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PREPARING YOUR COMPANY FOR SALE
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Ken
    There's a saying that goes something like--You never know your company as well until the day you decide to sell it.  All of a sudden everything you've been doing, all of your business practices unfold.  Things you thought were happening, were not.  Practices you thought were in place, were not.  Contract issues, Central Station issues, Accounts Receivables issues, Attrition issues, Software issues, Financial issues etc. all rear their ugly heads.  And because of that, when we work with companies, many times the first few months are taken up with steps that need to be taken to make things right.  New Contracts may have to be sent out, Attrition (lost accounts) issues may have to be addressed, Phone line and Central Station policies may need changing, Financial Statements may need to be addressed and more. 
    It's like a realtor working with you who wants to get maximum dollars for your house.  They take a look at the outside and then every nook and cranny on the inside.  Then they come up with a list of items the homeowner has to address if they expect to get maximum value.  That's why it's important to work with someone who can help you with all that.  You have a business to run and can't tell your employees that you are planning to sell.  Hence you have no one to help nor do you have the time to put everything together for the potential buyers.  That's where people like us come into play.
    Newer software programs in the industry are helping tremendously where, as long as inputted properly, can help in each one of these areas.  But don't make the mistake of thinking you can do this on your own and save some money.  You'll spend it and then some on lost productivity and finding out somewhere down the road that you're missing vital information.
    Another good saying here--Don't be penny wise and pound foolish.  If you're considering selling or just looking for a valuation, that's what companies like ours do.  A conversation is a good start.
Steve Rubin                                                                                                                                       Davis Mergers and Acquisitions Group, Inc.
847 550 1557
srubin@graybeardsrus.com
www.graybeardsrus.com
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VOIP AND FIRE FROM MARCH 5, 2016 ARTICLE
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Ken
    With regards to fire and voip question, I’m not an expert, but went through this process with the fire marshal during a fire alarm installation at one of my health center buildings in Manhattan. The real issue was with the Time Warner modem, where you can wire a small number of phone lines to them. Their concern was with regard to backup power time of the battery in the commercial modem. The battery has to last 12hrs (it may have been 8hrs) if I remember correctly. The Marshal issued us a memo to this effect and we confirmed that the particular model for the modem did indeed meet the specification. The Marshal did prefer Verizon FiOS as they provide power from their external hub from the curb to through distribution. However, they were satisfied with the specifications from the Time Warner modem battery life. We had Time Warner provide the spec document and we proceeded with the connection and passed inspection.
Regards,
Michael Serrano, M.Sc., President / CEO
Briteway Security Systems
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MORE ON LEASING AND LIQUIDATED DAMAGES FROM MARCH 9, 2016 ARTICLE
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Ken,
    This addresses the following questions posed by “Now known to a few” and formally “Right to the point”, which you sent out on March 9th:
    “Ken,
    Based upon Mr. Kleinmans analogy that you are providing a service, then how can you sue for liquidated damages or the balance of the agreement if the subscriber decides to stop the services?   There would be no loss if you were no longer providing such services, right?   Will the next argument be based on anticipating profits from the relationship for the extent of the agreement or to recoup the installation costs that was done at a loss?   How is this any different than a service agreement based upon services that you will be providing but have not done so yet?”

    At the outset, please note that during  a telephone conversation with Ken, HE asked ME to write this instead of just doing it himself.  Probably two reasons for that.  First, he has already done it in the past, and second, he probably wants to see if I get more grief.
    Well, to get “right to the point”… in the portion of the inquiry highlighted above in red, the writer actually provided the answer. It is no longer an argument- it is a fact.  Liquidated damage clauses are relied upon and legally enforceable in contracts where damages would otherwise be difficult or impossible to calculate. 
    Take a typical alarm service contract.  If the customer affirmatively cancels or is terminated for non-payment before the end of the contract term, should the alarm company just walk away because it isn’t going to give any future services?  Of course not.  The alarm company was ready willing and able to perform had the customer not breached.  In these cases it is the customer’s own fault he is on the hook for the balance.  So, what are the damages?  You could make the argument that the entire balance would be due because you probably will not save on any expenses for the ongoing service which will not be provided.  Are you going to cut any payroll as a result? No (unless the contract was for some mega dollars).  Same goes for companies with their own central station (although dealers who use a third party monitoring station would have some small savings to offset).  But realistically, you can’t be expected to go through all your accounts and figure out how much the ongoing service actually costs for each particular one.  Therefore, as long as reasonable, the liquidated damages clauses in our contracts  will be the practical and enforceable measure (and yes, 75% or even 90% have been held to be reasonable)
    Indeed, were it not for the enforceability of these clauses, Ken might be out of the collection business since you would be unable to collect on your contracts! (an interesting thought?)
Seriously, all of the case law supporting our industry and in particular the liquidated damage clauses in our contracts goes back to the underlying principle that the written agreement between contracting parties controls their relationship.
    The two principle examples we can personally cite both ended up with favorable wording in appellate courts.  In AFA Protective Systems, Inc. v. Lincoln Savings Bank, FSB, 194 A.D.2d 509 (2d Dep’t 1993), the court  stated “It is settled that when parties set down their agreement in a clear, complete document, their writing should as a rule be enforced according to its terms. Evidence outside the four corners of the document as to what was really intended but unstated or misstated is generally inadmissible to add to or vary the writing. In the instant case, the 1990 contract clearly does not contain a provision for termination on any anniversary date and unequivocally provides for liquidated damages in the event of the defendant's breach.”
    Just last year, we obtained a similar result in AFA Protective Systems, Inc. v. Orange Regional Medical Center, 128 AD3d 869 (2d Dep’t 2015)  Once again, the court held: “Contracts are to be construed as the parties intended. When the contract is in writing, the best evidence of what the parties intended is what they said in that writing.  Thus, a written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms.  In support of its motion for summary judgment, AFA submitted the contract, which clearly stated that it was for an initial five-year term, but could be terminated by either party thereafter. AFA also submitted evidence that it had performed its obligations under the contract, that ORMC breached the contract by prematurely terminating it, and that the contract itself provided for the measure of damages.”
    Look at Ken’s website and you find many more.  So that’s the story.
Robert Kleinman, Chief Executive Officer and General Counsel
AFA Protective Systems, Inc
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