment of $2,010,633.00 to Sherpa in exchange for 2,010.633 shares or units of Sherpa.

On October 1, 2015, Onix transferred its economic interest in Sherpa to Relief Defendant Next

shares in Uber.

The Receiver has determined that the best method to sell the Sherpa Assets is a competitive

to close on a sale at a specified purchase price that will establish the minimum value to be offered

for the Sherpa Assets.

The Receiver has now received Court approval to enter into an Asset Purchase Agreement

with qualified Stalking Horse bidder, who has offered $1,507,998.00 as a starting bid for the

The Asset Purchase Agreement contains many terms and conditions that are described in

greater detail in the

Bidding Procedures on December

7, 2018. A copy of the Purchase Agreement and Bidding Procedures Motion, together with the

Asset Purchase Agreement , are available on the

www.onixcapitalreceivership.com and can be obtained by requesting a copy

from the Onix Receiver c/o Farola Saint-Remy, Kozyak Tropin & Throckmorton, 2525 Ponce De

Leon, 9th Floor, Miami, Florida 33134 and [email protected].

Pursuant to the Bidding Procedures Order, the Court approved the Bidding Procedures

attached hereto as Exhibit A. Additionally, pursuant to the Bidding Procedures Order, the Court

approved the payment of a termination fee which is payable to Buyer upon the occurrence of

certain events, including in the event that another bidder is approved as the purchaser pursuant to

the Bidding Procedures or if the Receiver breaches the Asset Purchase Agreement or fails to close

after all conditions to closing have been satisfied. Finally, pursuant to the Bidding Procedures

Order, the Court approved this Notice and authorized the Receiver to publish this Notice on the

In order to maximize the value of the Initial Auction Portfolio, the sale to Buyer will be

subject to higher and better offers and the Receiver will solicit other purchasers to submit such

offers pursuant to the Bidding Procedures. If other qualified offers are submitted in accordance

with the Bidding Procedures, an auction will be conducted on ________________ and the

Receiver will present the highest and best offer obtained at the conclusion of such auction to the

Court for approval at a Sale Hearing to be conducted on or after _______________________(the

no auction will be conducted and the sale to Buyer pursuant to the Asset Purchase Agreement will

be presented for approval at the Sale Hearing.

BIDDING PROCEDURES

Set Bidding Proceduresrespe Agreement

SellerCourt and BryanDB LLC

Buyersuch terms in the Agreement.

sold, the sale of the Sherpa Assets must be subject to higher and better offers. It is common insuch situations for the seller and a stalking horse bidder to request the approval of certain bidprocedures that will both protect the stalking horse bidder for the investment of time, expense andeffort made in formulating and pursuing an initial bid (which will itself encourage the participationof other bidders), and also encourage and promote serious yet competitive bidding on the assetsthat will yield the highest and best offer.

The bid procedures incorporated into the Purchase Agreement, and which the Receiverrequests that this Court approve, are as summarized below, with such summary being qualified inall respects by the terms of the bidding procedures attached to the Asset Purchase Agreement (theBidding Procedures

Participation Requirements

To participate in the bidding process a potential bidder must provide to the Receiver:

(1) an executed non-disclosure agreement that affirms they are an accredited investor and,(2) an affidavit of non-affiliation with the Receivership Entities.

Within 2 business days after such materials have been provided to the Receiver, theReceiver shall advise the potential bidder if it is qualified as a bidder and shall provide such bidderwith the same evaluation materials for the Sherpa Assets as were provided to the Buyer.

Bid Deadline

Written copies of bids must be deliveredThrockmorton, P.A., at 2525 Ponce de Leon Boulevard, 9th Floor, Coral Gables, FL 33134,Attention: Daniel S. Maland, Esq., fax: (305) 372-3508, Email: [email protected] by no later

Bid Deadlineimmediately provide Buyer with a copy of any bids submitted by the Bid Deadline.

Due Diligence

Qualified bidders may conduct due diligence until the Bid Deadline, which shall be set byCourt order or notice from the Receiver.

Bidders must submit bids by the Bid Deadline. A bid must state that (i) the bidder offersto purchase the Purchased Assets upon the terms and conditions set forth in the Purchase

the sale to the successful bidder, or 20 days after the Sale Hearing. The bid must be accompaniedby a cash deposit of fifty thousand dollars ($50,000.00) and evidence of financial ability toconsummate the transaction acceptable to the Receiver.

Acceptance of Overbids

A bid shall qualify as an Overbid if (i) the bid is all cash and does not contain any form ofcontingent consideration; (ii) the bid will produce value to the Receiver at least $25,000.00 greaterthan that produced by the Purchase Agreement; (iii) the overbid agreement is in the form of thePurchase Agreement except with respect to the identity of the purchaser; (iv) the bid isaccompanied by such other information as is reasonably requested by the Receiver.

Auction

If qualified overbids have been received from at least one bidder, the Receiver will conductan Auction. The Auction will take place not later than five (5) business days after the Bid Deadline,at the offices of Kozyak Tropin & Throckmorton, LLP or such other location as the Receiverdesignates. Only qualified bidders who have submitted an overbid and Buyer will be eligible toparticipate in the auction. Qualified bidders will be advised at least one business day prior to theAuction Date of the identity of the other qualified bidders and of the highest and best overbid

At the Auction, each qualified bidder will be permitted to increase its bid, and all auctionparticipants shall be entitled to be present for all bidding. Bidding shall proceed in increments of$10,000 greater than the Initial Successful Bid and shall be subject to all requirements of anOverbid.

The Auction shall continue until each auction participant has indicated its unwillingness toincrease its bid further. Upon the conclusion of the Auction, the Receiver will identify the Overbid

Receiver will notify all auction participants of the identity of the successful bid and shall file a-

approval.

The Motion will request that the Court schedule a Sale Hearing, to occur no more thanthree (3) business days after the Auction, to approve the sale of the Assets to the Successful Bidder.If the Successful Bidder, as approved by the Court, fails to timely consummate the sale because ofa breach or failure to perform by the Successful Bidder, the Back-Up Bid, as approved by theCourt, shall be deemed to be the Successful Bid and shall be authorized to effectuate the salewithout further Court order. Any Overbid shall be deemed accepted by the Receiver only uponapproval by the Court.

Failure to Consummate Purchase

If a Successful Bidder fails to timely consummate the sale of the Assets, and such failure

to Seller and Seller, except to the extent provided in the Purchase Agreement, reserves all rightsto seek damages from such bidder.

Objections

Return of Good Faith Deposit

The deposits of the Successful Bidder and Back-Up Bidder shall be held in trust until theearlier of (A) the earlier of two business days after consummation of the sale, or 20 days after theSale Hearing; or (B) the date on which the Agreement is terminated in accordance with its terms.All other deposits of unsuccessful bidders shall be returned within two business days of the entryof the Sale Order.






EXHIBIT CProposed Order

UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF FLORIDA

CASE NO.: 16-CV-24678-COOKE/TORRES

SECURITIES AND EXCHANGE COMMISSION,

Plaintiff,

v.

ONIX CAPITAL LLC, et al.,

Defendants._____________________________________________/

PURCHASE AGREEMENT AND BIDDING PROCEDURES

Melanie E. Damian, Esq., as Receiver has filed a Motion to Approve Stalking Horse

Purchase Agree

Sherpa Assets all liens, claims,

Buyer

$1,507,998.00 (subject to adjustment pursuant to the terms of the Purchase Agreement), or to

another higher bidder at auction in accordance with the proposed bidding procedures described in

this Motion. The Court has considered the Motion, the representations of the Receiver therein, the

attached Asset Purchase Agreement between the Receiver and Buyer, the record in this case,

relevant authorities, and any objections filed, and makes the following findings and conclusions:

1. Adequate notice of the Motion has been provided to all parties in interest and/or

will be provided pursuant to the additional notice approved by this Order. This Court has

jurisdiction over this matter and the property of the Receivership estate.

2.

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assets and take whatever actions necessary for the protection of any investors of Onix and/or Relief

12. The sale of the Purchased Assets is not precluded by or contrary to any prior Order

issued by the Court and no further consents by any Person (including any Governmental Authority

or holder of any beneficial interest) are required to convey the Purchased Assets to Buyer (or

another higher and better bidder) in accordance with the Purchase Agreement.

1 Capitalized terms used herein shall have the meanings ascribed to them in the Purchase Agreement unlessotherwise indicated.

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DONE AND ORDERED in the SouthernDistrict of Florida on December _____, 2018.

______________________________________________HONORABLE MARCIA G. COOKEUNITED STATES DISTRICT JUDGE

COPIES FURNISHED TO:

Counsel of Record

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BIDDING PROCEDURES

Set Bidding ProceduresAgreement

and between Melanie Damian, as the receiver (in such ca SellerCourt

Buyersuch terms in the Agreement.

sold, the sale of the Sherpa Assets must be subject to higher and better offers. It is common insuch situations for the seller and a stalking horse bidder to request the approval of certain bidprocedures that will both protect the stalking horse bidder for the investment of time, expense andeffort made in formulating and pursuing an initial bid (which will itself encourage the participationof other bidders), and also encourage and promote serious yet competitive bidding on the assetsthat will yield the highest and best offer.

The bid procedures incorporated into the Purchase Agreement, and which the Receiverrequests that this Court approve, are as summarized below, with such summary being qualified inall respects by the terms of the bidding procedures attached to the Asset Purchase Agreement (theBidding Procedures

Participation Requirements

To participate in the bidding process a potential bidder must provide to the Receiver:

(1) an executed non-disclosure agreement that affirms they are an accredited investor and,(2) an affidavit of non-affiliation with the Receivership Entities.

Within 2 business days after such materials have been provided to the Receiver, theReceiver shall advise the potential bidder if it is qualified as a bidder and shall provide such bidderwith the same evaluation materials for the Sherpa Assets as were provided to the Buyer.

Bid Deadline

Written copies of bThrockmorton, P.A., at 2525 Ponce de Leon Boulevard, 9th Floor, Coral Gables, FL 33134,Attention: Daniel S. Maland, Esq., fax: (305) 372-3508, Email: [email protected] by no later

Bid Deadlineimmediately provide Buyer with a copy of any bids submitted by the Bid Deadline.

Due Diligence

Qualified bidders may conduct due diligence until the Bid Deadline, which shall be set byCourt order or notice from the Receiver.

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Bidders must submit bids by the Bid Deadline. A bid must state that (i) the bidder offersto purchase the Purchased Assets upon the terms and conditions set forth in the Purchase

the sale to the successful bidder, or 20 days after the Sale Hearing. The bid must be accompaniedby a cash deposit of fifty thousand dollars ($50,000.00) and evidence of financial ability toconsummate the transaction acceptable to the Receiver.

Acceptance of Overbids

A bid shall qualify as an Overbid if (i) the bid is all cash and does not contain any form ofcontingent consideration; (ii) the bid will produce value to the Receiver at least $25,000.00 greaterthan that produced by the Purchase Agreement; (iii) the overbid agreement is in the form of thePurchase Agreement except with respect to the identity of the purchaser; (iv) the bid isaccompanied by such other information as is reasonably requested by the Receiver.

Auction

If qualified overbids have been received from at least one bidder, the Receiver will conductan Auction. The Auction will take place not later than five (5) business days after the Bid Deadline,at the offices of Kozyak Tropin & Throckmorton, LLP or such other location as the Receiverdesignates. Only qualified bidders who have submitted an overbid and Buyer will be eligible toparticipate in the auction. Qualified bidders will be advised at least one business day prior to theAuction Date of the identity of the other qualified bidders and of the highest and best overbidreceived as determined

At the Auction, each qualified bidder will be permitted to increase its bid, and all auctionparticipants shall be entitled to be present for all bidding. Bidding shall proceed in increments of$10,000 greater than the Initial Successful Bid and shall be subject to all requirements of anOverbid.

The Auction shall continue until each auction participant has indicated its unwillingness toincrease its bid further. Upon the conclusion of the Auction, the Receiver will identify the Overbid

Receiver will notify all auction participants of the identity of the successful bid and shall file anotice presenting the Succe -approval.

The Motion will request that the Court schedule a Sale Hearing, to occur no more thanthree (3) business days after the Auction, to approve the sale of the Assets to the Successful Bidder.If the Successful Bidder, as approved by the Court, fails to timely consummate the sale because ofa breach or failure to perform by the Successful Bidder, the Back-Up Bid, as approved by theCourt, shall be deemed to be the Successful Bid and shall be authorized to effectuate the salewithout further Court order. Any Overbid shall be deemed accepted by the Receiver only uponapproval by the Court.

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