EX-10.3 SOFTWARE LICENSE AND SERVICES AGREEMENT



 





EXHIBIT 10.3




SOFTWARE LICENSE AND SERVICES AGREEMENT




     This software license and services agreement (“Agreement”) is by and between
inPharmative, Inc. (“inPharmative”), a Nevada corporation, having its principal place of business
at 10975 Benson Drive, Suite 100, Overland Park, KS 66210, and National Medical Health Card
Systems, Inc.(“NMHC” or “Client”) a Delaware corporation, having its principal place of business at
26 Harbor Park Drive, Port Washington, NY 11050.



     This Agreement sets forth the terms and conditions upon which inPharmative will provide a
limited license for use of it’s proprietary rebate administration and financial modeling software
(“Software”) and certain support services to NMHC for an agreed upon fee.



     In consideration of the mutual promises, covenants, warranties and representations set forth
herein, the parties agree as follows:



General Nature of the Agreement and Agreement of the Parties:




A. inPharmative shall provide a turnkey; outsource solution for a significant part of NMHC’s
business.



B. inPharmative’s production shall be stable, accurate, predictable and timely.



C. The Software shall include full-featured functionality that keeps pace with the
industry.



D. inPharmative will function as NMHC’s development department for the Software and will
develop a mutually agreed upon and reasonable amount of NMHC-specific functionality
including current & future “gaps” in the Software functionality.



E. NMHC shall have full access to documentation of NMHC accessible data structures and the
data housed and / or processed by the Software. NMHC can directly access the data located
on inPharmative servers, the data will also be replicated onto NMHC servers located at NMHC
at the option of NMHC and the data will be supplied in the form of periodic data extracts
in a mutually agreed format and frequency. inPharmative will provide reasonable support
and training to enable NMHC to access the data.



F. inPharmative will conduct its operations using robust best practices and controls
consistent with public company requirements. inPharmative commits to do whatever is
necessary to keep NMHC in compliance with Sarbanes-Oxley Section 404 including, but not
limited to obtaining a SAS70 Type II audit within one month from the date of this Agreement
and annually thereafter.



G. inPharmative acknowledges that speed of implementation of the Software is of key value
to NMHC and a key driver of the decision to use the Software. inPharmative will use best
efforts to implement the Software into production within 30 days of the date of this
Agreement. Failure to comply within the required timeframe will result in penalties as
calculated in accordance with the terms of Exhibit A.



CONFIDENTIAL




 









 








ARTICLE 1: SCOPE OF LICENSE



1.1  — Grant of License

inPharmative hereby grants to NMHC a non-exclusive, limited license to use the Software in the
United States of America and its Territories as set forth in this Agreement.



1.2 — Intellectual Property Ownership

The Software is the intellectual property of and is owned by inPharmative. The structure,
organization and code of the Software are the valued trade secrets and confidential information of
inPharmative. This Agreement does not grant NMHC any intellectual property rights in the Software
and all rights not expressly granted are reserved by inPharmative. Notwithstanding the foregoing,
all data is the intellectual property of and owned by NMHC and shall be held in confidence. This
Agreement provides no intellectual property rights to inPharmative with respect to NMHC data, in
raw form or aggregated, and provides only for inPharmative’s use of the data strictly for the
purpose of rebate processing on behalf of NMHC.



1.3  — Restrictions

NMHC shall not attempt to copy, modify, adapt, duplicate, reproduce or translate the Software
without the prior written consent of inPharmative. NMHC shall not reverse engineer, decompile,
disassemble or otherwise attempt to discover the source code of the Software. Notwithstanding the
foregoing, NMHC is not restricted from independently developing software that is substantially
similar to the Software.



1.4  — Transfer

NMHC may transfer its license to the Software to any of its subsidiaries or affiliates or to a new
entity that results from a merger and / or acquisition of NMHC provided that the new entity agrees
to abide by the terms of this agreement.



1.5 — Location and Access to Software

The production Software will reside on inPharmative’s servers located at the First National
Technology Solutions data center with an address of 12851 Foster Street, Overland Park, KS 66213.
The hosting location will not be changed by inPharmative without NMHC’s consent, which consent
shall not be unreasonably withheld. The Software will be accessible to NMHC via a mutually agreed
upon VPN, Internet or other connection. NMHC has the option to host the Software at an internal
NMHC site, which fees shall be negotiated between the parties upon NMHC’s exercise of this option.




ARTICLE 2: PERFORMANCE OF SERVICES



2.1 Contract Management System Hosting

inPharmative shall host all Software applications unless NMHC elects to host the Software
internally in accordance with Section 1.5. Regardless of hosting location, inPharmative shall
provide system enhancements, new Software versions and routine system data updates as they become
available, at no additional cost to NMHC.



2.2 Software Training

inPharmative will provide to designated NMHC staff, Software training, in the form of one initial
on-site training session with assistance in initial contract data input. Subsequent staff training
and on-going support will be provided via on-line and telephone tutorials. At the request of NMHC,
inPharmative will also provide at least two on-site training sessions per year to update NMHC on
enhancements/changes the Software.



2.3 Technical Support

inPharmative will provide on-going technical support via toll-free telephone or e-mail access
during normal business hours of 8am to 6pm CST and during NMHC’s quarterly rebate processing
period. inPharmative will provide 24 hour technical support access via toll-free telephone access.




2









 







2.4 Report Creation

inPharmative will provide NMHC with web-based standard rebate performance report templates that
will be updated with each processing cycle. In addition, inPharmative will provide a reasonable
number of reports designed to NMHC’s specifications to support P&T Committee, contracting, client
account management and other needs. NMHC may also internally develop reports that access data
processed and / or stored by the Software. inPharmative will provide reasonable support to assist
NMHC in developing these reports, if any.




2.5 Software Enhancements



inPharmative shall provide enhancements to the Software, whenever needed to maintain compliance at
all times with all governmental regulations and industry standards including, but not limited to
Sarbanes-Oxley 404, Medicare Part D regulations and the Centers for Medicare and Medicaid Services
(CMS) regulations, HIPAA, applicable NCPDP standards, and other applicable state and federal
regulations and requirements.



inPharmative and NMHC agree to meet no less often than twice per year for the purpose of reviewing
industry trends and practices and to review inPharmative future development schedule for Software
enhancements. inPharmative will insure that the Software includes full-featured functionality that
keeps pace with the industry. inPharmative shall make continuous improvements to the Software which
collectively add significant levels of functionality no less often than 2 times per year and
regular additions of lesser levels of functionality no less often than once per quarter.



inPharmative will insure that enhancements to the Software will accommodate backwards compatibility
for data extracts and other data structures that are accessed by NMHC for at least 120 days or
other mutually agreed upon time period.



2.6 Service Level Standards and Penalties

inPharmative agrees to comply with the service level standards and penalties set forth in Exhibit A.




ARTICLE 3: WARRANTIES



3.1 — Warranty of Title

inPharmative hereby represents and warrants to NMHC that inPharmative is the owner of the Software
or otherwise has the right to grant to NMHC the rights set forth in this Agreement, including
without limitation, any third party software, data and materials included in the Software.



3.2 — Warranty of Functionality
inPharmative warrants that, for the entire term of this Agreement, the Software shall perform in
all material respects according to inPharmative’s specifications concerning the Software when used
with the appropriate computer equipment. inPharmative will insure that the appropriate computer
equipment is used at the inPharmative hosting facility to operate the Software. inPharmative will
insure that the Software will maintain compatibility with current and future versions of Microsoft
Internet Explorer.




3









 







* Confidential Information Has Been Omitted and Filed Separately With the Commission.



3.3 — Warranty of Performance

inPharmative represents and warrants that all services provided under this Agreement will be
performed promptly in a good and workmanlike manner consistent with best industry practices and in
accordance with the service level standards agreed upon in Exhibit A of this Agreement. Failure to
meet service level standards will result in applicable penalties as defined in Exhibit A.



3.4 — Warranty of Authority

inPharmative represents and warrants that it has the full right and authority to execute and
deliver this Agreement and to perform its obligations under this Agreement, and that neither the
execution nor delivery of this Agreement by inPharmative, nor consummation of the transactions
contemplated hereby, will result in a breach or default under the terms and conditions of any
contract, order, license, charter document or other agreement by which inPharmative is bound.



3.5 — Warranty of Organization

inPharmative represents and warrants that it is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation and has all requisite
power and authority to own, lease and operate its properties and to carry on its business as it is
now being conducted.




ARTICLE 4: FEE PAYMENT 



4.1 -Fee Structure

NMHC will pay inPharmative fees for rebate contract administration services and client total paid
prescription claims that are eligible for rebates processing (“Eligible Paid Claims”) as follows:




     a) Provision of Software and Hosting Infrastructure:


$[       ]* per Eligible Paid Claim — for first [       ]* Eligible Paid Claims per calendar year
(minimum of $[       ]* per month). However, the minimum will not apply until the entire NMHC book
of business has been fully implemented; a full month of Eligible Paid Claims has been processed in
production mode through the Software.



$[       ]* per Eligible Paid Claim — for each additional Eligible Paid Claim over [       ]* per
year.



Eligible Paid Claims will only include those claims that are eligible for rebates processing.
Certain types of claims including, but not limited to claims for cash discount card programs are
not eligible for rebates processing and will be filtered out of processing through the Software.
All ineligible claims of this nature will be excluded from the counts of Eligible Paid Claims and
will not incur any fees whether they are filtered out by NMHC before sending to inPharmative or
filtered out by inPharmative during processing by the Software.



This fee will be waived for the claims processed for the period January 1, 2007 through June 30,
2007 for the Medicare Part D business segment, provided that NMHC pays the rebate contract
administration services fee for that period in accordance with the terms outlined below.



In the event that there are significant industry events and/or significant changes in NMHC’s
business that materially reduce revenues available to NMHC from processing rebates then the parties
will negotiate in good faith to reduce or eliminate the minimum fee as defined above. If such an
event occurs and the total NMHC Eligible Paid Claims falls below [       ]* per year, then the fee
will be the actual count of Eligible Paid Claims times the applicable per claim fee and the minimum
fee will not apply.




4









 







* Confidential Information Has Been Omitted and Filed Separately With the Commission.




     b) Provision of Manufacturer Rebate Contract Administration Services:


For the fee of $[       ]* per month, inPharmative will provide the rebate contract administrative
services as described herein. NMHC’s engagement of manufacturer rebate contract administration
services by inPharmative requires an [       ]* fee commitment commencing as of January 1, 2007,
with the initial payment for the six month period ending June 30, 2007 invoiced concurrent with the
execution of this agreement.





     I. Contract Management System Maintenance



Initial input, of all current and future executed manufacturer rebate agreements and
continuous update of inPharmative contract management system data requirements, as provided to
inPharmative by NMHC in an agreed upon format, including NMHC’s manufacturer rebate contract
terms and associated changes, formulary drug list, membership and group identification,
relevant co-pay information and prescription claims data. Any modifications to these items
must be submitted to inPharmative no later than 15 days prior to the end of the quarter to be
included in that quarters’ claims submission.




     II. Quarterly estimates



inPharmative will provide the following information to support the finance estimation process
in an agreed upon format within twenty one (21) days from the end of each quarter:



a). Rebate estimates by manufacturer and NDC;

b). An equivalent to the NMHC 2587 Estimation by mfr-ca.xls - lists out the
rebate-eligible claim counts (Retail and Mail) and estimated rebate and admin fee
amounts by customer/client and by manufacturer.

c). An equivalent to the NMHC 2588 Claim counts by CA. xls- lists out
the paid claim counts (Retail and Mail) by customer/client and by
manufacturer.




     Examples of these reports are being provided separately.




     III. Rebate Processing and Manufacturer Submission



Perform all functions associated with end-of-quarter processing of NMHC rebate reimbursements
and submission of electronic invoice and prescription claim data requirements to respective
manufacturers.




     IV. Payment Reconciliation



Reconciliation of invoiced rebate amounts to actual payments with reporting of variances.
inPharmative will serve as the first line of communication with manufacturers to resolve
variances.




     V. Reporting



inPharmative will provide NMHC with web-based access to standard rebate performance reporting
(e.g. manufacturer, units, price, rebate amounts) updated with each processing cycle. In
addition, inPharmative will provide a reasonable number of reports specifically designed to
NMHC’s specifications at no additional charge to NMHC.




     VI. Audits



inPharmative will support NMHC in its response to internal, CMS, client and/or manufacturer
audits as the needs relate to services and/or calculations performed under this agreement
during the term of this agreement.



5









 








4.2-Fee Payment Schedule



NMHC agrees to pay inPharmative the fee on a monthly basis, due on the last day of the following
month. The first payment will be due after completion of implementation and production processing
of a full month of Eligible Paid Claims. Interest of 1% per month (12% per annum) will be charged
on the outstanding balance of any invoice that is not paid by its due date. NMHC agrees to pay
inPharmative all costs incurred in collecting delinquent payments, including, but not limited to
reasonable attorney’s fees, court costs and collection agency fees.




ARTICLE 5: CONFIDENTIALITY



inPharmative recognizes and respects the confidential and competitive nature of such information
and agrees to limit access to such information to only those officers or employees who shall
reasonably need to know such information.



This Agreement and all information contained herein shall be kept confidential by both parties.
Each party agrees not to disclose to any third party any such information unless the disclosing
party obtains written release from the other party or is required by court order.




ARTICLE 6: TERM AND TERMINATION



6.1 — Term of Agreement.

This Agreement shall commence upon January 1, 2007 and remain in effect until May 31, 2010 unless
terminated sooner pursuant hereto. After this initial term, the contract will automatically renew
for successive one year terms unless notification is provided by either party that the contract
will not be renewed. Such notification should occur at least 90 days prior to the expiration of
the contract.



6.2  — Termination of Agreement.

This Agreement may be terminated by either party if:

a) The other party becomes insolvent, is dissolved or liquidated, makes a general assignment of the
benefits of its creditors, files or has filed against it a petition in bankruptcy, or has a
receiver appointed for a substantial part of its assets.

b) The other party has committed a material breach and such breach has not been cured within thirty
(30) days of receipt of a written notice of such breach.

c) Any change in law or regulation that would: (i) make this Agreement or material portion of a
party’s performance under this Agreement illegal, or (ii) require that any material terms of this
Agreement be extended to any non-party.

d) This Agreement may be terminated by NMHC at any time without cause upon ninety (90) days written
notice to inPharmative.



6.3 — Obligations upon Termination.

Upon termination:

a) inPharmative agrees to return to NMHC or destroy all raw data files and a record of all
transactions executed during the term of this Agreement. inPharmative will notify NMHC before any
raw data files or transactions are destroyed and NMHC shall have the right to take possession of
all such files and records in lieu of their destruction.

b) NMHC shall immediately discontinue use of Company’s services and system applications.

c) NMHC shall pay inPharmative any amounts due under this Agreement up to and including the date of
termination.

d) Parties shall continue to adhere to the confidentiality obligations of Article III.



6.4 — Change-in-Control of inPharmative

a) Pursuant to Article 5 of this Agreement, inPharmative shall treat all NMHC data and other
proprietary information as confidential at all times including during any due diligence or other
activities that may occur at inPharmative as a part of a contemplated sale, merger, joint venture,




6









 







strategic partnership or similar event with regards to ownership and operations of inPharmative. In
the event of a sale of inPharmative, NMHC shall have the right to internally host the Software and
to prohibit any acquirer or other third party with an interest in inPharmative from accessing and /
or processing NMHC data or other information.



6.5 — Change-in-Control of NMHC

a) Pursuant to Article 5 of this Agreement, NMHC shall treat all inPharmative applications and
other proprietary information as confidential at all times including during any due diligence or
other activities that may occur at NMHC as a part of a contemplated sale, merger, joint venture,
strategic partnership or similar event with regards to ownership and operations of NMHC.




ARTICLE 7: SOURCE CODE ESCROW



For the protection of the parties, it is agreed that the source code of the Software and all
documentation necessary to operate and maintain the Software (the “Related Materials”), and any
updates or modifications thereto, shall be maintained in the hands of in the hands of Payne &
Jones, located at 11000 King Street, Overland Park, KS 66210, who shall serve as an escrow agent
for that purpose. NMHC reserves the right to designate another, mutually agreeable escrow agent
whose services, if used, will be at NMHC’s expense. inPharmative shall deposit Software and
Related Materials with the escrow agent within 10 days of the receipt of the first payment by NMHC
and no less often than once per calendar quarter thereafter and upon completion of any significant
updates or modifications. Escrow agent will notify NMHC when initial and subsequent deposits are
made into escrow along with a list of contents that are being held in escrow. The costs of said
escrow shall be paid by inPharmative during the term of this Agreement. Escrow Agent shall hold
the Software source code and Related Materials and shall not deliver the same to either party
except as provided herein. In the event that inPharmative becomes insolvent, is dissolved or
liquidated or files for bankruptcy, Escrow Agent shall deliver the Software source code and Related
Materials to NMHC upon receipt of all escrow fees plus the sum of one dollar ($1.00). Escrow Agent
shall provide notice to the other party who shall have ten (10) days to serve written notice of
objection to the break of escrow. In the event objection is received in a timely manner, Escrow
Agent agrees to continue to hold in escrow the Software source code and Related Materials until
such time as the matter has been resolved and Escrow Agent is ordered to deliver the same to one
party or the other. In the event any objection is timely filed, the parties agree to submit the
matter to arbitration under the rules of the American Arbitration Association, with each party to
bear their own costs.




ARTICLE 8: MISCELLANEOUS



8.1 — Entire Agreement

This Agreement contains the entire agreement and understanding of the parties and shall supersede
any prior agreements and understandings of the parties with respect to the subject matter hereof.



8.2 — Compliance with Laws and Severability

In the performance of its duties and obligations under this Agreement, inPharmative and NMHC shall
each at all times comply with all applicable federal, state and local laws, statutes, regulations,
rules, orders and ordinances now in effect or as hereafter enacted, amended or promulgated. If any
clause or provision of this Agreement is held to be invalid or unenforceable by any court of
competent jurisdiction, the remainder of this Agreement shall not be affected thereby. All other
clauses or provisions of this Agreement, not found invalid or unenforceable shall be and remain
valid and enforceable.




7









 







8.3 — HIPAA Compliance

inPharmative recognizes that NMHC is a covered entity under HIPAA rules and that inPharmative, when
performing required services under this Agreement will be considered a business associate.
inPharmative agrees to comply with all applicable sections of the HIPAA rules and applicable
compliance dates. inPharmative agrees to ensure that any agent, including a subcontractor, working
on behalf of inPharmative agrees to the same conditions.



8.4 — Indemnity

inPharmative recognizes that they serve only to process information relating to contractual
agreements between NMHC and various pharmaceutical manufacturers. Therefore, NMHC agrees to
indemnify inPharmative and hold inPharmative harmless from and against any and all liabilities,
damages, costs or expenses (including reasonable attorney’s fees) claimed by any third party while
inPharmative is performing services in accordance with the terms of this Agreement; provided,
however, that said liability, damage, expense, cost was not the result of any act or omission of
inPharmative.



inPharmative agrees to indemnify NMHC and hold NMHC harmless from and against any and all
liabilities, damages, costs or expenses (including reasonable attorney’s fees) claimed by any third
party as a result of a breach of the terms of this Agreement by inPharamctive; provided, however,
that said liability, damage, expense, cost was not the result of any act or omission of NMHC.



8.5 — Limited Liability

Except as otherwise provided in this Agreement, by law or inPharmative’s negligent act, omission or
misconduct, inPharmative is not responsible for any loss, injury or damage, whether direct,
indirect, incidental, special or consequential, caused by inPharmative’s services including, but
not limited to the use of inPharmative’s software. This limitation on liability includes, but is
not limited to, the transmission of any viruses which may infect a user’s equipment, failure of
mechanical or electronic equipment or communication lines, telephone or other interconnect
problems, unauthorized access, theft, operator error, strikes or other labor problems or any other
cause the result of force majeure.



8.6 — Enjoinment

If NMHC is enjoined (either temporarily or permanently) from using the Software in the manner
described herein the inPharamtive shall, at its option, either (1) replace the application, without
additional charge, with a comparable, functionally equivalent and non-infringing product; (2)
modify the Software to avoid the infringement; (3) obtain a license for NMHC to continue to use the
Software for the duration of the term and pay for any additional fee required for such license; or
(4) if none of the foregoing alternatives are possible even after inPharmactive’s exercise of
reasonable commercial efforts, inPharmative shall refund to NMHC a pro-rata portion of the fees, if
applicable, based on the remaining portion of the term.



8.7 — Amendments and Captions

The terms of this Agreement may only be modified or amended in writing signed by duly authorized
representatives of both parties. The captions of this Agreement are for convenience and reference
only and in no way define, limit or describe the scope of this Agreement or the intent of any
provision hereof.



8.8 — Notices

Any notice to be given by either party to the other shall be in writing and shall be given by
sending such notice postage pre-paid by certified mail or by overnight carrier and addressed to the
other party at the location specified below:




8









 








If to inPharmative:

Bob Rase

inPharmative, Inc.

10975 Benson Dr, Suite 100

Overland Park, KS 66210




If to NMHC:

Chief Information Officer

NMHC

26 Harbor Park Drive

Port Washington, NY 11050




and a copy to




Chief Legal Officer

NMHC

26 Harbor Park Drive

Port Washington, NY 11050



8.9 — Attorney’s Fees

If any party hereto commences an action to enforce the terms of, or resolve a dispute concerning
this Agreement, the prevailing party in such action shall be entitled to recover from the other
party all costs and expenses incurred by such party in connection therewith, including reasonable
attorney’s fees.



8.10 — Assignments

inPharmative and NMHC shall not assign this Agreement to a third party without prior written
consent of the other party except that NMHC shall have the right to transfer its license to
the Software to a new entity that results from a merger and / or acquisition of NMHC provided that
the new entity agrees to abide by the terms of this agreement. Any permitted assignee shall
assume all obligations of its assignor under this Agreement. inPharmative and NMHC shall have the
right to assign this Agreement to its parent company, subsidiary or affiliated company. This
Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their
respective assigns as permitted under this Agreement.



8.11 — Force Majeure

Neither party shall be considered in default of its obligations hereunder, or be liable for damages
or otherwise, for failure or delay in performance which is due to, including but not limited to the
following: (i) Acts of God (ii) regulations or laws of any government (iii) war or civil commotion
(iv) destruction of facilities (v) fire, earthquake or storm (vi) labor disturbances (vii) failure
of public utilities or common carrier.



8.12 — Sales and Use Tax

inPharmative shall pay all sales, service, use taxes, if any, arising from this Agreement.



8.13 —  No Waiver of Rights

No waiver by either inPharmative or NMHC with respect to any breach or default or of any right or
remedy and no course of dealing shall be deemed to constitute a continuing waiver of any other
breach or default or of any other right or remedy, unless such a waiver be expressed in writing by
the party to be bound.




9









 







8.14 —  Record-keeping

inPharmative shall maintain records, including all databases, reports and financial documents for a
period of the longer of (i) retention requirements mandated by CMS or other state or federal
regulatory body, or (ii) twenty-five (25) months following receipt of fee payment by NMHC or
termination of this Agreement, if sooner. InPharmative shall provide historical electronic data and
other records from archives within three (3) business days from the date of request by NMHC.



8.15 — Governing Law

The provisions of this Agreement and all questions with respect to the construction and enforcement
thereof and the rights and liabilities of the parties hereto shall be governed by, and construed
and enforced in accordance with, the laws of the State of New York. The venue of any action
construing or enforcing this Agreement initiated by any party hereto shall be filed in the state or
federal courts servicing New York.



The parties to this Agreement, by their signatures below, agree to the terms set forth herein.




	 	 	 
	/s/ Jason E. Knaust
 

inPharmative, Inc (signature)	 	
/s/ Stuart Diamond
 

(NMHC Systems, Inc (signature)
	Jason E. Knaust
 

inPharmative, Inc (printed name)	 	
Stuart Diamond
 

(NMHC Systems, Inc (printed name)
	President
 

(Title)	 	
CFO
 

(Title)
	8/7/2007
 

[Date]	 	
 
 

[Date]






10









 






EXHIBIT A




Service Level Standards







	 	 	 	 	 	 	 
	Service Standard	 	Definition of Standard	 	How measured	 	Penalty
	 
	InPharmative website 

Availability

	 	Availability of online
system 99.5% of the
time during normal
business hours (6:00am
— 6:00pm CST),
excluding scheduled
downtime for
maintenance or system
upgrades.
	 	Measurement is on a
monthly basis.


Any experienced
downtime will be
immediately
reported by Client
via email and/or
telephone.
	 	Warning: None


Failure to meet
standard = Penalty
	 
	 
	 	 	 	 	 	 
	 
	Upload of Claims
Data to
InPharmative
databases.

	 	From the time a
client’s utilization
file, is received by
inPharmative that file
shall be loaded and
processed by
inPharmative within 24
hours of receipt
excluding weekends.
	 	Any experienced
latency will be
immediately
reported by
Client’s via email
and/or telephone.
	 	Warning: None


Failure to meet
standard = Penalty
	 
	Processing time of
on-line
inPharmative
reports

	 	From the time a link,
button or other web
navigation mechanism
is activated the
processing time for
any given report shall
not exceed 24 hours,
99% of the time.
	 	Any experienced
latency will be
immediately
reported by Client
via email and/or
telephone.
	 	Warning: None


Failure to meet
standard = Penalty
	 
	Notification of
InPharmative
outages or
performance
problems.

	 	If InPharmative or
portions of
inPharmative are
unavailable or
malfunctioning or if
performance based
Service Standards are
not being met,
customer shall be
notified within 60
minutes from the start
of the problem.
inPharmative shall
notify customer
through phone calls
and emails -
distribution list
provided by Client.
	 	Any experienced
notification gaps
will be immediately
reported by Client
via email and/or
telephone.
	 	Warning: None


Failure to meet
standard = Penalty








11









 









	 	 	 	 	 	 	 
	Service Standard	 	Definition of Standard	 	How measured	 	Penalty
	 
	Service Requests

	 	inPharmative will
respond to all urgent
requests within 4
hours and resolve
within 1 business day


inPharmative will
respond to all
non-urgent requests
within 1 business day
and will resolve
within 4 business day.


Examples of urgent
requests include but
are not limited to
major functional
errors that prevent
processing, any errors
that result in
incorrect
calculations.
Non-urgent request
include but are not
limited to questions
on contract set-up and
Software
functionality.
	 	Tracked via a
Service Request
Log. Monthly
report listing open
trouble tickets,
final outcome, and
turnaround time.
	 	Warning: None


Failure to meet
standard = Penalty
	 
	Accuracy of Data
Processing

	 	All material Software
calculations/reports
/etc will be
accurate.
	 	Calculation errors
will be tracked by
Client and reported
back to
inPharmative on a
quarterly basis.
	 	Warning: None


Failure to meet
standard = Penalty








Service Level Agreement Penalties Defined



inPharmative will provide a statement of its compliance with all agreed upon service levels, in a
format agreed to by the parties, on a quarterly basis signed by an officer of the company.
Variations from agreed upon service levels, if any, will be noted.



Penalty — inPharmative will provide Client with a 5% credit of the total InPharmative monthly fees
for each failure to meet a Service Standard as defined above. Under no circumstances will the
cumulative monthly Penalties exceed 15% of total monthly fees in a given month, except as set forth
below.



If inPharmative receives a Penalty for failing to meet a service standard during three consecutive
months (“Three Consecutive Months”), then (i) inPharmative will provide Client with an additional
15% credit and if such service standard failure is not corrected, an additional 15% credit shall be
provided to Client for each additional month after the Three Consecutive Months and (ii) Client
shall have the right to terminate this Agreement immediately upon notice to inPharmative. In such
event, inPharmative shall refund to Client the amount of any unused service credits that exist on
the date of termination.





12