NDA template reference — the 8-article structure, customization points, and red flags.

The educational point of this piece is to make a buyer-drafted NDA legible to the seller. Sellers who can read an NDA article-by-article are sellers who can spot when a clause has been weakened, when a definition has been narrowed, or when a residuals clause has been smuggled in. Sellers who cannot are signing trust documents — and trust is the wrong currency for the first transactional document in a deal.

§ 01 · The eight standard articlesWhat each one does.

Article 1 — Definition of Confidential Information. Establishes a broad definition of what is protected: client lists and account information, financial statements and commission data, business plans and marketing strategies, carrier relationships and contingency arrangements, employee information and organizational structure, trade secrets, and anything else designated as confidential by the disclosing party. Standard exclusions cover information already public, already possessed by the buyer, received from a third party without confidentiality obligation, or independently developed.

Article 2 — No Obligation to Disclose. Clarifies that nothing in the NDA compels the seller to disclose any particular information. The seller retains complete discretion over what is shared.

Article 3 — Non-Disclosure and Non-Use. The load-bearing article. Strict confidence required. No third-party disclosure without written consent. Internal disclosure limited to need-to-know basis. All recipients bound by equivalent obligations. Non-use restriction prohibits any purpose other than evaluating the transaction. Return/destruction requirement upon request or termination — including derivative works.

Article 4 — Acknowledgment of Rights. Confidential information remains the property of the disclosing party. No license is granted. No warranty of accuracy is made.

Article 5 — Non-Solicitation. One-year prohibition (extendable to two) on soliciting clients, recruiting employees, or disrupting carrier/vendor relationships. Survives termination of discussions. Covers both direct and indirect solicitation.

Article 6 — Indemnification. Buyer indemnifies the seller for all damages from breach of the NDA, including attorney's fees and court costs.

Article 7 — Venue and Jurisdiction. Governing law is the seller's home state. Injunctive relief explicitly available. Optional binding arbitration under American Arbitration Association rules as an alternative to litigation. Venue established in the seller's home state.

Article 8 — Miscellaneous. Standard contract provisions — entire agreement, amendment requirements, waiver, severability, assignment restrictions, notices, counterparts, term (standard 3 years).

§ 02 · Six key customization pointsThe dials the seller can turn.

Most NDAs are built from the same eight-article skeleton. The customization happens at the dials. Six matter most.

Non-Solicitation Period. Standard is 1 year. Extend to 2 years if the buyer is a direct competitor or operates in a related market. Geographic Scope. None specified by default. Add geographic limitations if the agency operates in limited territories. Governing Law. Always the seller's home state for enforcement advantage. Dispute Resolution. Arbitration is faster, more confidential, less expensive than litigation; litigation creates public records. NDA Term. Standard 3 years from execution. Extend to 5–10 years for highly sensitive information or trade secrets. Confidential Information Definition. Default is broad (seven categories). Narrow only when the buyer has legitimate, documented objections — not just because they asked.

§ 03 · The red-flag checklistWhat to flag in any buyer draft.

Before signing, run the buyer's draft against these eleven red-flag conditions. Each one signals either a structural issue or buyer intent worth examining.

Sharing confidential information before NDA is fully executed — this violates the gateway protocol. Receiving party lacks authority to sign — verify signatory authority before execution. No copy of executed NDA retained by the seller with timestamp — create a file with execution date. No tracking of what information was shared, to whom, and when — maintain a disclosure log. NDA contains a residuals clause allowing use of "unaided memory" — reject outright. Non-solicitation period less than 12 months from termination — extend if possible. NDA term less than 3 years — extend for sensitive information. Governing law in the buyer's home state instead of the seller's — insist on seller's jurisdiction. No injunctive-relief language — ensure this remedy is explicitly available. No return/destruction requirement or certification — add if missing. NDA does not bind the buyer's advisors, lenders, or other parties receiving information — ensure all recipients are covered.

§ 04 · Where customization meets attorney reviewThe line not to cross.

The customization points above are dials the seller can think through and propose. The drafting itself — the precise language that turns "non-solicitation should be 24 months" into enforceable contract text — is attorney work. The educational point of this reference is to let the seller bring an informed position to the attorney meeting, not to write the NDA. Sellers who arrive at the attorney's office knowing the six dials and the eleven red flags get a sharper, faster document than sellers who arrive blank.

The standard term language — 3 years from execution — is sometimes negotiable upward. Standard non-solicitation language — 1 year covering clients, employees, and carriers — is sometimes negotiable to 2 years for direct competitors. The buyer's draft is the start of a negotiation, not the end. The seller's attorney does the redlining; the seller's preparation determines what gets redlined.

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