KEN KIRSCHENBAUM, ESQ ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE You can read all of our articles on our website. Having trouble getting our emails? Change your spam controls and whitelist ken@kirschenbaumesq.com ****************************** Sellers representations re the cs lines Part 5 May 6, 2025 ******************* Sellers representations re the cs lines Part 5 ****************** I can often gauge the sophistication of a buyer's "alarm lawyer" when I see the buy sell agreement form they present and the representations they require from the seller. One of the common representations demanded of the seller is that "the seller owns the lines over which signals are transmitted to the central station". That statement, I will go out on limb and say 99% of the time, is false; inaccurate; would constitute a misrepresentation. Why? Ask the central station who owns the lines; it's the central station in most cases, and before we get ahead of ourselves, that the appropriate party to own the lines. What dealers need to do is get an agreement from the central station that the cs will assign and transfer the lines upon request, usually to another central station. Effectively the dealer can transfer the lines to another central station, which is what the buyer of the accounts apparently wants to do [another article on that issue is needed]. So the representation that should be asked for is that the dealer has its monitored accounts on segregated lines that can be moved. Even that representation should be unnecessary because if the buyer is going into contract for the accounts it should have already verified to its satisfaction that whether the accounts are segregated and able to be moved. Another issue that comes up is a representation that all monitored accounts are alarm.com accounts. That permits the accounts to be re-directed to another central station [I think - alarm.com can confirm that] which is a major benefit to alarm.com dealers. Napco may work the same way; not sure. Sellers and even buyers need to be careful making representations in the sale agreement. it's common that the representations demanded are well beyond the information a seller has and almost without exception the buyer should have been able to determine the answer during due diligence. Indeed it would be foolhardy for a buyer to skip the due diligence and decide to just rely on the representations by the seller. Some of those seller representations may be good only until you can't see the tail lights on their car as they leave the closing. What's the point of the lengthy buy sell agreement and unreasonable demands other than to drive up the legal fees and delay the closing? I don't see any other point. Buyer have responsibilities to perform due diligence, sometimes a tedious task, but those sellers who don't have easily reviewed records and smooth operations are hardly the ones in a position to make the representations and relying on those representations is crazy unless the goal is to get into litigation after the closing. Try and find your transactional lawyer then. ******************** STANDARD FORM AGREEMENTS: To order up to date Standard Form Alarm / Security / Fire and related Agreements click here: www.alarmcontracts.com *************************** CONCIERGE LAWYER SERVICE PROGRAM FOR THE ALARM INDUSTRY - You can check out the program and sign up here: https://www.kirschenbaumesq.com/page/concierge or contact our Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304. *********************** WEBINARS: https://www.kirschenbaumesq.com/page/alarm-webinars *********************** ALARM ARTICLES: You can always read our Articles on our website at www.kirschenbaumesq.com/page/alarm-articles updated daily ******************** Wondering how much your alarm company is worth? Click here: https://www.kirschenbaumesq.com/page/what-is-my-alarm-company-worth *********************** THE ALARM EXCHANGE - the alarm industries leading classified and business exchange - updated daily ************************* PODCASTS: https://podcasts.apple.com/us/podcast/ken-kirschenbaum-presents/id1794851477 ************************* Getting on our email list / Articles archived: Many of you are forwarding these emails to friends or asking that others be added to the list. Sign up for our daily newsletter here: Sign Up. ************************** Ken Kirschenbaum,Esq Kirschenbaum & Kirschenbaum PC Attorneys at Law 200 Garden City Plaza Garden City, NY 11530 516 747 6700 x 301 ken@kirschenbaumesq.com www.KirschenbaumEsq.com
