Legal Framework

Every Axcess facility rests on a set of signed agreements. Together they define who owes what to whom, who holds which assets, and what each party can do if an obligation is not met. This page maps each agreement to the entity that acts under it, to what happens on-chain, and to the recourse it provides.

The Entities

How the Agreements Fit Together

The lender’s only counterparty is the Issuer. The Issuer’s only counterparty for the loan is the borrower. Each agreement sits between two parties, and each party’s recourse runs along these lines.

Note Subscription Agreement

Between: the lender and the Issuer, acting for the borrower’s segregated portfolio. The lender subscribes for a fixed-rate note issued for the portfolio. The proceeds of the notes are the portfolio’s contribution to the borrower’s facility, which the Issuer extends as lender of record.

• Return accrues from the moment of deposit and is sourced from the interest the borrower pays under the Master Loan Agreement. The coupon rate is set for each facility in the agreement’s schedule. The Issuer may change it by notice through the platform: a change that follows a change to the borrower’s base rate takes effect at the start of the second epoch after the notice, and a change to a fee applies only to return accruing afterwards.
• Fee. The difference between the borrower’s base rate and the coupon rate is the Issuer’s fee, for the account of the portfolio. It ranks behind matured lender claims and is never deducted from principal. Penalty interest collected from the borrower passes through to lenders in full.
• Withdrawals follow the request, notice, and funding process that the vault carries out. See Withdrawals.
• Recovery on an Event of Default is shared pro rata among the portfolio’s lenders, in a fixed order: the first-loss buffer applied by set-off, then undrawn portfolio funds distributed on termination, then the proceeds of legal enforcement against the borrower.
• Ring-fenced claim. The note is backed solely by the assets of the borrower’s segregated portfolio. Under Cayman Islands law those assets are not available to meet the liabilities of any other portfolio, and other portfolios’ assets are not available to the lender.
• No direct claim against the borrower, and no claim against Axcess.
• Yield on the buffer. Yield earned on the first-loss buffer, and on undrawn funds that the Issuer holds in an approved yield-bearing instrument, belongs to the Issuer for its own account. It is not held in reserve for lenders and does not cover any shortfall. The agreement describes the buffer as a partial buffer and states that it is not a guarantee.
• Eligibility. The lender represents that it is an institutional, professional, or accredited investor; that it is not a US person; that it is not organised, resident, or located in a member state of the European Union or the European Economic Area, the United Kingdom, Canada, or the People’s Republic of China (excluding Hong Kong and Macau); and that it is not subject to sanctions. Sanctions screening continues throughout the life of the note, and the lender’s KYC status is re-verified before each distribution after a termination.
• Governing law: Cayman Islands, with the exclusive jurisdiction of the Cayman Islands courts.

The agreement is accepted in the app, before the first deposit, by a wallet signature over the document’s hash. The acceptance is then registered in the on-chain lender registry that gates deposits, withdrawal requests, and claims. Recourse. The lender’s rights are enforceable against the Issuer in respect of the portfolio’s assets: the cash in the vault, the buffer proceeds applied for lenders, and whatever the Issuer recovers from the borrower.

Master Loan Agreement

Between: the Issuer, as lender of record for the segregated portfolio, and the borrower.

• Draws are transferred on-chain to the borrower’s registered drawdown account. No draw is processed beyond what the posted first-loss buffer supports. Each loan is recorded in a Loan Confirmation that states the amount, the facility currency, the drawdown account, and the use of proceeds.
• Repayment can be made at any time, and any person may repay on the borrower’s behalf. There is no scheduled amortisation. A redraw after a repayment is processed against the buffer that remains posted; a top-up is needed only where the redraw would take drawn principal beyond what that buffer supports.
• Facility currency. Facilities are denominated in USDC. The Issuer may make a draw available in another stablecoin or tokenised money-market instrument by agreement, converting as principal for its own account. A market loss on such a conversion, including a depeg or a failure of the currency’s provider, is not borne by the borrower and is never recovered from the buffer. It is borne by the Issuer in the first instance, after recourse to any protection the provider offers, and beyond that reduces the portfolio’s assets available to lenders. Only loss caused by the borrower’s own act or omission is indemnified by the borrower.
• Onboarding path. Under the Anchor Lender Path, the borrower’s own anchor lender has carried out due diligence and agreed the buffer percentage. Under the Credora Path, the borrower undergoes Credora’s operational and financial assessment, maintains a live data-sharing relationship with Credora, and is not offered a facility below grade C. The grade sets the Collateral Percentage, from 10% at A+ to 25% at C, in the steps set out in the agreement’s schedule.
• Monitoring. The borrower must provide and maintain a read-only API key to its monitoring account. Readings are taken approximately every hour and produce the Solvency Ratio and its contractual states: Healthy, Warning, Delinquent, and Default. If a fresh reading cannot be obtained, the most recent valid reading continues to apply, without prejudice to the borrower’s obligation to maintain the key. See Monitoring.
• Events of Default include a cash shortfall against matured withdrawal requests at an epoch boundary, a Solvency Ratio in the Default state, obstruction of monitoring or underwriting data, false or misleading data, insolvency, cross-default, breach of warranty, regulatory action that impairs repayment, use of proceeds inconsistent with the disclosed purpose, a material adverse change, and an unsatisfied judgment above a stated amount. Insolvency is an immediate Event of Default with no cure period. Tmust notify the Issuer promptly, within the period set out in the agreement.
• Consequences. All drawn principal and accrued interest become immediately due, the facility is paused, no new draws are permitted, and interest accrues at the Default Rate.
• Recovery waterfall. First, the buffer is applied by set-off, without court action, because the Issuer already owns it. Second, the facility may be terminated and undrawn portfolio funds distributed to lenders pro rata. Third, any remaining shortfall is pursued as a legal claim against the borrower.
• Ring-fencing. The borrower’s own claims against the SPC are enforceable only against the assets of its segregated portfolio.
• Governing law: Cayman Islands, with the exclusive jurisdiction of the Cayman Islands courts.

Recourse. The Issuer holds the direct contractual claim against the borrower, and enforces it for the benefit of the portfolio’s lenders.

Title Transfer Collateral Agreement

Between: the borrower and the Issuer, acting for the borrower’s segregated portfolio.

• Outright title transfer. The borrower transfers full legal and beneficial title to the first-loss buffer to the Issuer. The arrangement is a title transfer, not a charge, pledge, or other security interest, and the borrower retains no proprietary interest. The agreement records a Cayman Islands legal opinion to that effect, and acknowledges the risk that a court elsewhere could re-characterise it.
• Posted before draws. Nothing is transferred when the agreements are signed. The borrower posts the buffer before it draws, and the amount posted sets the draw capacity it supports; the required amount is the Collateral Percentage multiplied by the drawn principal. The buffer is posted once, not with every draw. A repayment on its own releases nothing; a release follows only a facility reduction that the borrower has notified, or a regrade that lowers the required amount. The borrower must top up within a cure period after a regrade that raises it, or before a draw that the posted buffer does not support. Lenders are notified through the platform, and by email where they have opted in, when a facility is reduced.
• Held in the SPC’s multisignature wallet. The Issuer may hold the buffer in an approved yield-bearing instrument. The yield belongs to the Issuer for its own account and does not form part of the buffer. The Issuer reports the buffer held, the yield accrued, and the required amount to the borrower at least monthly.
• Subordinated redelivery. The Issuer owes the borrower a contractual obligation to redeliver equivalent value at the close of the facility. That claim is expressly subordinated to the lenders’ claims. This is what makes the buffer first-loss capital.
• Set-off on default. On an Event of Default under the Master Loan Agreement, the Issuer applies the buffer to the lenders’ claims by set-off. No court action is required. Proceeds are distributed to lenders pro rata under the Note Subscription Agreement, and any surplus is returned to the borrower. The buffer cannot be applied to losses of the Issuer’s own that do not arise from the borrower’s default.
• Borrower protection. If the SPC itself fails, the borrower has a set-off right of its own against what it owes.

Recourse. For lenders, the buffer is the first source of recovery and requires no enforcement process. For the borrower, a subordinated contractual claim to redelivery and a set-off right if the SPC fails.

First-Loss Signing Mandate

Between: the SPC and each individual appointed as a signer of the first-loss wallet.

• Signers act solely as appointees of the SPC, not of the operating entity Axcess, whatever other role they hold. The wallet’s signing threshold is configured on-chain to match the appointment schedule.
• A signer may co-sign only an instruction that is consistent with the Title Transfer Collateral Agreement: a confirmed set-off after a properly declared Event of Default, a redelivery at a properly authorised close, or another written instruction of the SPC’s board.
• A signer must withhold signature from an instruction that the signer knows, or reasonably suspects, to be inconsistent with the agreements, and must report the grounds to the SPC’s board.
• Where an Independent Signer is appointed, that signer must independently confirm, from the underlying documents, that an Event of Default has been properly declared and that the proposed set-off is consistent with the agreements before co-signing. An Independent Signer must not have been an officer, director, employee, contractor, shareholder, or affiliate of Axcess or of any borrower within the preceding twelve months. Transactions outside the ordinary course, including any proposed after an Event of Default, require the Independent Signer’s written confirmation before they are executed.
• Every signer must disclose any personal or affiliated interest in a borrower or in Axcess, and must recuse from co-signing a transaction in which it has such an interest. A recusal does not reduce the signing threshold; the SPC must keep enough signers to authorise the transaction without the recused signer. The mandate annexes the SPC’s Related-Party Conflict Policy, under which related-party transactions are reviewed by the SPC’s board and, where the first-loss wallet is involved, by the Independent Signer.

Recourse. The mandate ensures that the buffer can move only for the purposes the collateral agreement allows.

Service Agreement

Between: the Cayman SPC, in its general corporate capacity for all portfolios, and Axcess.

• Axcess is appointed as a non-discretionary technology operator under delegated authority. It is not a principal, fiduciary, investment manager, or financial intermediary, and it owes no fiduciary duties to the SPC, any portfolio, any borrower, or any lender.
• Its services include operating the vault contracts, processing epochs, running the registration and monitoring systems, and initiating enforcement.
• It is prohibited from holding, taking custody of, or having signing authority over lender principal or the first-loss buffer, from acting as lender or borrower, and from taking any economic interest in a loan.
• It may use a borrower’s account data only to compute and display the monitoring output. It may not retrieve strategy or order-level data beyond what that requires, use the data for any other purpose, or disclose it to lenders or third parties other than in aggregated form, such as a published health state.
• Within the period set out in the Service Agreement, it must initiate: the margin call or formal default notice, the first-loss set-off instruction, and, where applicable, termination for the distribution of undrawn portfolio funds. Delay is subject to liquidated damages.
• If the agreement ends, Axcess must provide transition assistance for up to ninety days so that the platform continues to operate for lenders and borrowers.

Recourse. The Service Agreement is the SPC’s remedy against its operator. Lenders and borrowers are not parties to it and have no claim against Axcess.

Where Each Party’s Recourse Lies

What Is Recorded On-Chain and What Is Not