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whereby Members who fill extended days' supply prescriptions at a Participating Pharmacy other than a <br />Maintenance Network Participating Pharmacy do not receive benefit coverage under the Plan for such <br />prescription). If no such plan design is implemented, Rebate Amounts for such days' supply will be the same as <br />for Prescription Drug Claims for less than an 84 days' supply, and Rebate Amounts for an 84 — 90 days' supply <br />in the table set forth above shall not apply, even if a Maintenance Network Participating Pharmacy is used. <br />2. Exclusions. Member Submitted Claims, Subrogation Claims, Limited Distribution products, biosimilar <br />products, OTC products (except for insulin and diabetic supplies), vaccines, claims older than 180 days, claims <br />through Client -owned or 340b pharmacies, and claims pursuant to a 100% Member Copayment plan are not eligible <br />for the guaranteed Rebate amounts set forth in Section 1 above. <br />3. Rebate Payment Terms. Subject to the conditions set forth herein, Administrator will receive from ESI the <br />quarterly Rebate payments within approximately one hundred eighty (180) days following calendar quarter <br />adjudicated for Rebates received during the prior calendar quarter. Administrator shall pay Client the guaranteed <br />amounts set forth in Section 1 above within approximately thirty (30) days following receipt of the Rebate payments <br />from ESI. <br />4. Conditions <br />4.1. ESI contracts with pharmaceutical manufacturers for Rebates on its own behalf and for its own <br />benefit, and not on behalf of Client. Accordingly, ESI retains all right, title and interest to any and all actual <br />Rebates received from manufacturers. ESI will pay to Administrator (and Administrator shall pay to Client) <br />amounts equal to the Rebate amounts allocated to Client, as specified above, from ESI's general assets <br />(neither Client, its Members, nor Client's Plan retains any beneficial or proprietary interest in ESI's general <br />assets). Client acknowledges and agrees that neither it, its Members, nor its Plan will have a right to interest <br />on, or the time value of, any Rebate payments received by ESI during the collection period or moneys payable <br />under this Section. No amounts for Rebates will be paid until this Agreement is executed by Client. ESI and <br />Administrator will have the right to apply Client's allocated Rebate amount to unpaid Fees. <br />4.2 Client acknowledges that it may be eligible for Rebate amounts under this Agreement only so long <br />as Client, its affiliates, or its agents do not contract directly or indirectly with anyone else for discounts, <br />utilization limits, Rebates or other financial incentives on pharmaceutical products or formulary programs <br />for Prescription Drug Claims processed by ESI pursuant to the Agreement, without the prior written consent <br />of ESI. In the event that Client negotiates or arranges with a pharmaceutical manufacturer for Rebates or <br />similar discounts for any Covered Drugs hereunder, but without limiting ESI's right to other remedies, ESI <br />may immediately withhold any Rebate amounts earned by, but not yet paid to, Client as necessary to prevent <br />duplicative Rebates on Covered Drugs. To the extent Client knowingly negotiates and/or contracts for <br />discounts or Rebates on claims for Covered Drugs without prior written approval of ESI, such activity will <br />be deemed to be a material breach of this Agreement, entitling ESI to suspend payment of Rebate amounts <br />hereunder and to renegotiate the terms and conditions of this Agreement. <br />4.3 Under its Rebate program, ESI may implement ESI's Formulary management programs and <br />controls, which may include, among other things, cost containment initiatives, and communications with <br />Members, Participating Pharmacies, and/or physicians. ESI reserves the right to modify or replace such <br />programs from time to time. Guaranteed Rebate amounts, if any, set forth herein, are conditioned on <br />adherence to various Formulary management controls, benefit design requirements, claims volume, and other <br />factors stated in the applicable pharmaceutical manufacturer agreements, as communicated by ESI to Client <br />from time to time. If any government action, change in law or regulation, change in the interpretation of any <br />law or regulation, or any action by a pharmaceutical manufacturer has an adverse effect on the availability <br />of Rebates, then ESI and Administrator may make an adjustment to the Rebate terms and guaranteed Rebate <br />amounts, if any, hereunder. <br />4.4 Rebate Acknowledgment; No Representation; Rebate Limitations. Client acknowledges that <br />Administrator is not making any representation, warranty or guaranty of any kind or nature, either express, <br />implied or otherwise, regarding the amount of Rebates to be paid or remitted to Client pursuant to this <br />Agreement, except as specifically set forth in writing herein. In addition, Client waives, releases and forever <br />