Term agreement with NextAlarm (Fishy?)

I am new to the home security system and about to use the monitoring service provided by NextAlarm. However, I am not very encouraged by their term agreement, in particular on the "18. limitation of liability" and "19. third party indemnification and subrogation" parts, which, if I understand correctly, says that NextAlarm will pay only up to $250 for any damage incurred by their failure or negligence, and if there is anybody else suing them for their failure on my system, then I have to pay for them plus the attorney fee. Does it sound right? Is that a common practice of alarm companies to avoid liabilities like that in their term agreements? I would appreciate your expertise on this matter. Thanks in advance. The following is the text of NextAlarm's term agreement.

TERMS OF SERVICE AGREEMENT Please read and print out our Terms of Service Agreement. When you have finished, please click the "I AGREE" button at the bottom of the page to continue. This is an agreement between you ("Subscriber") and NextAlarm.com INC, ("Company"), for the purpose of providing monitoring of the security alarm system you already own at the address supplied by you. "You" and "yours" refer to "Subscriber" and "we", "us" and "our" refer to "Company", Subscriber's E-mail refers to the E-mail address supplied by Subscriber during the sign up process. You understand that "monitoring service" means only that Company will react to signals received by us from the security alarm system you already have at your premises.

1. SYSTEM: Subscriber understands that Company agrees to monitor a security system owned by Subscriber and not installed by or designed by Company. No representation is made by Company as to suitability or condition of Subscriber's system. Due to the many types of alarm systems and the potential incompatibility of some systems as well as the un-availability of documentation on some systems, NextAlarm.com reserves the right to decline service to any applicant at the sole discretion of NextAlarm.com and to terminate service to any NextAlarm.com subscriber should subscriber's alarm system generate excessive false or supervisory alarm signals. NextAlarm.com may take these actions at its sole discretion. Any NextAlarm.com subscriber who's service is terminated shall be entitled to a refund of any pre- paid monitoring fees less the amount for monitoring already used.

2.TERM: Service will commence when test signals from your premises have been received by Company at its monitoring center and both Company and Subscriber agree that such signals have been satisfactorily transmitted and received. After all free months service granted to you through special promotions (if any) have passed, we will bill your credit card, or debit your checking account, in the amount appropriate to your billing plan, as you have indicated in your application. This agreement shall automatically renew according to term length of your billing plan until Company or Subscriber indicate termination via E-mail or in writing. Subscriber may terminate this agreement at any time by notifying Company via E-mail or from Company's Web site at the appropriate hyperlink. Subscriber may cancel and receive a refund for unused whole months (if any), provided that any equipment supplied by the Company is returned. Refunds are granted in the amount of the original service plan cost, minus the length of subscription term so far multiplied by Company's "monthly" service plan rate as posted at the time of cancellation. Refunds are only available to customers whose billing plan term length is greater than one month.

1. PAYMENT: In the event that Subscriber has provided a credit card number as the method of billing, Company shall, at the end of the billing plan term length and on the monthly anniversary of the receipt of satisfactory test signals or the expiration of any free months monitoring service granted, whichever is the later, charge Subscriber's credit card as supplied during the sign up process, in the amount appropriate to the service plan chosen, and provide monitoring service for the length of the billing plan term. Should the charge to Subscriber's credit card be declined, Company will notify Subscriber using Subscriber's E-mail and continue service for 5 days during which time Company will attempt once each day to re-authorize the charge to Subscriber's credit card. At the end of this 5 day period, if Company has been unable to authorize the charge to Subscriber's credit card, Company shall terminate monitoring service to Subscriber and will notify Subscriber of termination via Subscriber's E-mail. In the event that Subscriber has provided a bank account number, either checking or savings, as method of payment, then Company shall, at the end of the billing plan term length and on the monthly anniversary of the receipt of satisfactory test signals or the expiration of any free months monitoring service granted, whichever is the later, create a debit instrument to Subscriber's bank account, as provided during the signup process, in the amount appropriate to the service plan chosen, and provide monitoring service for the length of the billing plan term. Should funds not be available from Subscriber's bank account, then Company will notify Subscriber, as soon as Company discovers this information, using Subscriber's E-mail and will re- deposit the debit instrument. Should funds still not be available from Subscriber's bank account, then Company will notify Subscriber using Subscriber's E-mail and by telephone that service will be discontinued at Midnight Central time, 3 days from the time of notification. Subscriber may arrange payment within these 3 days, to Company's satisfaction, to avoid discontinuance of service.

1. CONNECTION TO CUSTOMER OWNED EQUIPMENT: Company assumes no responsibility whatsoever for the maintenance, operation or non operation, actuation or non-actuation, of your existing equipment. Company reserves the right to terminate service under this Agreement in the event your existing equipment is not in good operating condition and Company will not be liable for any damages or penalties as a result of termination under those circumstances. If subscriber agrees to the use of the Company supplied alarm Redirector, subscriber understands that the line seizure function, if in effect, may be disabled by the use of the alarm Redirector. Customer agrees that if the Company supplies an alarm Redirector, customer will activate the system or return the alarm Redirector to the Company within 2 weeks of receipt of the alarm Redirector by the subscriber. Customer further agrees that if the alarm Redirector is not returned to the Company within 21 days of the Company requesting its return, then the Company may charge the Subscriber's credit/debit card or debit the Subscriber's bank account, depending on which billing option the Subscriber chose, in the amount of .00.

2. TELEPHONE LINES: Subscriber understands and acknowledges that the signals from Subscriber's alarm system are transmitted over Subscriber's regular telephone lines, Voice over IP service, broadband Internet connection or GSM cellular phone network to Company's monitoring center and in the event that the service or Subscriber has elected to use for the purpose of transmitting alarm signals is out of order, disconnected, placed on vacation or otherwise interrupted, signals from your alarm system will not be received in our monitoring center during such interruption in service and such interruption will not be known to us. Subscriber is encouraged to use the most reliable communication system available in Subscriber's area. Subscriber further acknowledges and agrees that signals that are transmitted over these services are wholly beyond the control and jurisdiction of Company and are maintained and serviced by the operating service company or utility. Subscriber understands that the telephone company may make changes to area codes or prefixes that could result in the need to reprogram Subscriber's alarm system. In this event, failure to perform such reprogramming could result in signals from Subscriber's alarm system failing to reach Company's monitoring center. Subscriber agrees to notify Company of any such area code or prefix change. Company shall be held harmless should Subscriber fail to notify Company of any such change. Installation and use of an RJ31X or equivalent telephone jack to give the alarm system priority over other telephones in Subscriber's premises is recommended, however, when the alarm system is activated, Subscriber will be unable to use the telephone service to make other calls (such as calls to the 911 emergency operator), and therefore, Subscriber may wish to have the System connected to a second telephone line. The use of DSL or other broadband telephone service may prevent the System from transmitting alarm signals to the monitoring facility and/or interfere with the telephone line-seizure feature of the alarm system. Such services should be installed on a telephone number that is not used for alarm system signal transmission. Subscriber agrees to notify Company if DSL has been installed or Subscribers intends to install DSL or other broadband service. IMMEDIATELY AFTER THE INSTALLATION OF DSL OR OTHER BROADBAND SERVICE SUBSCRIBER MUST TEST THE SYSTEM' S SIGNAL TRANSMISSION WITH COMPANY. Subscriber shall pay all charges made by any telephone company or other utility for installation, leasing, and service charges of telephone lines or equipment transmitting signals between Subscriber's protected premises and the Company.

1. CHOICE OF MONITORING SERVICES: Company presently offers three separate levels of service, as more particularly described on the Company's website, nextalarm.com. Subscriber acknowledges having read and understood the descriptions of those three levels of service. The references set forth below to those three different levels of service are for identification only. The Subscriber must rely upon the full descriptions set forth on the Company website, which are subject to change by the Company from time to time.

A. Traditional Dispatch and Telephonic Notification Plan:

If the Subscriber chooses this traditional plan, the following shall apply: Company agrees to provide monitoring services to Subscriber as follows: When Company receives an emergency signal from Subscriber's alarm system, Company will make every reasonable effort to dispatch authorities and contact persons on Subscriber's emergency notification list, as supplied by subscriber during the sign up process. Company may call Subscriber's premises first to determine if an actual emergency exists before calling any authorities. If Company has reason to believe that no actual emergency exists, it may choose not to place such notification calls. Company may discontinue any part of this service if required to do so by governmental or insurance authorities. Subscriber consents to the tape recording of all telephonic communications between Company and Subscriber's premises. In order to reduce false alarm police responses, Subscriber agrees that a period of 10 days following completion of installation of the alarm system shall be a testing period for the equipment and for the Subscriber to familiarize themselves with correct operation of the system. During this time Company will not be required but may report to the Police or Fire Department, or other authorities. Subscriber's cooperation is essential and therefore, Subscriber agrees to test the alarm system at least monthly and notify Company if the system appears not to function normally. Subscriber further agrees to keep Subscriber's emergency information updated and current by notifying Company of any changes Via E-mail, in writing or through Company's web site by logging in and giving appropriate information at the indicated prompts.

Subscriber selects the Traditional NextAlarm Plan. YOUR INITIALS:

B. $5 NetAlarm Plan. As more particularly described on Company's website at

this plan offers notification via e-mail or SMS if your alarm is triggered, including information about the specific zone that was broken. However, there is no live operator response, and neither the police, fire department nor paramedics will be dispatched if there is an alarm.

Subscriber selects the $5 NetAlarm Plan. YOUR INITIALS:

C. Free NetAlarm Lite. As more particularly described on Company's website at

plan also offers notification via e-mail or SMS if your alarm is triggered, including information about the specific zone that was broken. As is the case with the $5 NetAlarm Plan, there is no live operator response, and neither the police, fire department nor paramedics will be dispatched if there is an alarm. However, unlike the $5 NetAlarm Plan, under Free NetAlarm Lite, emails will be sent to one address only, online programming of your alarm system is not available, the signal log may be delayed and the Subscriber is limited to three full notifications per day.

Subscriber selects the Free NetAlarm Lite Plan. YOUR INITIALS:

1. TAXES and FEES: Any applicable taxes, sales taxes, permit fees, false alarm fees or assessments with regard to Subscriber's alarm system or the monitoring thereof, are the responsibility of Subscriber. Should Company be assessed any such charges specifically regarding Subscriber's alarm system or the monitoring thereof Company shall bill such charges to Subscriber's credit card.

1. THIRD PARTY INDEMNIFICATION: In the event any person not a party to this agreement, shall make a claim or file a lawsuit against the Company, for any reason relating to our duties and obligations pursuant to this agreement, you agree to indemnify defend and hold harmless Company, its agents, successors, assigns and employees.

2. ASSIGNABILITY: Company shall have the right to assign this agreement to any other person, firm or corporation without notice to Subscriber and shall have the further right to subcontract any monitoring, which it may perform. Subscriber acknowledges that this agreement, and particularly those paragraphs relating to Company's maximum liability, liquidated damages, and the third party indemnification, inure to the benefit of and are applicable to any assignees, subcontractors of Company, and the work they perform, and that they bind Subscriber with respect to said assignees, subcontractors, with the same force and effect as they bind Subscriber to Company.

1. SEVERABILITY: Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

2. CHOICE OF LAW: This agreement shall be governed by and construed under the laws of the State of California. Subscriber hereby represents that he or she is not a party to nor obligated, contracted to or otherwise engaged in a current and in force alarm system monitoring contract with any person, organization or entity and further represents and certifies that the alarm system Subscriber Contract hereby entered into will in no manner constitute a breach of any other agreement with any third party.

1. PERMITS AND LOCAL ORDINANCES: Subscriber is also solely responsible for compliance with local ordinances regarding Subscriber's alarm system. Subscriber will be responsible for obtaining and maintaining in full force in effect, at Subscriber's expense, any individual alarm permits or licenses required by governmental authorities. The city or county in which Subscriber's home or business is located may require that Subscriber obtain a permit for the use and monitoring of the system. Local authorities may not respond to alarm notifications until all permits or licenses for use of the system have been obtained, and therefore Company may not begin monitoring until Subscriber has obtained at Subscriber's expense all necessary permits or licenses, and provided Company with the license or permit number.

2. FALSE ALARMS: Subscriber agrees that Subscriber and others using the System, will use it carefully so as to avoid causing false alarms. False alarms can be caused by Subscriber error, severe weather or other forces beyond our control. If Company receives too many false alarms, that will constitute a breach of contract by Subscriber, and Company may cancel monitoring service and seek to recover damages. Subscriber will pay any false alarm fee or penalty assessed against the System by any governmental agency, whether charged to Subscriber or Company.

1. INTERRUPTION OF SERVICE: Company assume no liability for interruption of monitoring service due to strikes, riots, floods, storms, earthquakes, fires, power failures, insurrection, interruption or unavailability of telephone service, acts of God, or for any other cause beyond the control of Company, and Company will not be required to supply monitoring service to Subscriber while interruption of service due to any such cause may continue.

2. SUSPENSION OR CANCELLATION OF THIS SERVICE: This agreement shall be suspended without notice if Company's monitoring facility or Subscriber's premises are destroyed by fire or other catastrophe, or so substantially damaged that it is impractical to continue service, or in the event Company is unable to render service as a result of any action by any government authority.

1. SUBSCRIBER'S DUTIES AS TO USE OF SYSTEM: Subscriber will instruct all other persons who may use the System on its proper use. Subscriber should test the System's protective devices and send test signals to our monitoring central station weekly during the term of Agreement. If the System includes any wireless devices, Subscriber will replace the batteries as needed and at least once each year.

2. NOT UNDER CONTRACT WITH OTHER ALARM COMPANY: Subscriber further represents and warrants that Subscriber is not presently under contract with any other alarm company for the provisioning of alarm services at the premises described above. Subscriber agrees to indemnify and hold harmless Company against all claims, suits, expenses and damages by judgment or otherwise (including attorney's fees necessary to enforce this indemnity provision) which may now or hereinafter be incurred by Company as a result of, or arising out of, any agreement that the Subscriber may have entered into with any other party concerning alarms systems at the premises described above.

1. COMPANY IS NOT AN INSURER; LIQUIDATED DAMAGES; LIMITATION OF LIABILITY: Subscriber understands and agrees that (a) Company is not an insurers of Subscriber's property or the personal safety of persons in Subscriber's premises; (b) Subscriber will provide and maintain any insurance on Subscriber's premises and its contents; (c) the amount Subscriber pays to Company is based only on the value of the services Company provide and not on the value of Subscriber's premises or its contents; (d) alarm systems and the monitoring service may not always operate properly for various reasons; (e) it is difficult to determine in advance the value of the property that might be lost; stolen or destroyed if the System or service fails to operate properly; (f) it is difficult to determine how fast the police or fire department or others would respond to notice of an alarm signal; (g) it is difficult to determine what portion, if any, of any property loss, personal injury or death would be proximately caused by Company's failure to perform, their negligence, or a failure of the System or service. THEREFORE SUBSCRIBER AGREES: Even if a court decides that a failure of the system or monitoring service, or Company's negligence, or a failure of monitoring or repair service caused or allowed any harm or damage (whether property damage, personal injury or death) to Subscriber or anyone on Subscriber's premises, Subscriber agrees that Company's maximum aggregate liability shall be limited to 0.00, as liquidated damages and not as a penalty, and this shall be Subscriber's only remedy regardless of what legal theory is used to determine that Company was liable for the injury, loss or death. SUSBSCRIBER MAY OBTAIN A LIMITATION OF LIABILITY: If Subscriber wishes, Subscriber may obtain from Company a limitation of liability instead of the liquidated damages for an additional periodic charge. If Subscriber elects this option, Company will attach a rider to this Agreement which will set forth the amount of the limitation of liability and the amount of the additional charge. Agreeing to the limitation of liability does not mean that Company is an insurer.

2. THIRD PARTY INDEMNIFICATION AND SUBROGATION: If anyone other than Subscriber, asks Company to pay for any harm or damages (including property damage, personal injury or death) connected with or resulting from: (i) a failure of the System or services, (ii) Company's negligence, (iii) any other improper or careless activity of Company in providing the System or services or (iv) a claim for indemnification or contribution, Subscriber will repay to Company, as the case may be; (a) any amount which a court orders Company to pay or which Company reasonably agrees to pay, and (b) the amount of Company's reasonable attorney's fees and any other losses and costs that Company may pay in connection with the harm or damages. Subscriber agrees to release Company from any claims of any parties suing through Subscriber's authority or in Subscriber's name, such as Subscriber's name, such as Subscriber's insurance company and Subscriber agrees to defend Company against any such claim. Subscriber will notify Subscriber's insurance company of this release.

1. LIMITATION ON LAWSUITS; ARBITRATION: Both Company and Subscriber agree that no lawsuit or any other legal proceeding connected with this Agreement shall be brought or filed more than one (1) year after the incident giving rise to the claim occurred. Any controversy, dispute, or claim between the parties arising out of or relating to this Agreement, (other than actions brought by Company in small claims court to collect amounts due under this Agreement) shall be determined and settled by arbitration under the rules and procedures, then in effect, of the American Arbitration Association at its office in or nearest to Santa Barbara, California, and the loser in such arbitration shall bear all costs thereof. The decision in arbitration shall be final as to the resolution of such differences and as to the proper mode of carrying the same into effect.

2. ENTIRE AGREEMENT: The entire and only agreement between you and Company is written in this Agreement. It replaces any earlier oral or written understandings or agreements. It may only be changed by a written agreement signed by Subscriber (and if married, Subscriber's spouse) and Company. If you have given or ever give Company a purchase order for the System or service which provides different terms than this Agreement, this Agreement will govern and be controlling. If any provision of this Agreement is found to be invalid or illegal by a court, the balance of the Agreement shall remain in force. You agree that this Agreement is performed in the State of California and shall be governed by the laws of California. In the event any of the terms or provisions of this agreement shall be declared to be invalid or inoperative, all of the remaining terms and provisions shall remain in full force and effect.

I have read and understand the Terms of Service Agreement.

Please initial exactly one of the service plan types (in the yellow boxes), then click I AGREE.