Agreements you'll see when selling or buying alarm accounts – Non-Disclosure Agreement / more on Honeywell July 11, 2018

Agreements you'll see when selling or buying alarm accounts – Non-Disclosure Agreement / more on Honeywell
July 11, 2018
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          This is the third article in this series on agreements you should be familiar with when buying or selling alarm accounts or alarm business.  We’ve covered the agreement with your attorney and the agreement with the broker.  
          Next step is the broker starting to introduce potential buyers to the seller. The agreement that you need at this point can be confusing because you need a Non-Disclosure Agreement and the broker and potential buyer may be presenting you with an Exclusivity Agreement instead, trying [knowingly or more than likely not even realizing it] to pass the Exclusivity Agreement as a Non-Disclosure Agreement.  The Exclusivity Agreement will be covered tomorrow because it’s not the next agreement you need.  The Non-Disclosure Agreement is what you need. [Note:  A Non-Disclosure Agreement is one of the Standardize Forms you can get at www.alarmcontracts.com]. 
          A seller requires a Non-Disclosure Agreement, NDA, because seller will be revealing all of its confidential and proprietary information and data to a potential buyer; at some point introducing the potential buyer to the seller’s employees, professionals, vendors and even customers.  It makes sense that the potential buyer would agree to maintain this information confidentially, to be used solely to evaluate whether there is interest in a deal, and for no other purpose.  
          The NDA will have several restrictive provisions prohibiting the buyer from using the information. It will have severe penalties if that information is used. A seller should insist on using its NDA, not one provided by a broker and certainly not one provided by a potential buyer.  Get and use your own NDA; it’s designed to protect you, period.  And that’s what is necessary and appropriate.  If the buyer doesn’t want to sign it as is, tell them to look elsewhere.  If the buyer can’t agree to keep your data and information confidential then you shouldn’t be giving any information, and if the buyer is giving you so much trouble at this stage of the transaction just imagine what you’re in store for when you get to the Contract of Sale.
     Not all NDAs read the same.  In fact the Standard NDA I offer has restrictive provisions I have not seen in other NDAs.  You need the protection. 
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more on Honeywell 
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Ken 
    As always, very informative. Now let’s tell everyone why Honeywell plays the "Kit Game". 
    They made agreement with very large alarm companies (ADT) to give them the "BEST PRICE" on individual items. So to remain competitive while being bent over by ADT, they created the "KIT", a purchasing and inventory nightmare causing us all to answer to our customers regarding internet pricing. 
pd 
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