# Draft Transaction Nda Scenario 01 > Guides drafting of a bilateral M&A NDA from a precedent and negotiated term sheet where transaction-specific features and prior negotiations must be incorporated, together with a drafting notes memo. - Skill: `finchipaiorg/draft-transaction-nda-scenario-01` (Agent Skill) - Install (CLI): `npx skillmds@latest add finchipaiorg/draft-transaction-nda-scenario-01` - Raw SKILL.md: https://api.skillmd.com/api/skills/finchipaiorg/draft-transaction-nda-scenario-01/raw - Safety review: pending - Works with: Claude Code, Claude.ai, OpenAI Codex - Category: Coding & Dev Tools - Author: FinchipAIOrg (https://skillmd.com/u/finchipaiorg) - Updated: 2026-09-22 - Page: https://skillmd.com/skills/finchipaiorg/draft-transaction-nda-scenario-01 --- # Skill: Bilateral M&A NDA Drafting ## 1. Subject-matter triage - Treat the NDA as the primary deliverable and draft it first; do not rely on the notes memo as a substitute. - Confirm whether the transaction is truly bilateral; if both sides will exchange diligence, use symmetric confidentiality obligations unless the source materials clearly support asymmetry. - Identify whether the buyer profile creates special recipient issues: financing sources, co-investors, affiliates, investment vehicles, portfolio companies, advisers, and controlled entities may require tailored permitted-recipient language. - Determine whether the source set includes any standstill, exclusivity, no-shop, no-talk, or similar control-right restriction, and whether that restriction must be narrowed to preserve ordinary board fiduciary function. - Check whether any retention, backup, legal hold, regulatory recordkeeping, or reporting carve-outs are needed for return/destruction mechanics. - If the materials point to a residuals concept, decide whether it is appropriate for the transaction and, if so, define it narrowly enough to avoid implied license drift. ## 2. Failure modes the skill is correcting - The draft mirrors the precedent mechanically and misses negotiated deal points from the term sheet, deal memo, EOI, or CIM summary. - Party-specific language from the precedent is carried over even though it fits a different buyer or seller profile, especially around representatives, affiliates, and financing-related disclosures. - Standstill or similar restrictions are drafted too broadly and fail to account for board response rights, fiduciary constraints, or the intended bargaining posture. - Boilerplate confidentiality mechanics are left unharmonized, creating internal inconsistency across definition sections, disclosure exceptions, remedies, and survival provisions. - Return, destruction, and retention language is drafted without accounting for legal holds, archived systems, or required retention by advisers and financing sources. - The drafting notes memo merely summarizes the draft instead of explaining judgment calls, unresolved items, and why particular tradeoffs were selected. - The final work product omits a clear record of open issues for deal-team review, making later negotiation inefficient. ## 3. Legal frameworks / domain conventions that apply - Bilateral NDA convention: confidentiality, use restrictions, and disclosure exceptions should ordinarily run both ways in a due-diligence exchange. - Representative definitions should be tailored to the transaction party type and should match any express permitted-recipient categories elsewhere in the draft. - Need-to-know and purpose-limited use are the default transaction standard; any broader use right should be supported by the source materials and stated expressly. - Standstill, no-shop, and similar transfer/proposal restraints should be checked against applicable corporate-law fiduciary-duty principles and the board’s ability to consider superior proposals. - Return/destruction provisions should be drafted with customary carve-outs for backup copies, legal compliance, insurance, tax, audit, and litigation hold obligations where appropriate. - Residuals, if included, should be aligned with the deal context and should not override express confidentiality or use limits. - Governing law, venue, equitable relief, notice mechanics, and term/survival provisions should conform to the negotiated sources and internal consistency of the draft. - Drafting notes should function as a deal-team working memo, not a legal brief: it should record choices, open items, and dependencies on later negotiation. ## 4. Analytical scaffolds - Read all source materials together and extract every agreed substantive position before drafting any clause. - Start from the precedent, then map each provision to one of four buckets: keep, modify, delete, or add. - For each modified provision, confirm the change is reflected everywhere the concept appears, including defined terms, exceptions, remedies, and survival language. - Review the party structure and transaction context to ensure the recipient definition, affiliate language, and disclosure permissions match the buyer profile. - Test each standstill or proposal restriction against the intended deal process and any board-level flexibility preserved in the source set. - Identify all unresolved items, missing deal points, and judgment calls created by gaps in the source materials; record them explicitly in the notes. - Where the source materials are silent, default to market-consistent bilateral M&A NDA drafting, but flag the assumption in the notes. - Validate that the draft’s governing law, notice, term, and equitable-relief provisions are internally consistent and not accidentally inherited from the precedent without review. - Prepare the drafting notes provision by provision, stating the issue, the selected drafting response, and the reason it was chosen over plausible alternatives. ## 5. Vertical / structural / temporal relationships - Keep the operative NDA self-contained and coherent across definitions, operative covenants, exceptions, and boilerplate. - Ensure that any permitted-recipient carve-out is structurally consistent with the confidentiality and non-use clauses it qualifies. - Make the survival period, return/destruction obligations, and injunctive-relief language work together rather than conflict. - If exclusivity or standstill timing is included, tie it to the transaction timetable and any stated expiration or trigger in the source set. - If the agreement contemplates ongoing diligence over multiple rounds, preserve a consistent temporal framework for information sharing, disclosure approval, and obligation survival. - Do not let the notes memo introduce substantive language that is absent from or inconsistent with the NDA draft. ## 6. Output structure conventions - Produce two separate deliverables: a bilateral NDA draft and a drafting notes memorandum. - Draft the NDA in conventional transaction-document form with clean operative clauses, defined terms, and standard closing boilerplate appropriate to a bilateral M&A diligence agreement. - Draft the notes memo as an advisory document organized by provision or topic, not as a transcript of edits. - For each note, state the drafting choice, the open issue if any, and the practical effect on the deal process. - Include an explicit Recommended Actions section in the notes memo with concrete next steps, the responsible deal role, and timing tied to the transaction workflow. - Use plain, lawyerly drafting; avoid commentary inside the NDA except where a defined concept or carve-out requires it. - Keep the deliverables focused on operative drafting and review guidance, not on summarizing the source materials. - Confirm that the NDA file is complete and non-empty before treating the notes memo as done.