mla overview

Overview

The Parthenon Fi Master Loan Agreement (MLA) template adapts the institutional legal framework pioneered by Wildcat Protocol for Parthenon's custody-native, fixed-rate model. The template was reviewed by Lindsey Girkin (former Wilkie Farr private credit attorney) and incorporates adaptations for tri-party custody, LTV-based collateral management, and ADGM/English law enforceability.

This page provides an overview of the MLA structure. The full template is available to institutional counterparties upon execution of NDA.

MLA Structure

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Section 1: Parties and Definitions

The MLA defines four named parties:

• Borrower: Entity borrowing against deposited collateral

• Lender: Identified by wallet address and verified through custodian CDD

• Custodian: Qualified custodian acting as collateral agent under the Account Control Agreement

• Platform: Parthenon Fi, operating matching infrastructure and credit lifecycle automation

This differs from bilateral MLA structures (used by protocols like Wildcat) by explicitly incorporating the custodian and platform as named parties with defined obligations.

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Section 2: Term Sheet

Each loan is documented by a Term Sheet specifying all parameters: settlement asset, principal, fixed rate, tenor, collateral type, LTV thresholds, cure period, custodian, LPT transferability, governing law, oracle source, and protocol fee.

All parameters are locked at origination. No unilateral adjustment by any party.

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Section 3: Loan Mechanics

Covers execution, interest accrual, repayment, collateral management, and margin call/liquidation procedures. Key differences from variable-rate DeFi protocols:

• Fixed rate locked for full tenor (no utilization-based adjustments)

• Custodian-mediated execution (collateral stays at custodian, principal settles via Canton atomic DvP)

• LTV-based margin calls with defined Cure Periods (replacing reserve-ratio delinquency mechanics)

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Section 4: Transfer of Title

Governs title transfer under the GMSLA model. Addresses digital-asset-specific considerations including airdrops, hard forks, and replacement tokens.

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Section 5: Representations and Warranties

Mutual, borrower-specific, and custodian-specific representations. Includes knowledge qualifiers on crypto-specific representations where absolute verification is impractical (e.g., beneficial ownership of wallet addresses).

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Section 6: Sanctions and Compliance

Sanctions screening enforced at custodian level (OFAC SDN, HMT, EU Consolidated Lists). Continuous monitoring via Chainalysis and TRM Labs. Sanctions designation during loan period triggers collateral freeze and regulatory cooperation.

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Section 7: Events of Default

Seven default triggers including payment default, margin call failure, representation breach, insolvency, sanctions designation, material adverse change, and custodian inability.

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Section 8: Remedies

Acceleration, custodian liquidation, close-out netting, and legal recourse. Custodian executes liquidation within 24 hours of instruction.

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Section 9: Limitation of Liability

Platform liability capped at the greater of $100,000 or 12-month fees, with gross negligence/willful misconduct carve-out. This reflects institutional expectations — significantly higher than the $1,000 caps common in DeFi.

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Section 10: Governing Law

Dual-track: England & Wales for ADGM counterparties (matching GMSLA), New York for US counterparties. Arbitration under LCIA or ADGM Arbitration Centre.

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Section 11: Loan Position Token Provisions

LPT issuance, encoding, transferability, and the legal effect of LPT transfer on MLA rights.

Key Adaptations from Wildcat

The MLA template adapts Wildcat Protocol's comprehensive legal framework with the following structural changes:

Dimension	Wildcat Approach	Parthenon Adaptation
Collateral	Smart contract-held	Custody-native (qualified custodians)
Rates	Variable, borrower-adjustable	Fixed at origination, non-adjustable
Default triggers	Reserve ratio + penalty APR	LTV-based margin calls + cure periods
Sanctions	On-chain escrow (Sentinel)	Custodian-level compliance enforcement
Liability cap	$1,000 or 12-month fees	$100,000 or 12-month fees
Parties	Bilateral (borrower + lender)	Multi-party (+ custodian + platform)
Governing law	Cayman Islands	England & Wales / ADGM