Exhibit 10.
32


 





 


November 21,
2005


 


VIA
OVERNIGHT MAIL


Mark Miller


VP, Investment Purchasing


McKesson Corporation


1220 Senlac Drive


Carrollton, Texas 75006


 


RE:                              Second
Amendment to Inventory Management Agreement by and between Supplier and
McKesson Corporation dated 6/10/03 (“Amendment”)


 


Dear Mark:


 


This letter serves to amend the Inventory
Management Agreement between First Horizon (“FHPC”) and McKesson Corporation (“Wholesaler”)
dated 6/10/2003 and the subsequent amendment to that agreement dated November 30,
2004 (collectively, the “Agreement”).


 


The parties agree to amend the Agreement as
follows:


 


Article 2
(Purchasing and Inventory)


 


1.                                       Paragraph
2.1 shall be deleted in its entirety and replaced with the following paragraph.


 


Purchase
and Delivery Requirements. Wholesaler agrees to
purchase 100% of its requirements of Products directly from FHPC. Beginning January 1,
2006, FHPC shall deliver any and all Products ordered by Wholesaler to
Wholesaler’s centralized distribution center located in Aurora, Colorado.  Wholesaler agrees to order the minimum
quantities for each Product set forth in the attached Exhibit A.


 






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2.                                       Section 2.3
(Inventory Levels) shall be deleted in its entirety and replaced with the
following:


 


Inventory Levels.  During the term of this
Agreement, Wholesaler shall maintain at all times a stock of Product(s)
sufficient to supply the demand of Customers provided, however, such stock
shall be not less than ######### (##) days nor more than ####### (##) days of Wholesaler’s expected sales
to Customers as determined by its Customary Practice unless otherwise agreed to
by FHPC in writing.   The Inventory
Levels set forth in this section reflect an additional ### (#) ##### stock
of Product(s) for FHPC’s Disaster Recovery plan.


 


Wholesaler shall have no obligation to
maintain the minimum Inventory Level of a particular Product if such Product is
unavailable from FHPC.


 


3.                                       Paragraph
2.5 (Price Increases) shall be deleted in its entirety and replaced with the
following:


 


Price
Increase.


 


(a)       In the
event, FHPC institutes a New Price for any Product and provided  Wholesaler has maintained the Inventory
Levels set forth in this Agreement as determined by FHPC,  then Wholesaler shall have the right to
purchase such Product at its Old Price in an amount equal to:


 


(b)       Wholesaler’s
average weekly Customary Practice of Product over the preceding three (3) months
less  purchases made by Customers that
receive Federal Statutory Pricing(1) ( collectively “Federal Customers”);


 


Multiplied by


 


(i)          ## ####;


 


Minus


 


(ii)                              Wholesaler’s Aggregate Inventory for such Product on the business day  immediately preceding the effective date of a
New Price less the  on hand reserve
inventory required for Federal Customers.


 


(a)       Wholesaler shall provide via EDI its Aggregate Inventory as of the
business day immediately preceding the effective date of a New Price.  Within ten (10) days of the latter of
the


 






(1) Customers that receive Federal Statutory Pricing
include but not limited to Department of Defense (DOD), Veterans Administration
(VA), Disproportionate Share Hospitals (DSH), and Public Health Services (PHS).


 


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effective date of a New Price or FHPC’s receipt of Wholesaler’s Aggregate
Inventory as provided in the previous sentence, FHPC shall notify Wholesaler of
the amount of Eligible Product (by NDC number) it may purchase. Within ten (10) days
after receipt of such notification, Wholesaler shall send any and all purchase
orders for Eligible Product by overnight express delivery or fax to the Attention
of Customer Service. Wholesaler shall consult with FHPC to develop mutually
acceptable shipping schedules for the Eligible Product.


 


(b)       All Products (other than Eligible Product) purchased or ordered by
Wholesaler after the effective date of a New Price
shall be sold and purchased at the New Price.


 


(c)        When determining Eligible Product under this section, Products
discontinued by FHPC during the term of this Agreement and subsequently
replaced by another Product within the same Product line and drug class shall
have the same Customary Practice (less Federal Customer purchases, if
applicable) history as the discontinued Product.


 


(d)       Inventory Reports shall include sufficient data so that FHPC can
determine and evaluate the Aggregate Inventory, purchases, returns and
chargebacks made by Federal Customers.


 


4.                                       Paragraph 2.6 (Chargebacks) shall be deleted in
its entirety and replaced with the following paragraph.


 


Returns.   FHPC shall credit Wholesaler current
Wholesaler Acquisition Cost (WAC) less #### ####### (##) for returns on Product
except for Federal Customers which shall receive a credit for the purchase
price.  Except for the foregoing, all
other terms governing Product returns shall be in accordance with FHPC Return
Goods Policy set forth in Exhibit B.


 


Any capitalized terms used in this Amendment,
which are not otherwise defined herein, shall have the same meanings ascribed
to them in the Agreement.  All other
terms and conditions of the Agreement shall remain in full force and effect and
unless as otherwise modified herein, shall also apply to the subject matter of
this Amendment.  In the event there is
any inconsistency or conflict between the provisions in this Amendment and
those in the Agreement, the provisions in this Amendment shall supersede and
control.


 


Please sign two copies of this letter agreement
to acknowledge your acceptance of this Amendment to the Agreement and return
one signed copy to:  First Horizon


 






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Pharmaceutical Corporation, Attention: Toi Wilson, 6195 Shiloh Road,
Alpharetta, GA.  30005.  The second copy should be retained for your
records.


 


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Darrell Borne

  
	
   

  	
  Chief Financial Officer

  



 


 


[SIGNATURES ON FOLLOWING PAGE]


 






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IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment as of December 1, 2005.


 


 


	
   

  	
  ACCEPTED AND AGREED:

  
	
   

  	
  McKesson Corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Mark Miller

  	
   

  
	
   

  	
  Title

  	
  VP Investment Purchasing

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ACCEPTED AND AGREED:

  
	
   

  	
   

  
	
   

  	
  First Horizon Pharmaceutical Corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Darrell Borne

  	
   

  
	
   

  	
  Title

  	
  CFO

  	
   

  



 






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EXHIBIT A - Minimum Order
Quantities


 


 


	
  Product

  	
   

  	
  NDC #

  	
   

  	
  #####

  ###

  	
   

  
	
  Robinul 100’s

  	
   

  	
  5963020010

  	
   

  	
  ##

  	
   

  
	
  Robinul Forte

  	
   

  	
  5963020510

  	
   

  	
  ##

  	
   

  
	
  Nitrolingual Pumpspray 200

  	
   

  	
  5963030020

  	
   

  	
  ###

  	
   

  
	
  Nitrolingual Pumpspray 60

  	
   

  	
  5963030065

  	
   

  	
  ##

  	
   

  
	
  Ponstel 100’s

  	
   

  	
  5963040010

  	
   

  	
  ##

  	
   

  
	
  Tanafed DP 4oz

  	
   

  	
  5963046504

  	
   

  	
  ##

  	
   

  
	
  Tanafed DP 16oz

  	
   

  	
  5963046516

  	
   

  	
  ##

  	
   

  
	
  Tanafed DMX 4 oz

  	
   

  	
  5963047004

  	
   

  	
  ##

  	
   

  
	
  Tanafed DMX 16oz

  	
   

  	
  5963047016

  	
   

  	
  ##

  	
   

  
	
  Sular 10mg

  	
   

  	
  5963044010

  	
   

  	
  ##

  	
   

  
	
  Sular 20mg

  	
   

  	
  5963044110

  	
   

  	
  ##

  	
   

  
	
  Sular 30mg

  	
   

  	
  5963044210

  	
   

  	
  ##

  	
   

  
	
  Sular 40mg

  	
   

  	
  5963044310

  	
   

  	
  ##

  	
   

  
	
  Cognex 10

  	
   

  	
  5963019012

  	
   

  	
  ##

  	
   

  
	
  Cognex 20

  	
   

  	
  5963019112

  	
   

  	
  ##

  	
   

  
	
  Cognex 30

  	
   

  	
  5963019212

  	
   

  	
  ##

  	
   

  
	
  Cognex 40

  	
   

  	
  5963019312

  	
   

  	
  ##

  	
   

  
	
  Furadantin 470 mL

  	
   

  	
  5963045016

  	
   

  	
  #

  	
   

  
	
  Prenate Elite 90’s

  	
   

  	
  5963041190

  	
   

  	
  ##

  	
   

  
	
  Optinate 30s

  	
   

  	
  5963041230

  	
   

  	
  ##

  	
   

  
	
  Zoto

  	
   

  	
  5963013503

  	
   

  	
  ##

  	
   

  
	
  Fortamet 1000mg

  	
   

  	
  6202257560

  	
   

  	
  ##

  	
   

  
	
  Fortamet 500mg

  	
   

  	
  6202257460

  	
   

  	
  ##

  	
   

  
	
  Altoprev 20mg

  	
   

  	
  6202262830

  	
   

  	
  ##

  	
   

  
	
  Altoprev 40mg

  	
   

  	
  6202262930

  	
   

  	
  ##

  	
   

  
	
  Altoprev 60mg

  	
   

  	
  6220226303

  	
   

  	
  ##

  	
   

  
	
  Triglide 50mg

  	
   

  	
  5963048090

  	
   

  	
  ##

  	
   

  
	
  Triglide 160mg

  	
   

  	
  5963048590

  	
   

  	
  ##

  	
   

  



 






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EXHIBIT B


 


RETURN GOODS POLICY


 





 


RETURN GOODS POLICY


 


AUTHORIZATION:


•                  Prior
authorization from FHPC is required for all returns.  Return Authorization number must be displayed
on the shipping carton containing return goods. 
Please call FHPC Return Goods department at 800-849-9707 ext. 1468.


 


RETURNABLE ITEMS:


•                  6
months prior to expiration date or up to 12 months after expiration date


•                  Product
must be in original, unaltered container


 


CONDITIONS FOR CREDIT:


•                  A
valid Return Authorization (RA) number must
accompany all returns for proper credit


•                  RA
Numbers are valid for 75 days from issuance. 
Expired RA numbers will be considered invalid and no credit will be
issued


•                  All
products must be returned to FHPC or agent of FHPC within 75 days to receive
credit Products that have been destroyed by customer or agent of customer will
not receive credit


•                  Product
must be in original, unopened, unaltered container to receive full credit


•                  Partial
returns (other than liquids) will be credited at 50% of original sale price


•                  No
credit will be issued for liquid partial returns


•                  Credit
issued is based on price at time of original sale.  Adjustments will be made for products
purchased through buying groups and special deals/promotions


•                  Returns
due to overstock are subject to 20% restocking fee.  Prior approval is required


 


SHIPPING ERRORS/DAMAGED SHIPMENTS:


Products
shipped in error by FHPC or products damaged in transit must be reported to
FHPC within 5 working days of receipt and must be returned to FHPC within 15
days of receipt.  Contact FHPC Customer
Service at 800-849-9707 ext. 1429.


 


TRANSPORTATION CHARGES:


Prepaid
by customer except when error is due to FHPC


 






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TERMS OF RETURN POLICY:


•                  FHPC
will not reimburse fees due to processing third party returns, destruction
charges, shipping costs or processing


•                  All
returns are subject to review by FHPC.  Issuance
of RA number does not guarantee credit.  Credit
issuance is dependent on confirmed receipt/review of return goods by FHPC or
FHPC contracted return facilitator


•                  No
credit will be issued for return goods received without a valid RA number.  Unauthorized return goods will be destroyed.


 






*  Redacted text has been omitted and
filed separately pursuant to a request for confidential treatment