Parties & Agreements
Last updated
Last updated
A Segregated Portfolio Company (SPC) is a bankruptcy-remote entity with distinct asset and liability segregation. Each SP operates independently within the SPC framework.
Underwriters will be responsible for sourcing new borrower clients (GPU Providers), conducting comprehensive due diligence on clients and structuring transactions working with all 3rd parties involved. Transactions by underwriters will be underwritten in an agent capacity ‘selling’ the sourced borrower client transactions to investors (GAIB SPs). GAIB’s SPC will contain multiple deals at any given time, of which they can be sourced by GAIB acting as the Underwriter, a trusted 3rd Party Underwriter, or a combination of the two. 3rd Party Underwriters will undergo screening via GAIB’s Credit Committee.
GPU Providers are the end clients borrowing capital through GAIB’s protocol. Transaction proceeds will be used solely in relation to GPU as an asset; investment in new GPUs, refinancing existing debt on GPUs, working capital for GPU related operations, etc. GPU Providers and their assets will undergo an internal screening process to ensure they meet GAIB’s Tokenizing Criteria and be verified by an independent 3rd party verification agent. GPU Providers will be brought forward to the Credit Committee internally or through approved 3rd Party Underwriters.
SP → Underwriter: Loan Participation Agreement.
Underwriter → GPU Provider: Secured Loan Agreement & Collateral Agreement.
Cayman SPC → Tokenization Engine: Tokenization Service Agreement.
Loan Participation Agreement between SPs and Underwriters:
SP will purchase Loan Participation Interests in the assets originated by the Underwriter, essentially extending SP capital as a loan to the Underwriter. It will contain protective provisions such that if the Underwriter does not honor the agreement SP has recourse to Underwriter. Event Defaults under the Participation Agreement will trigger an elevation, entitling SP to all contractual remedies against the end GPU Provider afforded to the Underwriter under their Underlying Asset Agreement.
Secured Loan Agreement between Underwriters and GPU Providers:
Depending on the Underwriter (GAIB or Trusted 3rd Party), the loan agreement will define total loan amount, interest payments, and loan covenants. It will also define loan collateral whereby GPU assets can be ring-fenced through a ‘True Sale’ to another SPV with controlling interests by the Underwriter. The ‘True Sale’ gives economic and beneficial ownership of the assets (GPUs) in the event of loan default or borrower bankruptcy. Furthermore, loan agreements can contain provisions for: personal guarantees by company directors, charge over shares and existing assets, assignment of future SLA payments, and/or assignment of insurance contracts.
Asset Tokenization/Service Agreement between GAIB Tokenization Engine and SPC
The SPC will tokenize and deploy assets on GAIB’s blockchain network. These tokens will represent ownership interest, rights or participation in the underlying assets managed by the SPC, specifically being the Participation Interests in GPU-backed loans. The SPC will ensure compliance with applicable AML & KYC requirements, and GAIB’s Tokenization Engine will provide integration support.
