Draft Subscription Agreement

Skill: Draft Subscription Agreement for Public Pension Plan Investor with Issues Memo

1. Subject-matter triage

• Treat the subscription agreement as the primary deliverable and draft it first; do not let the issues memo substitute for operative contract language.
• Confirm the investor is a public pension plan or other governmental plan before drafting investor-status provisions; if the record does not clearly support that status, flag the classification issue rather than guessing.
• Identify whether the investment package contains governing-body approvals, policy exceptions, tax forms, organizational expense materials, and any side letters or ancillary commitments that may interact with the subscription package.
• If only one investor is in scope, state that affirmatively and analyze that investor only; do not import assumptions from other fund subscriptions.

2. Failure modes the skill is correcting

• Template investor representations are carried over from a different investor type, producing inaccurate provisions for a governmental plan and misdescribing the investor’s regulatory posture.
• Tax provisions are written as though the investor were a non-U.S. or other differently situated investor, rather than a domestic tax-exempt governmental plan.
• Governing-body authorization is assumed instead of checked, leaving unresolved whether the commitment amount and any policy exception were actually approved.
• The initial capital call or organizational expense language is accepted without checking the source figures against the stated commitment mechanics.
• The issues memo describes problems but does not separate them by severity, tie them to source documents, or tell the reader what to do next.
• Cross-document inconsistencies are noticed in the abstract but not linked to the exact clause, schedule, or approval material that creates the conflict.

3. Legal frameworks / domain conventions that apply

• Governmental plan status: Draft representations consistent with governmental-plan treatment under the applicable benefits framework. Do not use private-plan fiduciary, plan-asset, or prohibited-transaction framing unless the source materials specifically call for it.
• Domestic tax-exempt investor treatment: Use tax representations and covenants suited to a domestic tax-exempt pension investor, including the relevant UBTI-oriented framing where appropriate, rather than non-U.S. investor concepts that do not match the investor’s status.
• Investment authority and mandate compliance: Include representations that the investor has legal capacity, internal authority, and governing approval to subscribe; that the commitment fits within applicable mandate or policy limits; and that execution is within the investor’s powers under applicable law.
• Governance approvals: If the commitment is near a policy ceiling or depends on an exception, the agreement should not imply approval that is not evidenced. The memo should flag missing or ambiguous authorization materials.
• Capital call mechanics: The subscription package may call for an initial funding amount that combines organizational expense participation and first draw mechanics. Draft only what the source materials support and verify any stated amount against the stated formula and source figures.
• Document hierarchy: When the fund’s constitutional documents, subscription forms, approvals, and tax certificates speak to the same point, reconcile them using the most specific and most recent source, then flag any remaining mismatch.

4. Analytical scaffolds

• Step 1 — Confirm investor category. Identify the investor’s status from the source materials and map it to the correct regulatory and tax treatment.
• Step 2 — Draft status-based representations. Align the investor representations, acknowledgments, and tax provisions with that category; omit concepts that belong to a different investor class.
• Step 3 — Test authorization sufficiency. Read the board, committee, officer, or delegate approvals against the actual commitment and any policy exception. If the approval language is incomplete or conditional, capture the gap.
• Step 4 — Check amount mechanics. Compare the subscription mechanics, commitment amount, and any initial call or expense-sharing language against the source calculations and cited figures.
• Step 5 — Reconcile cross-document conflicts. Compare the subscription agreement against the fund formation documents, approval materials, and ancillary forms to identify mismatches in defined terms, economics, investor status, authority, or timing.
• Step 6 — Build the issues memo. Present each issue as a discrete entry with a severity label, the source conflict, the practical effect, and the action needed before execution.
• Step 7 — Preserve drafting neutrality. Where the record is incomplete, draft conservatively and point the unresolved point into the issues memo rather than papering it over in the agreement.

5. Vertical / structural / temporal relationships

• The subscription agreement should track the hierarchy of fund documents and investor-side approvals, so that representations do not outrun the authority actually granted.
• Time-sensitive items should be organized around signing, closing, funding, and any pre-closing condition or delivery deadline stated in the source documents.
• If the source package contains multiple investor-side documents, compare them in the order that controls execution: approval authority, subscription form, tax certifications, then ancillary investor letters or elections.
• Where a mismatch affects closing timing, treat it as a live execution issue, not merely a drafting preference.

6. Output structure conventions

• Produce two completed deliverables: the executed-form subscription agreement first, then the issues memorandum.
• The subscription agreement should read like a working contract, not a commentary, checklist, or summary of points to be resolved.
• Use ordinary subscription-agreement conventions: parties, investment commitment, investor representations, fund representations if supported, subscription mechanics, transfer or assignment limits if applicable, tax matters, authority, notices, confidentiality if relevant, and signature blocks.
• Draft investor representations in a manner tailored to a governmental plan investor and avoid provisions that presuppose ERISA-covered private plans or non-U.S. investor status unless the source materials require them.
• The issues memorandum should be organized by discrete issue, and each issue entry should include:
  • a short issue title,
  • a severity label using a defined ordinal scale,
  • the source documents implicated,
  • why the inconsistency matters,
  • and the recommended fix.
• Define the severity scale once at the top of the memo and apply it consistently.
• Include an explicit Recommended Actions section at the end of the memo with imperative action items, the responsible role, and a timing anchor tied to signing or closing.
• When legal propositions are stated in either deliverable, anchor them to the controlling authority or governing document language rather than using unsupported conclusory phrasing.
• Do not rely on formatting alone to communicate changes or issues; make the substantive point clear in the text itself.