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Agreements you'll see when selling or buying alarm accounts - engaging counsel / comments on Alarmnet
July 9, 2018
Agreements you'll see when selling or buying alarm accounts - engaging counsel
          Starting today and the next few articles I am going to acquaint you with the various documents you can expect to see when you are selling your alarm company or buying an alarm company or its assets.  I'm going to review them in the order I think you will, or should, see them.
          We start with the engagement letter with counsel.  Why counsel?  Why not the broker's agreement or the Letter of Intent from a buyer?  You start with the attorney because it's the attorney's job to make sure you understand the terms of each agreement that you will be presented with.  If you come to the attorney after you've signed the agreement with the broker then you may find out that you've locked yourself in and committed yourself to the broker in ways that you didn't understand or intend.  
          The attorney engagement letter should be simple and straight forward.  You will be agreeing to pay for the time spent on the matter.  The hourly rate should be specified so you understand it.  While you can ask for a ballpark number to handle the transaction, remember that it's only an estimate.
          Should you lock in a flat fee?  Not if you want to be properly represented.  How would you like to give a firm installation price on a building you haven't seen?  How would you be handling the job when you locked yourself in for a $1500 installation and during the job figured out it was going to cost you $4000?  You may think your "deal" is simple and going to be smooth, but it doesn't always [or often] turn out that way.  
          Could it be that your lawyer is the problem, the one dragging out the deal or complicating the deal?  Damn right it could be, and you can blame yourself for selecting that lawyer.  You didn't do yourself any favors using Uncle Vinnie.  Your deal won't likely turn out like in the movie with a happy ending.  
          I'll spare you the suspense of waiting until the end of this article.  Obviously I think you're better off engaging the Merger and Acquisition lawyers at Kirschenbaum & Kirschenbaum. Handling alarm transactions is something we are expert in, familiar with, comfortable with and efficient with. But, more importantly, it's not all we do.  We draw on our experience in many other matters, such as litigation issues, to round out our advice and guide you.  And, if it comes to a dispute, we will be there to represent and protect your interests. Will that better service be more or less expensive than someone else?  Should be close to the same.  We don't make problems and we know how to avoid them.  Follow our advice and there won't be problems.  
          The attorney engagement letter should therefore be based on fee for services. You can terminate the engagement at any time and owe only what's due as of the termination date.  You should expect to receive monthly statements so that you are not surprised with a huge bill at the end of the deal.  You should expect one, no more than two, attorneys working on the deal.  
          If your deal involves a bank or finance company expect the fees to be higher. 
          You should be able to get guidance from the attorney, but business decisions are really within your discretion.  At K&K we help structure the deal and let you know when demands are being made that make no sense or are too risky.  More importantly, we can tell you when demands are outside the norm, and that's important.  If you are dealing with one of the industry "buyers" they are often rigid in their deals.  Some of them have a set of papers and try to do every deal the same so that they don't have legal costs on their end.  Trouble with that is that, like the kid's game "telephone', as slight changes are made in deal after deal, by the time it gets to your deal there are provisions that make no sense, and certainly don't make sense to you and your deal.  If your counsel isn't experienced he or she won't know the difference and will defer to the aggressive "we don't make changes" approach of the buyer and its counsel.  You need counsel who even they will listen to when objections are raised.  
      Call the Merger and Acquisition team at Kirschenbaum & Kirschenbaum first thing. We will guide you through the entire transaction and be there for you before, during and after the transaction. Call me any time, or if you want someone more sophisticated, call Jennifer Kirschenbaum,Esq at 516 747 6700 x 302 [she heads our Transactional Department]. 
comments on Alarmnet from July 2, 2018 article
          In response to “Not from NJ and glad,” I would have to guess that this guy still uses a POTS Line for signal reporting for all of his customers.  Many of my customers have cellular communicators, but no access to a POTS line for dual path reporting and the system router is just too far from the cellular communicator to accommodate dual path reporting.
          Secondly, I take umbrage with his incorrect assumption that my installations have problems that need repair.  If he used Honeywell and Total Connect, he would know that any system without dual path will have overages almost monthly.
          Thirdly, I guess guy just wants to price himself out of the market.  I set up what I found to be a fair price to charge my customers.  I have only increased my monitoring rates, when my costs have increased.  I use your contracts, so of course there are provisions for increases.  And with so many of these DIY panels making an incursion into the market, who in their right mind wants to raise prices?  I used the Alarmnet price increase to allow me to increase my monitoring fees.  I have always told my customers I only raise fees when my costs go up. 
          Fourth, Speed of signals is irrelevant?  This clown must live in a state where marijuana is legal.  Try connecting to a demo panel via Total Connect and either have the app timeout, or it just goes so painfully slow that I have had customers make comments like maybe I should just drive home and arm my system manually.  Transversely, with Alarm.Com, you send an arming or disarming signal and it gets processed and the system takes the command almost instantly.  I’m thinking that Mr. Not from NJ & glad must use an Ademco 1005 control as a demo panel.  I wonder where he buys those big dry cells to power the alarm circuit.
          It is obvious to me that Mr. Not from NJ & Glad is a crap stirring clown. When a dealer posts something on your blog (such as myself) I don’t write this stuff to see my own rant in print. Also, I think that someone from Honeywell is reading this stuff too.  If they aren’t paying attention to the ups and downs of the market, they will surely not be in business too long.  This jackass has the nerve to call me small minded?  I’m trying to look out for my company and for the other alarm dealers in the industry.  I guess he doesn’t have much to do with customer service.  If no one ever complains, then you can only assume that you are doing a good job. 
As Always,
John from New Jersey
          re Dealers unhappy with Alarmnet overages and the rate increase.   Count us as one more unhappy dealer.
J. Kevin Larche, Chief Financial Officer
Alarm New England / Sonitrol New England / Voice New England
Rocky Hill, CT

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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
516 747 6700