PLEASE TAKE NOTICE THAT the secured parties named below, acting in concert, will conduct, through their counsel acting as their agent, Sugar Felsenthal Grais & Helsinger LLP (the “Agent“), on March 24, 2021 at 1:00 p.m. CDT or such later date as provided below (the “Auction Date”) a disposition of the below described collateral by public sale by auction (the “Auction”) in accordance with the provisions of the New York Uniform Commercial Code, Section 9-101 et seq. (the “UCC”) as a result of certain defaults by the below named debtor under the Loan Documents, as defined below.
a) Debtor: The debtor is Open Door Trading, LLC, a Delaware limited liability company (“Borrower“).
b) Secured Party: The secured parties conducting this public sale of the Property, as defined below, of Borrower are George A. Zelcs, Darcy Bradbury, Jing Sun Burke, Christopher Matthew Burke and Stephen Tillery (collectively, “Secured Party“).
c) Agreements Pursuant to Which the Sale is Held:
(Collectively, the foregoing documents are referred to as the “Loan Documents”.)
d) Date, Hour and Manner of Sale: The Auction will be conducted on the Auction Date at 1:00 p.m. CDT by video conference using Zoom or similar platform (the “Video Platform”).
e) Description of Property to be Sold: All of the right, title and interest of Borrower in (i) Borrower’s intellectual property associated with Borrower’s fixed income electronic platform software and associated patent rights a (the “Intellectual Property”), (ii) Borrower’s 100% of the membership interest in OpenDoor Securities, LLC, a Delaware limited liability company (“ODS”), a broker dealer registered with the U.S. Securities and Exchange Commission and FINRA member engaged in trading fixed income securities using the software of Borrower described below, (iii) Borrower’s rights under that certain Reseller Agreement, dated as of January 1, 2020 between Borrower and ODS, (iv) a proprietary database containing over two years of intra-day and closing historical pricing data on all actively traded U.S. Treasuries and Treasury Inflation Protected Securities (TIPS), consisting of over 350 separate securities and (v) an agreement with Amazon Web Services (AWS) to host the foregoing database ((i), (ii), (iii), (iv) and (v) referred to collectively as, the “Property“). Secured Party has a first priority security interest in the Property. The total amount due to Secured Party is in excess of $8.6 million. Secured Party may bid for the Property and credit bid against all or a portion of its secured claim. The Property will be sold free and clear of Secured Party’s lien and any subordinate security interests in the Property.
The Intellectual Property portion of the Property includes the following assets:
Borrower Software Assets*
The fixed income electronic platform software, including:
The OpenDoor Trading platform software being sold includes a matching engine, order proxy, mid generator, order ranking service, activity download, file upload handler, auction governor, auction timer, auction set up, credit limits system, post-trade system, fix API, advertising system, pricing system, system GUI and other software features developed to facilitate the operation of the trading platform.
* The Borrower’s software platform was originally developed by ODS and later transferred to the Borrower but continues to be used by ODS.
The Intellectual Property was developed by ODS and later assigned to Borrower.
A complete description of the Property and the assets and liabilities of ODS can be obtained by accessing a Virtual Data Room maintained by the Agent.
f) Participation Requirements: In order to participate in the bidding process at the Auction and obtain admittance to the Video Platform, each person (a “Potential Bidder“) must deliver to the undersigned counsel to Secured Party at ([email protected]) not less than two business days prior to Auction Date:
g) Information and Due Diligence: A Potential Bidder that complies with the foregoing requirements shall be deemed a qualified bidder (“Qualified Bidder“). A Qualified Bidder will be permitted to perform due diligence by contacting the following representative of the Agent for access to the Virtual Data Room: Christopher Horvay ([email protected]). Secured Party will be deemed to be a Qualified Bidder. The information contained in the Virtual Data Room or otherwise provided to qualified, interested parties, has been provided by the Borrower. Neither the Secured Party nor its staff, agents or attorneys, has independently verified such information, nor do they warrant the truth or accuracy of any statement made therein. Interested parties are solely responsible for performing their own due diligence to determine the nature, value, fitness for use and status of the offered Property through independent investigation by themselves and their legal and financial advisors.
h) Terms of Sale: At the Sale, the Property above shall be offered for acquisition by Qualified Bidders. The Property will be sold at the public Auction to the highest Qualified Bidder. Agent reserves the right to permit, at its sole discretion, Qualified Bidders to participate telephonically in the auction. The Auction will be conducted by open bidding in the Video Platform in accordance with the bidding procedures to be distributed by the Agent not less than one business day prior to the Auction Date. The Auction will be recorded.
The Property shall be sold for cash at such price or prices and on such other commercially reasonable terms as Secured Party may determine in its sole discretion. Higher bids will continue to be entertained until Secured Party has determined that it has received the highest or best bid for the Property in its sole discretion. Secured Party shall be permitted to bid at the sale and, notwithstanding any requirement herein that the sale of the Property be for cash, may credit its bid against all or a portion of its secured claim and become the purchaser of the Property. Secured Party reserves the right to reject all bids and terminate the sale or adjourn the sale to such other time or times as it may deem proper only by announcement on the date of sale or any subsequent adjournment thereof without further publication and impose any other commercially reasonable conditions upon the sale of the Property as it may deem proper. Payment will be accepted only by wire transfer of same day funds, or, in the case of purchase by Secured Party, credit against amounts due under the Loan Documents. Payment must be made in full within two business days of the sale by a wire transfer of same day funds, or on such other terms as agreed by Secured Party in its sole discretion. The sale of the Property shall be effectuated by delivery of a Secured Party Bill of Sale with no representations, no warranties (whether express or implied) and all Property sold, “as-is, where-is, with all faults.”.
The Secured Party, if it deems advisable, will designate a second party as back-up bidder in the event that the successful bidder is unable to consummate the anticipated transaction. If, at any point, the successful bidder or backup bidder is unable to fulfill its commitments, its Sale Deposit will be forfeited to the Secured Party. The Secured Party may, in its sole and absolute discretion, waive this forfeiture.
i) No Warranties: The Property will be sold “AS IS, WHERE IS,” “WITH ALL FAULTS,” and “WITHOUT ANY WARRANTIES WHATSOEVER, EXPRESSED OR IMPLIED, INCLUDING, WITHOUT LIMITATION, A WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR OR OTHER PURPOSE,” and subject to taxes, special assessments and liens that have been levied or assessed, and/or are unpaid or unsatisfied (none of which will be paid by Secured Party). The Property is being sold without recourse to Secured Party, its attorneys or representatives. Secured Party does not claim title to the Property being sold hereunder and disclaims any warranty of title, possession, quiet enjoyment and the like in the sale.
j) No Fees Payable: No person shall be entitled to any expense reimbursement, brokerage fee, breakup fee, “topping,” termination or similar fee or payout from the proceeds of the Sale.
k) Right to Accounting: Pursuant to the requirements of New York UCC Section 9-613, Borrower shall be entitled to an accounting of the unpaid indebtedness secured by the Property. An accounting may be requested by calling the undersigned counsel for Secured Party.
1) Right to Redeem: Until the earlier of (1) the effectuation of the public sale of the above described Property or (2) the execution of a contract for the sale of the Property, Borrower shall have the right to redeem the above-described property by payment or fulfillment of all obligations under the Loan Documents, together with payment of all additional expenses incurred by Secured Party.
m) Postponement of Public Sale: The public Auction scheduled on the date set forth above may be postponed. In such event, an announcement of postponement of the scheduled sale will be made by Secured Party at the currently proposed date and time of the Auction and by Secured Party contacting all Qualified Bidders by email.
Dated: February 25, 2021
Sugar Felsenthal Grais & Helsinger LLP
30 N. LaSalle Street, Suite 3000
Chicago, IL 60602
Attorneys for the Secured Party
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