Common use of Data Collection, Warehousing and Management Clause in Contracts

Data Collection, Warehousing and Management. Company shall set up and operate a computer database to provide data collection, storage, manipulation for a complete identification and retrieval service to the Exclusive Market. If requested by VeriChip, for any, some or all of VeriChip’s customers, Company shall provide data collection, storage, manipulation and retrieval using the standards as described on Schedule 3 and any modifications thereto that are commercially reasonable in light of advancements in technology and changes in the manner in which VeriChip markets the Developed Products. With respect to VeriChip’s customers for which Company provides this service, VeriChip shall pay Company a monthly fee equal to 50% of the Services Gross Profit per subscriber. The “Services Gross Profit” means the amount collected by VeriChip from such customers specifically for such data storage, manipulation and retrieval minus VeriChip’s costs of providing such services to such customers (VeriChip may include in its costs the salaries of those VeriChip employees whose sole responsibility is to provide such services). Within 45 days following the end of each fiscal quarter, VeriChip shall send Company such fee for such quarter and a report detailing: (i) the amount collected during such quarter from the VeriChip customers for whom the Company is warehousing data and (ii) VeriChip’s costs in providing the collection, warehousing and retrieval of such data for such customers. The report shall not be required if the Company is not providing any such warehousing services. The Company will have the right to make or cause to be made an independent examination and/or audit of the books and records of VeriChip relating to its Services Gross Profit. Any such inspection shall be made at the Company’s expense, unless such examination and/or audit discloses a shortfall in excess of 5% in the amount paid by VeriChip to the Company, in which case VeriChip shall be responsible for the costs of the examination and/or audit. The records required by this paragraph shall be maintained and available for inspection during the Term. Notwithstanding anything to the contrary in this Section 13, VeriChip shall have the option, exercisable at any time during the term of this Agreement, to provide written notice to Company that VeriChip wishes to operate the database itself and cease Company’s provision of the database services described herein. Upon transfer of the database to VeriChip, Company shall be relieved of all liability associated with the database and VeriChip hereby agrees to indemnify and hold harmless Company and its agents, directors, officers and employees from and against any and all Damages resulting from VeriChip’s use of the database.