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More on Rider for central station dealer agreement 
September 30, 2020
More on Rider for central station dealer agreement from article on September 23, 2020
            The September 23, 2020 newsletter discussed the CS Dealer Rider. This might timely to me as I am involved in discussions with a Central Station which I have never dealt with before. At the moment I am not looking to transfer any existing accounts to this new station but I am looking towards them for a new service which I hope to offer.     
            The Central Station is not offering me any enticement or discount or offering to attract me and there is no contract for term as all accounts will be a month to month agreement as will my product offering to the end user. I see nothing that will indebt me to them. It is simply a deal that if it works - it is expected to be profitable to both of us. If it does not work and the accounts do not "Stick" no one loses in our agreement with the CS. The CS will be paid month to month on an auto payment for any active accounts.      
            I read your newsletter regularly and on recently on Aug 19, 2020 your newsletter discussed the UCC-1 and noted:     
            The Commercial All in One acts as your Security Agreement.  You “perfect” your security interest by filing a UCC-1with your Department of State [filing may be on local level in your jurisdiction].  The extent of your security interest is defined in your Commercial All in One.  Older forms claimed a security interest on all assets of the subscriber. While the discussion was not about the CS agreement you indicated:  More recent versions of the Commercial All in One provide for a security interest in the equipment you installed.      
            I see the point of the UCC-1 and It is something we include in all of our agreements for installation and extended service agreements although we have never filed a UCC-1.    
            This Central Station also uses agreements from your office and in the dealer agreement I see:      
            SECURITY INTEREST : In order to secure all indebtedness or liability of DEALER to CS, DEALER hereby grants and conveys to CS a security interest in, and mortgages to CS all of DEALER’s equipment, inventory and proceeds thereof, accounts receivables, SUBSCRIBER contracts and cash on hand. CS is authorized to execute and file a UCC-1 statement. DEALER assigns to CS all SUBSCRIBERS’ recurring revenue payable to DEALER which DEALER agrees to collect and treat as trust funds to be turned over to CS for the payment of all obligations owed by DEALER to CS.    
            I am unaware what is included in the CS Dealer Rider but I do feel that the security interest clause in the CS agreement is over the top for the central station to ask for this as there is no significant indebtedness to be created except for a few dollars per month for the CS accounts. They are not offering 6 months free or any such attraction and I am not asking for any.    
            Should I accept this security interest UCC as a dealer for CS – Does the CS rider address this??   
I prefer to remain 
            The Standard Form Dealer Agreement is, of course, over the top; I wrote it for the central stations.  Unlike others drafting contracts for the central station I do provide some protection for the dealers.
            A dealer certainly has to review the Dealer Agreement and address issues that may not apply to its particular deal. The contract between central station and dealer is one of the most important, and influential, contracts a dealer signs. It would be foolish to think that such an agreement works for every dealer.  A central station that is inflexible with the agreement is probably unreasonable, though you have to understand that from the central station's perspective this is not a unique contract, but one used with all  customers; sort of like the dealer using the Standard Form Agreements with its subscribers; some deals warrant contract modification and others don't.  The modifications offered and how much time a dealer wants to spend negotiating with a subscriber over the contract terms depends on the subscriber.  Central stations have the same evaluation to make:  how important is the dealer?  Sure most central stations will say that all its dealers are important, and I am sure they are, but a dealer with 100 accounts just isn't on the same playing field as a dealer with 4000 accounts.  
            You make good points about the Dealer Agreement security provision, as it pertains to your deal.  You receive no incentive to come to the central station.  Maybe you are doing the data input so the central station has even less upfront cost setting up your accounts.  You intend to provide a credit card to pay your monthly charges, which will undoubtedly be charged in advance by the central station.  Thus you may be a good credit risk; collateral to secure your obligation may not be required.
            Not all dealers have this arrangement with the central station.  Some dealers receive sizable incentives to come to the central station, including up-front cash or reduced or no monitoring charges for a period of time.  The central station has an investment in this dealer.  Also not all dealers provide credit cards and not all dealers pay their bills timely; large debt is sometimes incurred and central stations are left holding the bag and having to chase the dealer.  A security interest in the alarm accounts might be useful in this circumstance.
            Since the central station Dealer Agreement is one of the most important contracts a dealer will sign it makes sense that the contract be reviewed by counsel.  Yes, I can review it for the dealer even if I provided the form to the central station.
            But the Rider I offer to dealers is a bit different.  Every dealer needs the Rider.  Even if you have a Dealer Agreement that addresses all of the issues raised in the Rider, the Rider terms will make those terms crystal clear.  Central stations using the Standard Form Dealer Agreement, unaltered or modified, will have the most transparent Dealer Agreement.  But even those should have the Rider added.  Word to the wise, though I do understand that, unlike a horse, you can hand a thirsty man a glass of water, but can't make him drink.  
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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