Draft Side Letter Mfns

---
name: draft-side-letter-mfns
task_id: funds-asset-management/draft-side-letter-mfns
description: Draft side letters for multiple investors at a fund closing, produce a campaign summary memo with MFN cascade analysis, and prepare an MFN disclosure schedule. The task requires distinguishing MFN-eligible provisions from carved-out provisions and resolving investor-specific issues using the governing side-letter policy and the fund’s operating documents.
activates_for: [planner, solver, checker]
---

# Skill: Draft Side Letters with MFN Cascade Analysis

## 1. Subject-matter triage

- Treat the side letters as the primary deliverable and the memo and disclosure schedule as support deliverables.
- Start by identifying the universe of LPs, the request letters applicable to each LP, the governing fund documents, and the side-letter policy.
- Determine which requested provisions are truly investor-specific, which are duplicative across LPs, and which are candidates for MFN treatment.
- Separate drafting work from analysis work: the side letters should reflect the final approved position, while the memo should explain how each request was treated and why.
- If any requested term appears to affect fund-level economics, allocation mechanics, or investment-process flexibility, analyze it as a policy and cascade issue rather than only as a drafting edit.

## 2. Failure modes the skill is correcting

- The drafter merges all LP requests into one generic treatment and loses investor-by-investor distinctions.
- MFN scope is treated as a formality, causing in-scope items and carved-out items to be mixed in the disclosure schedule.
- Side letters omit basic transactional completeness, such as consistent dates, governing law, defined parties, recitals, and signature blocks.
- The campaign memo describes requests at a high level but does not tie each one back to the governing policy, the operating documents, and prior-fund practice.
- Cross-LP conflicts are not resolved as conflicts; competing requests are drafted as though they can all be granted without adjustment.
- Above-policy requests are buried in the draft rather than flagged for decision.
- The MFN cascade analysis is not usable because it does not trace which granted provisions could be elected by which other LPs.

## 3. Legal frameworks / domain conventions that apply

- **Side-letter hierarchy:** The fund LPA, subscription materials, and side-letter policy control the outer bounds of what can be granted; side letters should conform to those documents rather than silently override them.
- **MFN scope:** Only provisions within the applicable MFN clause can be carried into another LP’s election set. Carve-outs should be treated as excluded unless the governing documents clearly say otherwise.
- **Policy compliance:** Where the policy allows a request, draft it cleanly and narrowly; where the request exceeds policy, identify the excess and decide whether to recommend rejection, narrowing, or a special approval path.
- **Investor-specific accommodations:** Regulatory, tax, governance, and status-based accommodations often justify narrow drafting, but the memo should distinguish true accommodation from a commercially negotiated enhancement.
- **Cross-LP consistency:** If more than one LP seeks the same exclusive or first-priority treatment, the documents and memo should resolve the conflict using a defined allocation or sequencing logic rather than assuming parallel effectiveness.
- **Formal completeness:** Each side letter should read as a standalone agreement with defined parties, date, recitals, operative provisions, governing law, counterparts if needed, and signature blocks.
- **Controlling authority:** For every legal proposition relied on, anchor the analysis to the governing fund documents, the side-letter policy, and any cited market or prior-fund authority in the source set; do not state a treatment as settled without naming the controlling document or rule.

## 4. Analytical scaffolds

- **Step 1 — Enumerate the LP set.** List each investor separately before analysis so each request package and each MFN consequence can be tracked without collapsing multiple parties into one pass.
- **Step 2 — Build a request matrix.** For each LP, map each requested provision to: policy status, MFN status, prior-fund support, and any known conflict with another LP’s request.
- **Step 3 — Classify each request.** Distinguish: within-policy and grantable; within-policy but needs narrowing; outside-policy but potentially supportable by precedent; and outside-policy with no support.
- **Step 4 — Resolve conflicts and sensitivities.** For competing co-investment, fee, reporting, excuse, tax, or governance requests, identify the clash and select a workable drafting or sequencing solution.
- **Step 5 — Draft the side letters.** Translate the approved position into clean agreement language for each LP, preserving internal consistency with the LPA and policy.
- **Step 6 — Prepare the campaign summary memo.** Organize by LP, then by request, and explain the decision path, the policy fit, the precedent fit, the MFN consequence, and any remaining open issue.
- **Step 7 — Build the MFN cascade.** For each LP with MFN rights, identify every in-scope provision granted to another LP that could be elected, and exclude carved-out items from the election universe.
- **Step 8 — Produce the disclosure schedule.** Make the schedule readable by provision category and grantor LP so a recipient can determine what is available for election without reverse-engineering the side letters.

## 5. Vertical / structural / temporal relationships

- Track the campaign as a sequence: request intake, policy screen, draft position, cross-LP reconciliation, final side-letter execution, then MFN disclosure.
- Treat later-granted provisions as potentially cascading into earlier LPs only to the extent the MFN clause and timing mechanics allow.
- Where the same subject matter appears across multiple LPs, preserve the difference between a broad form right, a narrow carve-out, and a one-off negotiated exception.
- If the fund documents or policy create timing windows for notice or election, reflect those windows in the memo and align the disclosure schedule to the relevant closing or delivery sequence.
- If an accommodation depends on status, activity, or investment type, make the condition explicit so the right does not expand beyond the intended vertical slice of the fund’s activity.

## 6. Output structure conventions

- **Primary deliverable first:** draft the side letters first, and only then prepare the memo and MFN disclosure schedule.
- **Side letters document:** include one section per LP, with the approved business terms, consistent formal opening and closing language, governing law, and signature blocks for the GP and the LP.
- **Campaign summary memo:** use a company-campaign structure that runs LP by LP, then closes with a concise MFN cascade analysis and a list of open items or recommended approvals.
- **MFN disclosure schedule:** organize by LP recipient and provision category, showing only provisions that fall within MFN scope and clearly omitting carved-out items.
- Keep drafting language operational, not descriptive: the documents should contain the operative clauses, not summaries of what the clauses would say.
- Before finishing, confirm that `side-letters.docx`, `campaign-summary-memo.docx`, and `mfn-disclosure-schedule.docx` are each populated with substantive content rather than placeholders or narrative-only descriptions.