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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
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