Exhibit 10.2
 
May 19, 2008
 
Goodman Company Ltd.
108 Fujigaoka
Meito-Ku
Nagoya, 465, Japan

Re:           Distribution Agreements

Dear Mr. Yamamoto:

Volcano Corporation (“Volcano”) and Goodman Company Ltd. (“Goodman”) hereby
mutually terminate the Exclusive Distribution Agreement dated September 27, 2004
between Goodman and Volcano Therapeutics (now known as Volcano Corporation)
(“Distribution Agreement”).  Volcano and Goodman further agree that all
outstanding Orders (as defined in the Distribution Agreement) are terminated in
accordance with Section 12.1 of the Distribution Agreement (the “Cancelled
Orders”).  Volcano and Goodman also hereby mutually terminate the oral agreement
between Volcano or its affiliates and Goodman relating to the distribution of
Volcano functional measurement products originally distributed by Goodman under
the expired International Distributor Agreement dated September 17, 1994 between
Cardiometrics, Inc. and Goodman and Kaneko Enterprise, Inc. as amended by the
letter agreement dated November 9, 1994 (the “Expired Distribution
Agreement”).    Finally, Volcano and Goodman hereby mutually terminate any other
oral agreements between Volcano and Goodman relating to the distribution of any
other Volcano products in Japan.

From and after the date of this letter, Volcano is willing to continue to do
business with Goodman solely on a non-exclusive basis and solely through written
purchase orders submitted to Volcano at least 90 days prior to the first day of
the requested month of delivery and that are accepted in writing by Volcano in
its sole discretion.  Volcano has determined that it will no longer extend
credit to Goodman.  Therefore, each purchase order submitted by Goodman must be
in the form of the purchase order attached hereto as Attachment 1 and specify
the quantity of each Volcano product ordered, the applicable purchase price and
shipping instructions.  Each purchase order  must be accompanied by payment in
full of the entire invoice for such purchase order (including applicable taxes
and shipping charges) if Volcano determines in its sole discretion that
prepayment is acceptable.  As an alternative to payment in full with each
purchase order, Goodman may submit an irrevocable letter of credit, in an amount
equal to the entire invoice for such purchase order issued by a bank that is
acceptable to Volcano in its sole discretion and with such terms and conditions
as are acceptable to Volcano in its sole discretion (“Letter of Credit”). Each
of Goodman’s purchase orders shall be subject to Volcano’s acceptance, which
acceptance can be withheld by Volcano in its sole discretion.  Volcano shall
have no liability to Goodman with respect to any purchase orders that are
rejected for any reason.    Any purchase order submitted by Goodman that is
accepted by Volcano in its sole discretion shall be binding upon the parties and
may not be modified, rescinded or cancelled by either party without the
agreement of the other party.  If Goodman provides payment in full of the
invoice price for the Cancelled Orders and confirms that Cancelled Orders as new
purchase orders, then Volcano will determine whether to accept the Cancelled
Orders as new purchase orders and whether to waive the 90 day advance notice
requirement for the resubmitted orders and ship the products.  Volcano shall not
be obligated to accept any of the resubmitted Cancelled Orders.

Volcano shall be free to sell, market and distribute any of its products in
Japan, either directly or through one or more third parties, including Volcano
affiliates.   All product sales shall be subject to the terms and conditions of
the Volcano purchase order form and this letter and Volcano hereby rejects any
terms and conditions submitted by Goodman that attempt to modify or supplement
any of the terms and conditions of the purchase order or this letter.

Volcano will not ship any products to Goodman unless Goodman pays the full
invoice for the shipment of products to Goodman made in May 2008 (US $891,182)
and pays to Volcano its other outstanding invoices when due, with $2 million in
such payments scheduled for May 2008 and $1.5 million in June 2008.  Volcano
reserves the right to cancel any accepted purchase orders and/or withhold
shipment of products if Goodman fails to make any of these payments when due.

Goodman agrees that it will terminate all sub-distribution agreements or other
agreements between Goodman and Fukuda Denshi Co., Ltd, (“Fukuda”) relating to
the distribution of Volcano products in Japan. Volcano will notify Fukuda that
Volcano and Goodman have terminated the Distribution Agreement.

Pursuant to Section 6.7 of the Distribution Agreement, Goodman agrees that it
will transfer to Volcano Japan Co., Ltd (“Volcano Japan”) all marketing
authorization and other regulatory approvals (shonins) for Volcano Products that
are held by Goodman or its affiliates as set forth on Schedule 2 hereto (the
“Shonins”) and complete the transfer by no later than June 30, 2008 (the “Shonin
Transfer”), except that if any Shonins that have been issued for less than one
year cannot be transferred until a later date, then the transfer of such Shonins
shall be completed on the earliest date on which such Shonins can be
transferred.  Volcano’s willingness to continue to accept purchase orders and do
business with Goodman is conditioned upon Goodman complying with the
following:­­­­­­­­­­    (a) Goodman will execute and deliver to Volcano the form
of transfer and notice of transfer required under applicable law (including the
Japanese Pharmaceutical Affairs Law and Standards for the Manufacturing Control
and Quality Control of Medical Devices) to transfer to Volcano Japan the Shonins
together with a declaration letter to Japan’s Ministry of Health, Labour and
Welfare by no later than May 30, 2008; (b) Goodman will deliver the original
Shonin documentation to Volcano Japan’s designated representative; (c) Goodman
will cause Fukuda to notify every customer in Japan of the Shonin Transfer as
required under applicable law; and (d) when required by law, Goodman will
over-label existing labels on Volcano products in Goodman or Fukuda’s inventory
and any other Volcano products sold by Goodman or Fukuda after the date the
Shonin Transfer as well as all IVG/s-5 consoles in the field in Japan with
Volcano Japan labels supplied by Volcano.  Until the completion of the Shonin
Transfer, Goodman will continue to comply with the Quality Agreement executed in
December 2005 between Goodman and Volcano, which is not being terminated as of
the date of this Agreement and, as the Marketing Authorization Holder, Goodman
will continue to inspect every shipment of Volcano disposables and other Volcano
products and take all other actions required to be taken by the Marketing
Authorization Holder under applicable law until the Shonin Transfer is
completed.

Please acknowledge that Goodman agrees to the terms and conditions outlined in
this letter by signing the acknowledgement below.

Sincerely,

VOLCANO CORPORATION
 

By:           /s/ Scott Huennekens
Scott Huennekens
President & CEO

 
Acknowledged and agreed:

Goodman Company Ltd.

By:           /s/ Akira Yamamoto
Akira Yamamoto
President

 
 

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Schedule 2

Product
Authorization Number
Year of Original Approval
Memo
Medical Device
Classification
FLOMAP Doppler Guide System
20400BZY00392000
1992
 FloMap
III
Flowire
20400BZY00650000
24 JUNE 1992
12.24.1992 partially Modify
FloWire/SmartWire
IV
WaveWire
21000BZY00121000
1998
WaveWire
IV
WAVEMAP Pressure Guide Wire System
21000BZY00122000
1998
4.21.2003 Partially Modify
WaveMap
II
SMARTMAP Pressure Guide Wire System
21500BZY00077000
3 MARCH 2003
SmartMap
II
SmartWire
21500BZY00095000
3 MARCH 2003
12.17.2003 Partially Modify
5.28.2004 Partially Modify
SmartWire
IV
COMBOMAP Pressure Flow System
21700BZY00109000
28 FEB 2005
ComboMap
III
ComboWire
21800BZY10131000
30 MARCH 2006
ComboWire
IV
Revolution
21900BZX00682000
26 JULY 2007
None
IV
In Vision Gold with Spin Vision
21900BZX00683000
26 JULY 2007
None
III